GoodFuels

Attack of the Killer Turkey Prices

The cost of this year’s Thanksgiving meal is up almost six percent this year, with turkey prices leading the way, according to the American Farm Bureau Federation.

The cost of a 16-pound turkey, at $19.09 or roughly $1.19 per pound, reflects an increase of 9 cents per pound, or a total of $1.46 per turkey compared to 2007. This is the largest contributor to the overall increase in the cost of the 2008 Thanksgiving dinner.

Some are placing the blame on the ethanol industry, even though the Renewable Fuels Association has calculated that only 1.4% of price for the typical holiday meal for 10 this Thanksgiving can be attributed to the U.S. ethanol industry’s demand for corn.

The Associated Press had an interesting take on the turkey prices in an article last week, which uses the National Turkey Federation as its source saying that “consumers will see good prices this year” for turkeys. At the same time, the article quotes the Farm Bureau survey, without noting the fact that turkey makes up the majority of the price increase for the meal!

The article included comments from Keith Shoemaker, chief executive of Butterball, blaming corn prices and ethanol - not for higher turkey prices for the consumer, but for lower profits for the companies.

”In 2008, it was kind of the perfect storm. Corn prices were high, there was oversupply and speculation helped to drive it more,” Shoemaker said. ”Ethanol helped to drive it more and the value of U.S. currency made it cheaper for other people to import grain, and also import turkey.”

The turkey industry has also had to reverse direction — after having a good year in 2006, producers ramped up production the next year and are now having a tough time scaling back, Shoemaker said.

What they are trying to do now is cut production in order to boost prices EVEN MORE! That means you might want to buy two turkeys this year and freeze one for next year.