Source: MEATINGPLACE, 7/17/13
Turkey cutout values improved 3 percent in June, marking the first increase in three months, and should continue to strengthen, suggesting margins have bottomed for the industry, according to one Wall Street analyst.
In June, turkey margins were at a loss of 20 cents per pound due to weak demand, oversupply and high feed costs. But cutout values improved, reflecting the industry’s aggressive production cuts that are beginning to take hold and may continue through at least the first quarter of 2014, said BMO Capital Markets analyst Kenneth Zaslow.
“Production cuts likely create a floor from which turkey prices will begin to improve through the remainder of 2013,” Zaslow wrote in a note to clients.
Turkey breast prices rose 2 percent to $1.55 per pound in June from May, which was the second month in a row of increases after falling to their lowest levels in three to four years.
Thigh prices are at 10-year lows due to ample supplies that are offsetting strong domestic demand for ground turkey, turkey bacon, sausage and burgers, Zaslow said. But he also sees seasonal demand and production cuts lifting prices going forward.
Australians eat turkey
One in four grocery buyers in Australia eats turkey at least once a month, according to a poll by Australian poultry producer Steggles.
More than half of turkey consumed consists of fresh cuts including turkey mince, sliced turkey and pre-prepared turkey products with marinades, the company said.
“Turkey consumption is in a period of growth and we anticipate an upward trend will continue as awareness of the category grows and education continues,” Laurel Brown, a Steggles brand manager, said in a news release.
