Turkey prices cheap this Thanksgiving, despite bird flu

WASHINGTON — Shoppers looking to pick up a last-minute turkey for their Thanksgiving meal this week are having no trouble finding a cheap bird, despite the deadly bird flu virus that killed millions of turkeys earlier this year. The real impact for consumers could come next year.

Thanksgiving is by far the most popular time for turkey, with Americans eating 46 million of them on the holiday, or about one out of every five birds produced annually, according to the National Turkey Federation.

Grocery chains have reduced prices for turkeys, often losing money on the birds, to lure shoppers into the stores to load up on other items. The average price of a frozen turkey has fallen 13 cents from two weeks ago, to 95 cents a pound, the Agriculture Department said Friday. That's 2 cents cheaper than a year ago even with fewer birds available.

In some areas, prices are even cheaper. The turkey industry says shoppers can find promotional deals for turkey at just 49 cents a pound. Hy-Vee, a Midwest grocery chain, gives shoppers a free turkey when they buy a ham.

“We have plenty of birds on hand. We don’t’ see any change in the prices … at least through 2015,” said Darin Hill, who oversees meat purchases for Sunshine Foods. "So far (bird flu) hasn’t impacted us. Prices next year will be greatly affected.”

The reason is Hy-Vee, Sunshine and other grocers entered into contracts for large, wholesale turkeys earlier this year, often with suppliers who had produced and locked in prices long before the bird flu disaster worsened.

The deadly avian influenza virus wiped out 8 million turkeys across the United States, or about 3 percent of the flock, primarily in Minnesota, the country’s largest producer, and other states in the upper Midwest. Montana was largely unscathed by the outbreak, with only one case affecting 40 backyard poultry in Judith Basin County in early April.

As the poultry industry recovers from the bird flu and restocks operations hit by the outbreak, wholesale prices for turkeys slaughtered late in the year have soared. Urner Barry, a commodity research firm, said “one of the tightest supply situations” on record has hiked whole frozen turkey prices to a record-high $1.40 a pound, compared to $1.07 at this time in 2013.

Russ Whitman, a poultry analyst with Urner Barry, said as birds died from the virus, turkeys intended for slaughter on later dates were moved through the supply chain earlier than intended. The birds often weighed a few pounds less than normal. Several months later, the industry is still struggling to catch up.

Last month, the USDA said 268 million pounds of whole turkeys were in cold storage at the end of September, the lowest level in nearly a decade. Supplies of all frozen turkeys in September were the lowest since 1985.

“Is it fair to say this will be with us in the next year? Absolutely,” Whitman said. “We have the highest prices ever, the lowest supply ever. It has backed everybody into a corner, buyers and suppliers alike. And that means higher prices.”

It also means bad news for philanthropic efforts, food bank and other donation programs that are grappling with a plunge in turkey donations, the result of record high wholesale prices.

Danny Akright, a spokesman with the Food Bank of Iowa in Des Moines, which distributes food to pantries, soup kitchens and emergency shelters in nearly half the state, said turkey donations are “down significantly” from last year.

The food bank also has noticed higher costs when it’s gone out on the market to purchase frozen turkey breast. A year ago, it purchased 42,000 pounds of turkey breast in mid-October for $51,000; this year the same amount cost almost $6,000 more.

“People that aren’t able to purchase the food themselves, we want them to be able to have that holiday experience and have the dignity of Thanksgiving dinner,” Akright said. “We want to be able to provide that but when we’re down on donations like this it’s tough to turn partner agencies from those products because they have turned their clients away from them.”