Source:  MEATINGPLACE.COM, 11/12/10

A growing consumer appetite for turkey coupled with tighter supplies is pushing up producer prices for the birds as the holiday season approaches.

Producers cut back production in 2009 when consumer demand slowed, but the market has exhausted supplies in cold storage and processors are now scrambling for turkeys to meet improving demand, notes the California Farm Bureau Federation.

Turkey growers such as Tim Diestel of Sonora, Calif., are seeing demand return after cutting production last year, even as the economy has remained sluggish. That’s because “people are kind of more used to the situation” and have decided to splurge on items such as the holiday turkey, “which is already a pretty inexpensive protein,” he told the farm group.

Turkey prices at the producer level are expected to rise 18 percent this year, to 90 cents a pound, compared with 2009, according to USDA’s latest projections released this week.

Meanwhile, the agency expects turkey production to decline slightly to 5.59 billion pounds from 5.66 billion in 2009. “The rate of decline in 2010 turkey production is slower than previously forecast,” USDA said in its World Agricultural Supply and Demand Estimates report.

Bill Mattos, president of the California Poultry Federation, said farmers have sold all of their turkeys for the Thanksgiving holiday for profitable prices. But he warned that escalating feed costs could dampen the recovery in the turkey business.

Consumers won’t pay a noticeably higher price for turkey at the cash register because retailers are offering discounts on turkeys if shoppers buy a certain amount of other groceries, he said.

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