The Thanksgiving holiday is all about turkey it seems, so let’s discuss the turkey industry and its role in the meat protein complex.

The U.S. turkey industry experienced a remarkable period of growth from the mid-1980s to the mid ’90s when production more than doubled. The growth was driven by consumers’ concerns over dietary fat and cholesterol and their resulting interest in “white meat.” In addition, the rapid development of a broad array of processed meat products made either completely or partially from turkey helped drive per capita consumption from 8.7 lbs. in 1984, to 17.9 lbs. in 1991.

annual per capita turkey consumption

The industry continued to grow from 1991 through 2007 but the rate of growth was generally just large enough to keep domestic per-capita consumption levels steady while exports grew by more than 450%. Record-high prices for whole birds and most turkey parts in 2006 drove a rapid expansion of output that ran head-long into the higher corn prices of 2007 and 2008 to cause a 9.3% year-on-year reduction in output in 2009.

The industry has grown slowly since then, managing production increases well enough to remain profitable until this year, when costs once again have put the industry into a profit bind. Production this year is forecast by the Livestock Marketing Information Center (LMIC) to grow by 2.7%, and output thus far in 2012 has been 2% larger than last year.

annual turkey production

As is the case with other species, 2013 output is expected to drop. LMIC’s forecast at present is for a 4.1% decline. USDA’s November World Agricultural and Supply Demand Estimates report predicts 2013 output will fall by 3.2% to 5.79 billion lbs., RTC (ready-to-cook) weight. The decline in output will be the major driver of another decline in per-capita consumption. The 2013 level is expected to be 15.5-16 lbs./person, its lowest level since 1988.

The bright spot for turkey usage is exports. Those hit a record 702.6 million lbs. in 2011 and are expected by LMIC to grow by 100 million lbs. beyond that level in 2012. Meanwhile, 2012 exports are expected to account for 12.1% of total production. LMIC expects exports to fall by 4.1% next year but to represent 13.5% of output.

By Len Steiner and Steve Meyer, CME Group Daily Livestock Report