LISTEN: Feast or Fowl – Why You Might Pay More for Turkey and Eggs This Holiday Season

[00:00] Intro/Outro
Welcome to the Arkansas Food, Farms & Forests Podcast. The podcast bringing you the latest on food, fiber and forestry research from the Arkansas Agricultural Experiment Station, the research arm of the University of Arkansas System Division of Agriculture.

[00:18]  Jenifer:
Welcome to Food Farms & Forests. I’m Jenifer Fouch. Today we are talking about turkeys for Thanksgiving dinner and eggs for all the baked goods. 

As the holiday season approaches, it seems like the cost of everything is going up and it’s no different for turkeys and eggs. And to discuss the economics behind this, Dr. Jada Thompson is joining us. 

She’s an associate professor of agricultural economics and agribusiness and a researcher for the Arkansas Agricultural Experiment Station. Dr. Thompson, thank you so much for being here with us.

[00:49]  Jada:
Yeah, thanks for having me.

[00:50]  Jenifer:
So, you recently gave a presentation at the International Avian Influenza Summit, that took place here in Fayetteville. And that is what sparked my interest to have you here on Food, Farms & Forests with us. Your presentation focused on the economic impact of avian influenza. And we’ll talk about the specifics of that in a little bit. But among other things, you also talked about the price of turkey and eggs and how it’s impacted by avian influenza, among other factors. And this is important to the consumer, of course, and how much we pay at the grocery store, but it also has broader implications because Arkansas is the third producer of turkeys in the nation, only behind Minnesota and North Carolina, in that order. In 2022, the turkey industry in Arkansas was valued at $614 million. So, it’s a big deal for the state. 

So, I want to start by talking about turkeys with the questions that everyone and their mom is asking you this time of the year is:how much are we paying for turkey this year? And based on your research, what is impacting turkey prices this year and overall?

[01:57]  Jada:
Everybody’s asking the same question because we’re all thinking about our bellies for Thanksgiving. And it’s a big holiday season around Thanksgiving and Christmas . And specifically, there’s a lot of turkeys that are consumed all across the U.S. and Arkansans are not immune to that.

And so, if I could give you a number, I would be playing the lottery, right? I don’t think I can give you a number. I can tell you that there’s a very strong likelihood that there’s a chance that the prices are going to be higher, that we’re going to see higher turkey prices per pound.

There might be some easing of that if there’s a little bit of … retail tries to ease it in terms of like, cost-competitive being like a loss leader. So, kind of reducing their price on turkey though their margins are profiteer … profitability on turkeys so they can get you into the store for the other goods that they might be able to capture. 

Turkey prices are going to be up for multiple reasons and one of the biggest things is we just have fewer turkeys. So, the supply of turkeys are down right now. And we look at not just turkeys that are being slaughtered, which are down, we also think about the poults, or the new turkeys that are being hatched. 

For August, we’re down 12%. We look at the poults placed, those little turkeys are down 10%, and we’re look at about 9% down in eggs.

And those numbers are, you know, you think about 10% of a supply of anything is going to be a pretty substantial hit. And so, if we look back, a couple of months ago, so poults being placed in June and July, June, June poults hatch was down 18%.
So, we’re thinking close to 20% of the birds that we normally last year that we had on the ground are not being produced this year.
And so, we are right now typically starting to slaughte, and harvesting all of the turkeys that we would have for Thanksgiving. And if those weren’t being placed months ago, you know, a couple months ago, then they’re not going to be able to be harvested now. Well, which has leads to reduction of supply.

And the biggest driver – there’s kind of two very large drivers of that. And one of those is going to be highly pathogenic avian influenza, which is going to have super high mortality costs. So, that’s, HPAI has a  high mortality of up to 90 to 95% in the US right now. Iso, when a flock is going to get that, those flocks are being decimated.

O ne of the other large drivers of some of these turkeys that are being out of the system are going to be turkey metapneumovirus.

And so then there’s a lot of this impact that is affecting the turkey industry, causing these kind of shortages and supply and in economics, you know,  supply and demand, that’s what drives prices. And so, if we have a shortage of supply or even a shorter supply, that means that even the demand is not going to change.

So, specifically whose grandma was going to say, ‘never mind, let’s not do turkey this year.’ They’re just going to go out and say, ‘well, we’re going to pay whatever we have to to get our turkey.’

There’s always some amount that’s in freezer storage. And so again, there’s a little bit of robbing Peter to pay Paul. And so, there’s a possibility that … I’m not trying to say the sky is falling and that there’s no turkeys, that you aren’t going to be able to get them, just that we’re probably going to face a little bit more of a higher price this year.

[04:52]  Jenifer:
Gotcha. And then the one of the biggest reasons is avian influenza, and aMPV, which is the metapneumovirus. Those are the biggest threats to turkey health, and then hence we have fewer turkeys. 

[05:06] Jada:
Yeah. And I think that one of the important parts is that HPAI has been going on since 2022. And we still see these outbreaks. But what we see is aMV,  it’s been more of the quiet, having a big issue quietly compared to the HPAI. 

So, I think the bird flu is it’s easier to say, it’s easier for us to talk about. And I think it’s in mainstream a little bit more commonly. And so, I don’t think that we’ve had as much of a large conversation about aMV and I think that we’re going to start having that conversation because what we have right now is you have an industry that has HPAI that’s being affecting it, and you have aMV on top of that.

And then you have to kind of increase demand for turkey meats across the populations of consumers over time. So, the poultry meat is a lean meat, right? It’s, it’s trending up. We have consumers that are looking for that. I don’t eat Thanksgiving turkey an awful lot, but I eat a lot of turkey sandwiches because that’s kind of my favorite. You know, my thing, when I go, I’m going to turkey sandwiches on my radar.

I think we’re looking for, people who don’t want to eat red meat, you know, might want to get a turkey burger instead. And so, I think you see these alternative uses for turkeys. And as we see these alternative uses increase that also increases the demand for those. And then, you know, that changes that supply dynamics.

[06:18]  Jenifer:
Is the same true for eggs? Is avian influenza impacting prices for eggs? 

[06:23]  Jada:
Yeah. So avian influenza is probably the main cause for the price of eggs. One of the things that we notice in eggs, we always notice when the prices go up, very rarely are we commenting when they come back down.

And so, if we look at the price dynamics and eggs, they do fluctuate a lot. They go up and down. It’s when they hit kind of a threshold where we start noticing, you know. They hit $2 and oh, wait a minute, how big, how expensive is my carton of eggs? Except that, you know, I also don’t comment when that goes down to $1.50, right. I don’t comment on that. 

And so, the dynamics for eggs are unique because they’re perishable and you can’t freeze these eggs, like a table egg. It’s going to have to be laid , cartoned and consumed within a relatively short period of window.

And so because of that, supply demand is really driving the use of those eggs. Specifically, HPAI has led to, large swaths of layer birds – so like the egg layer birds that are out of the system because they’ve contracted the disease and died. And so and of course, we don’t want to be passing on the disease either. And so, we don’t have these birds laying eggs and then there’s a biological lag to that.

So, for every layer that’s out of the system, it’s six months before I can officially replace that bird.

So again, we go back to robbing Peter to pay Paul example I gave a minute ago.  But here I can say make one house mold to maybe lay for a couple months, but at the end of the day, I’m taking the replacement birds that are supposed to replace that flock. 

And so I can move some around so there’s some dynamics within the industry, but at the end of the day, the piper calls and we still have to be able to pay that piper. And that piper comes in, ut there’s biological lags between the time of laying a chick and that chick being able to lay eggs. 

And so that’s, that’s, you know, five months before you get to the sexual maturity to lay an egg. And so, really you’re looking for 5 or 6 months before the market can respond to the replenishment of those birds.

And so what’s happening, what happens often is we have these, this long outbreaks, let’s say 5 million birds, 5 million layers that are affected, which is large. And we kind of say, okay, well, my, you know, my eggs, maybe our prices are affected.

But then six months later I forgot that that those millions of birds were out of the system.

And I forgot that, you know, a month later, another million birds came out the system and I forgot, right.

Like, so all of these build up, and our additive effects, all of that to be said. And so, when we start getting into the holiday season, we have both HPAI reducing our supply of eggs and available eggs. And then we also have huge demand because when do we eat eggs? For the most part. I eat them at the holidays. And I eat them …  basically the holidays and Easter, you know, Easter is eggs’ big special day.

But outside of Easter eggs, you know, you see, the holidays being these really big trends and the holidays for multiple reasons. I eat deviled eggs in my household. We also, we bake pies and cakes, and we make things that require eggs as ingredients because eggs are really great emulsifier. They’re great to cook and bake with. Anybody making some meringue knows you need some kind of emulsification to happen.

And so, when we start looking at this, not only do we need eggs to eat, but we also need them to bake and to do this and we’re doing that, our demand grows quite high. So, even though prices are up, we’re still the demanding them. And that continues to keep that pressure on those prices. 

So I think the last time I looked, September prices were up 85% over last year, you know, for September. And that’s partially because we’ve had these large-scale outbreaks of HPAI taking the demand out. Now, again, I’m not going to have a crystal ball and tell you what those prices are going to be. I don’t imagine they will be… a couple years ago in 2022, I got a lot of calls.  Prices were $4, 4 to $5 a carton. And, you know, we as consumers were in outrage. I don’t think we will see them go that high. I don’t think it’s going to be that bad. You know, so, Chicken Little, the sky’s not falling. But they probably are going to increase a little bit over the holiday season just because of the supply demand dynamics.

[10:20]  Jenifer:
Great. How do different options for eggs impact the market? You know, if we see the different boxes and the different colors and some are cage free and free range and all of those different things, how does that impact the market? 

[10:37] Jada:
So, we look at, across eggs, we’re buying table eggs. And then we have different grades. And that’s freshness, quality and sizes. And that’s a little bit related to the thinness of the shell, so there’s jumbo or large. And so, outside of those things, right, which are just grading standards, we also see things like organic or cage free. And so with any of those kind of alternative egg types – so, let’s call it conventional, which is just our traditional table eggs, and we have everything else which are these alternative ones, they come at a cost because in order to produce in an alternative way, it’s typically more expensive.

Systems aren’t created, in a vacuum, right? Conventional systems were created. and they’re created to be efficient and for efficiency. So, a cage-free system allows for, you know, birds to express themselves. It also leads to higher feed wastage. We have more square footage used for these birds; we need more land. You have higher mortality and morbidity rates within birds.

And so, because of that, I now have to compensate by either laying, having more birds in a house, or charging more for those eggs. So, when we start looking at those out of the, the price difference you’re paying for this, these welfare concerns that you have in the production practice or organic, you’re paying for a system for, your feed is coming from organic sources as well. 

And so then those have additional costs related in corn production and soybean production because we use fertilizers or we use implements like nitrogen or pesticides or things to reduce pests and herbicids to reduce molding of corn and soybean that we can’t use because it’s organic, which means that you have higher wastage of feed so we don’t grow as well. You end up having less yield per acre typically. And so that raises the cost that feed.

So, and I’m these numbers are not going to be perfectly accurate. But 20 years ago cage free was going to be 1%, 1%, 1 or 2% of the market. And now we’re looking at close to 10%, and 13% was last time I saw something.

So, we’re seeing a growing trend towards these types of birds. And part of that is you have the state of California that have mandated cage-free systems. You have groups like McDonald’s who said that they only want to buy from cage free systems. And you had this kind of push. But that does increase the total egg cost.

And one of the comments that I’ve said before is prices change all the time for all of our goods, but we very rarely see those price changes because typically they just reformulate the package size. You get one fewer Oreo and we don’t pay attention. We get one fewer other good. They shrink a little bit, the joke is shrinkflation. You can’t really shrink a carton of eggs. We expect 12 eggs in a carton. And what happens when there’s only 11? And so, the prices are going to really refle ct the differences in the cost. And we’re going to see that at the grocery store.

[13:32]  Jenifer:
When it comes to biosecurity measures, how much does that impact the prices that consumers are seeing?

[13:41]  Jada:
The direct cost for biosecurity is typically borne by the grower or the producer. And if we have a contract system, then it’s not going to directly affect. I will say, a longer-term trend that will have an impact. On a longer term if you need me to invest in a lot more, a more stringent biosecurity, then I have to be compensated more. And so there might be changes in those contracts as they move forward. But on the kind of short term, there’s no short-term effects that we’re going to see. 

From a producer, though they are seeing that. So, they’re seeing that biosecurity is going to cut into their bottom dollar. So, we’re looking at Arkansan turkey growers, and we’re looking you know, they’re, they’re seeing, they are making the same amount of money and they’re expected to invest more in biosecurity. 

Now there’s benefits that biosecurity because if you’re out of birds, that means you’re not making income and you’re hoping for identification. And there’s all these other systems, and you are functioning off of having a birds in a house that are going to grow and they’re going to be able to slaughter. And so, there are dynamics here where biosecurity does impact the growth of production of, of birds or eggs. But I don’t think what we see them at the grocery store, at least in the short term.

[14:53]  Jenifer:
Okay. Very good. What about backyard birds? And to people who are, you know, now, it’s very popular to have a chicken coop, and you have your own eggs at home. how does that impact the market?

[15:05]  Jada:
Yeah. So, I remember in 2020, everybody said they were going to go out and get birds. And I laughed a little because I had … the joke was they kept saying, when can I get eggs out of this? And you said, six months from now. What, six months? I have to wait six months? Yes. That’s how long it’ll take before you get eggs. And they’re like, what do you do until the middle? You feed them. 

So, on a cost effectiveness, very rarely are raising chickens going to be more cost-effective for you. And you’re paying for kind of all of that feed in terms of, that didn’t replace that table egg market. There’s still plenty of demand for the grocery store. 

I think that it helps ease it a little bit in areas where you can see compensation for people, maybe local producers having access to markets where, when prices are really high, then they could start being competitive. As those prices come back down, maybe not as much. I think that they can sell as niche products. 

One of the things from backyard flocks is HPAI doesn’t discriminate. It doesn’t discriminate between commercial and backyard flocks. And so, they’re facing the same risks of HPAI, and they’re facing all of these same risks. And oftentimes, they don’t have the same built-in structures for biosecurity. So, they’re not going to have the buildings that are trying to block out wild birds. These are birds that are free-range. So, outside. My mom has chickens out back and they peck the ground, right? They are potentially exposed to more wild birds, which puts them at risk of contracting HPAI.

And so, one of the things that we talk about in extension, and APHIS (Animal & Plant Health Inspection Service) and USDA has come out and said, you know report if you see your birds acting funny, go talk to a veterinarian, get them tested. 

Because one, you care about your birds. And also, there’s a possibility that if it does have HPAI  then you can help us follow and monitor and surveys for the other for other birds. And so maybe you can, quarantine your birds, maybe some will stay, you know, maybe disease free potentially. And so,  there’s benefits to reporting.

I think that that’s one of the sad realities I think of raising outdoor animals is they’re exposed to the conditions in the outside. 

And so, I think your initial question was, hey, does this impact the markets and not really from a larger standpoint. I think that they are part of a whole system, though. And I think part of that system is they’re going to compensate sometimes in very small ways. I think that they also are part of the entire poultry system that we have. And so, they are just as important about the communication of biosecurity. They’re just as important about disease prevention as those commercial birds that we care about.

The difference is the commercial layer with, you know, our commercial house with 30,000 birds, you know, we hear on the news. We don’t talk about the person who just lost 30 birds. But that person is just as important. And those birds are just as important for the health of kind of the total poultry system across the US.

[17:50]  Jenifer:
And that leads me to to my next question. As we look forward and as you look at the data you do have available, what trends do you kind of see happening? Maybe if there is anything you can tell or from what you have seen in the past, in the turkey and egg markets, if these diseases continue to be an issue.

[18:09] Jada:
What I see happening is that there’s, once we get these egg sets, once we get back to a regular level, I think that the industries are compensating a little. So,  the idea is that we’re going to expect there to be some outbreaks. Then we have a little bit extra placements so that we can kind of compensate for – we know that there’s going to be some houses that are going to be affected. So, we will just have two extra houses or – and I’m making those numbers up. It doesn’t matter. The point is that they’re going to compensate for potential losses. Which you know, if you don’t have any losses, that means you’re going to have a little bit of an oversupply. And so, they’re playing this game of what is the best optimal placement rates in order to fulfill the demand that we have while also making sure that we’re not over supplying ourselves.

So, people sometimes go back and point to egg prices that were $0.99 a carton and we go, oh, those were the halcyon days when things were egg prices were super cheap. And for what it’s worth, I would remind everybody those prices weren’t normal prices. Those prices were exceptionally low prices. 

What happened was in 2015, we had an HPAI outbreak or bird flu outbreak. And the industry compensated for all of the losses. And by the time those birds came on track and those birds came out and started laying eggs. We had a very large oversupply of eggs. And so then slowly at some point, you know, we can kind of say, well, you don’t need to replace all of those birds. And so, the egg prices were going to come back up anyways. 

So, I don’t think the benchmark is 99-cent eggs. But it’s also not $4 dollar eggs. And yeah. So, you know, so there’s, there’s a reasonable benchmark in the middle that it is a reasonable, expected price that we should have. And so just making sure that when we’re comparing our prices and comparing what, what should we expect going forward, I don’t think it’s 99 to eggs. Yeah. And I see the industry compensating.

[19:59]  Jenifer:
That makes sense. So, we are learning from what’s happened in the past. We have this data what we did, what didn’t work in the past. Now we’ll have a little bit of cushion, but make sure it is the appropriate amount so that it is supply and demand is balanced.

[20:15]  Jada:
Yeah, absolutely. Because I think today if you have oversupply, I have to move those products. Right? They’re perishable. which means that to move them at a lower cost, I think that they’re trying to optimize how to do that.

[20:26] Jenifer:
So, from what you said earlier, Turkey prices are going to be a little bit higher than last year, but nothing crazy. And eggs are also higher than last year at this point as of September.

[20:37] Jada:
Yeah. So, I would expect to see some increase compared to last year. I think we do expect to see a bit higher of turkey pricing, a bit higher of an egg price coming into the holiday season. And part of that was 2023 just didn’t have as much HPAI or avian influenza as 2024 has. And so we’ve had some, very large scale outbreaks in kind of across the U.S.

[20:58] Jenifer:
Is there anything else you’d like to discuss that I didn’t get to ask?

[21:02] Jada:
No. I mean, I think that for the issues facing the upcoming Thanksgiving season, I think you’ve asked the relevant questions that everybody does, which is are price is going to go up or down. Do we expect, why do we expect to see the dynamics that we see? Are these high prices here to stay? No, I think that they’ll come back down. I think that we’ve seen that, again, historically where prices go up because of supply is short, and supply comes back on online and we start seeing those prices come back down.

And so as a consumer, I also don’t want to see prices high. I would like those prices to come back down. And I think that the industry has done what they can to try to set as many eggs as they can, or set as many poults, or have the industry geared up to try to meet the demand as much as they can. But you can’t, you can’t stop a moving target. And so as HPAI and AMV move around, you kind of just have to face the problems as they arise.

[21:54] Jenifer:
Very good. Thank you so much for your time and sharing that knowledge with us.

[21:58] Jada:
Yeah, thanks for letting me be on today. And, I hope you all have a happy holiday season.

[22:02] Jenifer:
Yeah, yeah, you too! That was Dr Jada Thompson, associate professor of agricultural economics and agribusiness and a researcher for the Arkansas Agricultural Experiment Station, talking to us about the cost of turkey and eggs this holiday season and the economics behind it. Thanks for listening. I’m Jennifer Fouch. Don’t forget to subscribe.

[22:23] Intro/Outro:
The Arkansas Food Farms and Forest Podcast is produced by the Arkansas Agricultural Experiment Station, the research arm of the University of Arkansas System Division of Agriculture. Visit aaes.uada.edu for more information.