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Turkey producers basted

Consumer price flat despite rising costs

By ASSOCIATED PRESS | Tuesday, November 25, 2008

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MILWAUKEE

Thanksgiving is bringing turkey producers little to celebrate this year, while diners anticipating the most poultry-centric of holidays may be grateful that they won't see much difference in the cost of their bird.

Meat producers have been struggling this year with higher costs for key ingredients like corn, soybeans and oil, part of why the cost of beef and chicken has risen so much. Turkey producers are facing all the same pressures, but don't have the same economies of scale and have to plan a year in advance for the one day a year that they count on most.

About 46 million turkeys will be eaten on Thanksgiving Day, about the same as in previous years, said Sherrie Rosenblatt, a spokeswoman for the National Turkey Federation.

"That's basically most Americans having turkey at the center of their plate," she said.

Consumers will see good prices this year, Miss Rosenblatt said, because retailers will again heavily advertise turkey at prices at which they may not make any money on the deal in hopes that shoppers drawn in by the lower price will buy lots of other products.

The American Farm Bureau Federation estimates that a Thanksgiving meal for the average gathering of 10 will cost $44.61 this year, up 5.5 percent from last year. That includes a 9-cent-a-pound increase for turkey, the group said last week, noting that the cost of the meal was still less than the same meal 20 years ago, when stripping out inflation.

Jennie-O is again touting its Oven Ready product line, featuring turkeys that go from the freezer to the oven already cleaned, seasoned and sealed in a cooking bag. Butterball, the market leader, will again be running its telephone hot line and is offering cooking tips via text message as well.

It's prime turkey-eating time in an industry that produced about $13.9 billion worth of product last year. But even the seasonal sales boost won't ease the industry's sagging profit margins.

Too much meat on the market, high prices for commodities and fuel, and weaker demand from restaurants have sliced into profits. Pilgrim's Pride Corp., the nation's largest chicken producer, is sagged by debt and using temporary credit lines to stay afloat. Some observers worry that Tyson Foods Inc., the world's largest meat producer, may also have too much debt.