Turkey Industry Grapples With Surplus

Sunday, November 22, 2009

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Turkeys large and small have descended on local grocery stores ahead of the annual Thanksgiving holiday feast.

Cost conscious consumers watch and wait for the best deals they can find as advertised specials include: a free bird with a $100 grocery purchase at Harps and Price Cutter stores and Walmart’s $5 deal for a 12-pound bird.

Wholesale turkey prices are roughly 18 percent to 20 percent cheaper this year as the industry manages through its product surplus, according to Farha Aslam, food analyst with Stephens Inc.

While that’s a win for consumers, it’s not so great for area turkey farmers.

Turkey raising is a year-round business for more than 100 farm families in Benton and Washington counties. And neighboring Carroll County produces the most turkeys in the state, according to the U.S. Department of Agriculture.

Turkeys are almost a family tradition for Doug and Shirley Bertschy of Gravette, active in the business for more than 30 years.

“Peterson Farms approached us in the early 1970s to grow turkeys in addition to our broiler operation. We jumped into turkey production full-time with Cargill in 1976 and haven’t looked back,” said Shirley Bertschy.

This year the Bertschy’s Benton County farm will produce enough turkey meat to feed every Northwest Arkansas resident three Thanksgiving dinners.

All the local turkey farmers contract with Cargill and those birds are processed at the Randall Road plant in Springdale under the Honeysuckle White brand, according to Shane Acosta, general manager at the plant.

Acosta said the local plant slaughters roughly 46,000 turkeys a day. This time of year the plant’s focus is on the whole bird, fresh market.

“We have been building our freezer reserves of whole birds over several months but the big push for fresh birds happens during the three weeks prior to Thanksgiving,”

The Bertschys downsized their commercial turkey operation from eight poultry houses to three in recent years as they approach retirement. Their other five houses are for sale if the right buyer comes along, she said.

Production cutbacks has also meant the Bertschy’s turkey houses are empty longer in between flocks.

Acosta said production is down some this year across the industry which has meant fewer birds for local growers.

“The turkey industry has made some cutbacks in the number of birds they are producing. It is necessary for bringing supply and demand in line,” said Susan Watkins, poultry extension specialist at the University of Arkansas.

There continues to be a glut of turkey meat on the market and that is affecting profit for local processors Cargill and Butterball, Watkins said.

The National Turkey Federation estimates overall turkey production is down about 9 percent from a year ago, but Acosta said Cargill’s local production has not been cut that much.

“This is a tough economy for everyone, less expensive cuts like turkey hot dogs are selling well, but there is still a large surplus of breast meat in cold storage, which has kept breast meat prices from rebounding this year,” said Sherrie Rosenblatt, spokeswoman with the National Turkey Federation.

“About one third of the annual turkey production will be consumed in the fourth quarter. This is down from 50 percent a few years ago as consumers have added turkey products to their regular diets year round,” Rosenblatt said. The industry exports about 10 percent of its production, about half going to Mexico.

“While this year was not as green as we would have liked in terms of profits, we are hopeful that 2010 will be better as the economy recovers,” Rosenblatt said.

Following a decline this year, U.S. turkey production is forecast to rebound 2 percent in 2010. Exports of turkey meat are expected to increase nearly 4 percent for both the U.S and Brazil, with Mexico making up the largest part of the increased demand, according to the USDA’s 2010 Meat Forecast report released in October.

This time last year the turkeys eaten at Thanksgiving had been raised on $8 corn and $16 soybeans, which meant there was no profit for anyone, Rosenblatt said.

While grain prices are half those rates this year, feed still represents about 70 percent of the cost of raising a turkey.

“Amazingly the turkey is about the most efficient protein source we grow,” Watkins said.

An industry veteran with 15 years experience, she said the big toms — male turkeys — are called canners, because they are typically cut up and used for the deli loaves of breast meat.

The big toms can reach 40 pounds in about 18 to 19 weeks and it takes about 2.60 pounds of feed for every pound of live weight.

Watkins said it takes a little over 100 pounds of feed to create a bird that big with an 80 percent meat yield.

“This is a very efficient use of resources particularly since the ingredients used in turkey feeds are typically not used in human foods,” Watkins said.

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