Sunday, November 16, 2014

There is No Price Inflation (Thanksgiving Turkeys More Expensive This Year Edition)

In the week ending last Friday, an 8 to 16 pound hen sold at wholesale for about $1.19 a pound and a 16 to 24 pound tom sold for about $1.17 a pound. Both price are sharply higher than the $1.03 average for hens and $1.04 average for toms in 2013.

The USDA expects the U.S. turkey stock to number 235 million this year, the lowest since 1986 when production totaled about 207 million. Turkey farmers culled their flocks after the drought in 2012 as they tried to cut losses brought on by the high cost of feed. Like cattle herds, turkey flocks have gotten smaller and prices have risen.

The price increase of turkeys at the wholesale level does not generally translate into a penny-for-penny higher price at the retail level, as grocers like to use turkeys as a loss leader to get people into their stores on Thanksgiving day.

Last week. the price for fresh turkey was $1.44 a pound according to the USDA.

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