Reviewing the Holiday Season’s Turkey Supply
Given all the attention about food prices headed into the holiday season, let’s step back and consider the underlying supply situation. With turkey on our minds, this week’s post digs into the monthly production and cold storage data for turkey, which have been tight this fall.
While 88% of Americans eat turkey on Thanksgiving, turkey’s year-round popularity has also grown. Turkey consumption has nearly doubled since 1970. To meet that demand, U.S. farmers raised 224 million turkeys in 2020. According to USDA, the top turkey-producing states include Minnesota, North Carolina, Arkansas, Indiana, Missouri, Virginia, Iowa, and California.
Figure 1 shows U.S. turkey production data since 2015. One of the first observations is how variable production is within a year. To show this more clearly, each October is denoted in black. Generally speaking, turkey production peaks in the fall, often October, before dropping lower in December or January.
Also noticeable in Figure 1 is that turkey production has slipped lower in recent years. In the first nine months of 2020 (January – September), total production was 2.3% lower than the same period in 2020. In other words, turkey production has been lower than average this year. USDA indicates that high feed prices have been a factor.
Another important element of meat supply is cold storage. The cyclicality of turkey and the holidays is perhaps most evident in the cold storage data (Figure 2). Inventories typically peak in September (October shown in black) before reaching lows in January. Keep in mind the holiday season dash for turkey creates cyclical trends in both production and storage.
Specific to 2021, pounds of turkey meat in cold storage are also lower as September and October levels were the lowest observed in more than a decade. Some experts point to disruptions along the supply chain as a reason for this. Producers and processors are also grappling with uncertainty this year – will consumers want smaller birds (like 2020’s small celebrations) or will families need larger turkeys for family gatherings this year?
Finally, Figure 3 shows cold storage inventories of turkey, pork, beef, and broilers. While we initially reviewed this data to illustrate how unique the cyclical pattern is for turkey, the data also reveal inventories in storage are lower for all major meats. For pork, pounds in storage have been lower for the last few years (Sizing Up China’s Pork Buying Spree), while beef and broiler inventories have fallen sharply from a year ago.
Wrapping it Up
Specific to 2021, production and storage data reveal turkey supplies are lower than in recent years. While many have focused on food prices, it’s worth noting tight supplies are also at play. This is most evident with cold storage, as turkey inventories are at the lowest in more than a decade of data.
More broadly, these data also reveal the cyclical trends in turkey production and storage. Both increase ahead of the holidays before falling sharply lower into the new year. For more on inflation and food prices, read this recent post.