Turkey Prices Low, Despite High Production Costs
PRINCETON, MINN. (WCCO) – Step into Scott Heymer's turkey brood barn, filled with 5-day-old chicks, and the heat is the first thing you notice. On a bitterly cold November day, it's a constant and comfortable 91 degrees inside the barn.
"These birds will be 24 pounds," Heymer says as he reaches down and picks one up.
Heymer is an average-sized Minnesota turkey producer, raising about 150,000 birds a year. And when the birds are just starting to grow, the barn temperature is critical to their survival.
In fact, last winter's severe conditions required ten semi-loads of propane to heat his barns.
Not only did he burn thousands of gallons of propane, but prices were four and five times the average cost. His heating bill was enormous.
"You have to have it and maintain certain temperatures, and you can never run out," Heymer said. "Otherwise, it's disaster: That little bird isn't able to adapt."
But that's just part of his and other growers' rising production costs. Grain prices have been going through the roof. While corn prices have fallen off their $8-plus per bushel cost, soybean meal has more than tripled in price.
That's why today's turkey growers have invested heavily in technologies that bring greater efficiencies.
"If we had a 23-pound turkey, that was considered a good flock," he said. "Now, with genetics, nutrition and technology, at that same 21 weeks [into a bird's development] we can do 45 pounds."
But the costs of raising the birds aren't reflected in retail turkey prices in most grocery stores. Wholesale prices will average $1.25 per pound, while consumers can find whole frozen turkeys priced for as low as 89 cents per pound.
That's because many grocery stores use Thanksgiving's main course as a "loss leader," taking a financial hit to draw customers into their stores.
"They'll sell it for less than they paid for it," explained Steve Olson, the Minnesota Turkey Grower's executive director. "While that's great for consumers, on the other hand, it gives the impression that that's what it should cost year round."
Even still, Heymer has a message to consumers.
"Enjoy it, we'll make more," he said with a smile.
