High late-season wholesale turkey prices could put a dent in grocery store marketing programs this year, said the Livestock Marketing Information Center in a posting to Extension agents called Livestock Monitor.
Current wholesale whole bird prices in the $1.30-$1.40-per-pound range (up from $1.10-$1.20 a year ago) are consistent with limited frozen inventories and usage this holiday season that would be unchanged to up slightly from last year, the LMIC said.
HOLIDAY PREP. BEGINNING
The transition to distribution from procurement for the Thanksgiving Day holiday should be getting underway soon, the LMIC said. Consumer packaged hens in wholesale markets as of the first week in October were priced above a year ago by more than 10%, according to USDA-Agriculture Marketing Service reports.
Trade was so limited from mid-August to mid-September that the USDA-AMS was not able to quote a price in its weekly market summary. Price quotes for larger tom turkeys were available through August and September, with prices stable and near values registered in mid-August, the LMIC said. By the second half of September, prices were up 10% from a month earlier.
During the last two weeks, prices for hens and toms fell but still were 3-5% higher than mid-August.
TOTAL STOCKS DOWN
At the beginning of September, total whole-bird inventories were down 9% from a year earlier with hens down 26% and toms up 5%. The LMIC said it expected frozen whole turkey inventories to be down 26% from a year ago by the end of September. The accelerated decline was because September turkey production was projected to be down 3% while domestic usage and turkey export forecasts were up from September 2020.
The production decline was a consequence of 8% lower June hatchery output from a year earlier and July hatchery output that was down 4%.
UNCERTAINTY ABOUNDS
Uncertainty about consumer demand for turkey was a challenge for the outlook in recent years, and the past few months do not provide much clarity.
Through the first two months of the summer quarter, domestic turkey usage was down 1% from July and August of 2020, but August usage was up 4%, so the trend was improving.
Ham prices (vacuum packed 17-20#) that would compete with turkey at the holidays were up close to 40% from a year ago during the July-September quarter, the LMIC said. Ham prices were volatile, however, and by the last week in September, those same ham prices were only up 5% from a year earlier.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $123.12 to $125.00 per cwt, compared with the previous week’s range of $123.39 to $125.00. FOB dressed steers and heifers went for $193.39 to $196.04 per cwt, versus $193.61 to $196.03.
The USDA choice cutout Thursday was up $0.30 per cwt at $280.32, while select was up $1.98 at $260.68. The choice/select spread narrowed to $21.32 from $21.32 with 123 loads of fabricated product and 21 loads of trimmings and grinds sold into the spot market.
The USDA reported Thursday that basis bids for corn from livestock feeding operations in the Southern Plains were unchanged at $1.10 to $1.20 a bushel over the Dec futures and for southwest Kansas were unchanged at $0.40 over Dec, which settled at $5.16 3/4 a bushel, up $0.04 1/2.
Twenty heifer and five steer contracts were tendered for delivery Thursday against the Oct live cattle contract.
The CME Feeder Cattle Index for the seven days ended Wednesday was $154.01 per cwt down $0.25. This compares with Thursday’s Oct contract settlement of $158.42 per cwt, up $0.77.