(Bloomberg) -- US prices for turkey are dropping even at a time when supplies have grown tighter, signaling disappointing holiday demand as consumers continue to fret over the cost of food.
While it’s still too early for data that shows declines in consumer purchases for the holiday, experts are pointing to slumping production figures as a good proxy for the lackluster demand that’s pressuring the market. Turkey prices are down 6% even as the number of birds raised in the US dropped by the same amount, sending the total to the lowest since 1985, according to the US Department of Agriculture.
“Typically, fewer turkeys would mean an increase in price, but demand for turkey fell in 2024,” the American Farm Bureau Federation said in its annual Thanksgiving survey. The decline prompted US farmers this summer to hatch the fewest turkey eggs in 36 years, according to the USDA.
Turkey sales have struggled since the start of Covid-19 in 2020 when gatherings were discouraged and restaurants closed en masse. Two years later, the worst outbreak of avian influenza killed millions of birds. Then, inflation picked up. Now, all those issues are under control but demand isn’t rebounding.
Food retailers and producers know Americans are feeling squeezed, and in return are buying less for store shelves.
“Nobody wants any inventory anymore,” said Russ Whitman, director of market reporting at price-reporting service Urner Barry by Expana. “The retailers are increasingly price sensitive. The only thing they can really do about it is limit their purchases, to limit their exposure.”
Pew Research surveys show three-quarters of Americans remain very concerned about the price of food and consumer goods, a number that hasn’t changed much since 2022 and ranks above worries about housing costs — even as grocery inflation has mostly leveled off.
Sales volumes of whole turkeys were down about 20% from a year ago in the four-week period ended Nov. 3, according to data from market researcher Circana. Sales of turkey breasts were 17% higher while legs were up about 3.8%, showing demand is shifting to smaller quantities of the meat.
Still, there will be a turkey for any consumer who wants one this year, said Jay Jandrain, chief executive officer of Butterball LLC, one of the world’s largest turkey providers. “There are no major issues with regard to supply across the country this year. So consumers ought to be able to get exactly what they’re looking for.”
Above all, they’re looking to save money.
This year’s average cost of a Thanksgiving meal for 10 people is $58.08, a drop of 5% from last year, according to the Farm Bureau, But years of rising food prices have ingrained the idea of shopping on a budget, even at Thanksgiving.
“A lot is figuring out how to work the system to meet our needs,” said Steve Markenson, vice president of research and insights at FMI, a food retailer industry group. Buying in bulk and splitting with friends has become popular, he said. This Thanksgiving, 59% of hosts are planning on using the tactic, a survey by Advantage Solutions found.
Lillian Syme does that already, along with a few other things. The 24-year-old who lives in Brooklyn said her Thanksgiving meal will feature a turkey, but no ham or kielbasa. Her garnishes will be limited to parsley and dill. She’s buying store-brand dairy products and will probably have only five sides instead of the dozen or so that show up on her family’s table in Michigan.
“I’m not really willing to compromise on quality so it’s been tricky figuring out how to do Thanksgiving,” she said.
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