Consumers can expect to pay high prices at the grocery store for turkey this upcoming holiday season thanks to the impacts of avian influenza and inflation.
The retail price for fresh boneless, skinless turkey breast reached a record high of $6.70 per pound in September 2021 when prices were $3.16 per pound. The previous record high price was $5.88 per pound in November 2015, during the 2015 highly pathogenic avian influenza (HPAI) outbreak. Wholesale is $1.79/lb for whole turkeys.
Inflation is contributing to the price increases. All retail food prices were 11.4% higher in August compared to the same time last year.
Despite the higher prices, demand has remained strong and is even forecast to increase.
Although there will be a tighter supply of turkeys this year, there should be enough available for the Thanksgiving demand.
“HPAI outbreaks in the spring and an uptick in cases in the fall are taking a toll, but farmers remain dedicated to ensuring America’s food supply remains strong.”
It is important to understand that farmers aren’t profiting from record high retail prices. High supply costs from feed, fuel, fertilizer and labor make raising turkeys even more expensive.
The U.S. Department of Agriculture’s most recent Farm Sector Income Forecast predicts record high total production costs, increasing 17.8% from 2021 to $437.4 billion in 2022.
While egg prices have come down from record highs in July, the average price for a dozen grade A eggs is $2.34, 27% higher than the same time in 2021, and 44% above the five-year average of $1.29.
USDA estimates +47 million commercial poultry birds have been last to highly pathogenic bird influenza in 42 states including Alaska. It takes 3.5-5.5 months to replace a flock lost to influenza. But no real shortage of whole birds for the holidays.
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PASTURE, RANGE, FORAGE INSURANCE DEADLINE NEARS
The Pasture, Range, and Forage Insurance (PRF) deadline to sign up for coverage for 2023 is on December 1. Often referred to as “rainfall insurance,” this product can be a useful risk management tool for landowners and livestock producers. The product provides insurance coverage for grazing pastures, rangeland, and perennial forage acres.
Essentially, PRF allows a landowner to insure a certain percentage of historic rainfall in the area where they own property. If the actual rainfall in the area falls below the insured percentage, the landowner receives an indemnity payment. PRF may be purchased from any crop insurance agent. A good agent can help walk through the details of the insurance product and assist with the decisions that a landowner must make in the signup process.
The first step in analyzing whether to purchase PRF insurance is to determine the “grid” where the property is located. The historic rainfall used to establish PRF insurance coverage is tied to specific grids, with each one being approximately 17 miles by 17 miles. Do note that land can be located in multiple grids depending on how the grid lines fall. Once a landowner determines the grid(s) he or she can use for PRF coverage, the USDA PRF Support Tool can be used to see the various choices available. The landowner can click on “Historical Indexes” and see the rainfall percent of normal in that grid for the last 74 years.
The next step for landowners is to analyze options including which periods they will insure, the level of rainfall they will insure, the productivity factor, and the percentage of coverage in each period. Again, a good crop insurance agent can help walk through each of these decisions. The USDA PRF Support Tool will also allow landowners to put in information and compare the historic results with different combinations of coverage levels, productivity value, and periods insured.
The amount of payment here depends on the percentage of rainfall insured, productivity value selected, and percent of value chosen for that period.