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Mixed Fortunes for US Turkey Producers

by 5m Editor
16 November 2009, at 9:43am

PENNSYLVANIA, US - In the run-up to Thanksgiving, turkey sales are down by up to 20 per cent due to weak demand, according to a contract grower but a small, specialist producer is reporting increased sales at a price above last year.

Weak nationwide demand for turkeys is greatly affecting large poultry producers in the Sunbury Valley,according to The Daily Item. Farmers say they are seeing more than a 20 per cent decrease in sales. This comes despite the stable price per pound of whole turkeys.

"Most people already know that the Pennsylvania dairy farmer is in trouble," said Morril Curtis, owner of WindView Farms, of Port Trevorton. "But what they don't know is poultry farmers are having financial difficulties too. It's all about the economy. Our margins, even in the best of times, are extremely thin. With demand for poultry down, unless the economy improves, you might start seeing poultry farms going under and disappearing over the next few generations."

WindView Farms raises 34,000 turkeys and is under an exclusive contract to Empire Kosher Poultry, in Mifflintown.

"The turkey market is very soft," Mr Curtis said. "I can't say how smaller poultry farms that sell locally are doing. But we sell exclusively to Empire. They literally own the birds on this farm. They even buy the seed we need to raise the turkeys. Empire, I believe will do OK in the Thanksgiving season, but even the kosher market has dried up. Overall, we are being asked to produce less. And that’s not good for us, because we’re paid by pound and by performance.

"We have empty areas on our farm that haven't been empty in 14 years."

Because of the contract, Mr Curtis cannot adjust his prices to reflect increased costs on the farm.

"A lot of what we get from Empire reflect fixed costs but with the economy down, we're being squeezed. That tiny margin is getting even smaller."

The outlook Mr Curtis describes is more pessimistic than the grim outlook for turkey sales officially put out by the U.S. Department of Agriculture.

US Department of Agriculture figures show that turkey meat production during the first six months of 2009 was 2.8 billion pounds, down almost 10 per cent from the same period in 2008. This reduced production was primarily due to a decline in the number of birds slaughtered.

Over the first half of 2009, the number of turkeys slaughtered was down 10 per cent compared with the previous year. Adding to this was a small reduction in the average weight of birds going to slaughter compared with a year earlier.

The forecast for turkey meat production in the second half of 2009 is 2.94 billion pounds, down seven per cent from the same period in 2008 and 35 million pounds less than the previous forecast. The decrease in turkey meat production is again expected to come chiefly from a smaller number of birds slaughtered, as the average weight at slaughter are not expected to be significantly different from the previous year.

Even with wholesale prices for whole turkeys in the US running about 14 to 15 per cent below the previous year, turkey exports are expected to remain well below the levels of last year. Shipments in the second half of 2009 are expected to total 255 million pounds, down from 367 million in 2008.

However, at least one local poultry farm expects better sales results this year, reports The Daily Item.

Landis Poultry Farm, near Watsontown, is a relatively small poultry operation, raising about 2,500 turkeys and 2,000 chickens. Here, demand has actually increased slightly over 2008, owner Joe Landis said.

He said: "For us, the turkey business is doing OK. We only sell locally, here at the farm and at some selected health stores. It's a challenge here. Unlike larger farms under contract, we have to buy our own feed and supplies. Last year, prices were high. This year, corn was not quite as high but the soybean meal was high. As a result, we are asking $2.35 a pound for our whole white turkey, a 10-cent increase over last year, and that is because of the rise in electricity, feed and other fixed costs.

Mr Landis expects to sell 800 turkeys through Christmas, a five per cent increase in sales this year over last.

"This is a real busy road to my farm on the Tuesday and Wednesday before Thanksgiving," Mr Landis said.

His white turkeys are not fed antibiotics or anything artificial and are kept in a 'reduced stress' environment. It is not a pure breed, so he calls it a Landis Turkey.

The contrasts between the large and small turkey farms is stark.

The Landis business is growing and getting by, even as the larger poultry industry is on a downhill slide right now, commented Mr Curtis.

He told The Daily Item: "The slide is expected to slow and the industry should come back but we don't know when."