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Indiana turkey producers climb in national rankings

 

By MATTHEW D. ERNST

Missouri Correspondent

 

WEST LAFAYETTE, Ind. — Many Americans will stuff themselves on turkey in the coming month. But Indiana’s turkey production, which reached a record level this year, is increasing not so much from holiday demand as from year-round global trends.

Indiana moved up in U.S. turkey production rankings this year; it is now the third-highest state by weight and value of turkey produced. The growth came as a major processor expanded.

"Indiana’s capacity for turkey processing increased by 50 to 60 percent in the last year," said Paul Brennan, executive vice president, Indiana State Poultry Assoc.

Most of the expansion supplies the new Farbest Foods Inc. turkey processing plant, which opened last December in Vincennes.

Farbest, which also operates a plant in Huntingburg, is one of the country’s largest turkey processors, according to the company. Perdue Farms, one of the largest U.S. poultry firms, processes turkeys in Washington.

Indiana farms raised 19 million turkeys for the year ended Sept. 30. That is up from 17.5 million the previous year, according to USDA. Only Minnesota, North Carolina and Arkansas produce more turkeys; Indiana produces more turkey meat, by total weight and value, than Arkansas. "Most of what we produce in Indiana are large toms for further processing," Brennan said.

Indiana’s focus on larger toms fits international market growth. According to the USDA Economic Research Service, U.S. turkey use is down more than a pound per capita since 2008. But international markets are sourcing more U.S. turkey. "Mexico is very important," Brennan said. And the Mexican market is showing strong demand for products processed from toms, like those grown and processed in Indiana.

Turkey exports have increased more than 100 million pounds since 2011; the USDA forecasts 840 million pounds of turkey will be exported this year. More than 60 percent of that is shipped to Mexico, where demand is growing for mechanically separated chilled or frozen turkey used to prepare products such as deli meats. "Consumers appear to prefer some of these products, which are considered to be healthier and lower in fat content than other deli meats," stated the USDA’s Mexico City post in this year’s poultry report.

Turkey meat exports to Mexico have increased 25 percent over 2013, from January through September, to total $352.4 million. Turkey exports are also increasing to Panama, Honduras, Guatemala and Belize this year. Exports to the UK and Spain in Europe also increased through September, as did exports to New Zealand and the Marshall Islands.

Next to North America, East Asia is the second most important export market. Last year, the U.S. shipped more than $100 million in turkey there. Exports to East Asia this year are down due to lower volumes demanded from China; exports to Hong Kong are up slightly.

Prices higher this year

 

The October average turkey price was 81.4 cents per pounds, according to the National Agricultural Statistics Service. That is 3.9 cents higher than September and 9.0 cents higher than a year earlier, tracking with higher meat prices overall.

Higher turkey prices, combined with somewhat lower feed costs, give some incentive for increased production. This increase should hold through 2015, when USDA projects 5.93 billion pounds of turkey produced – 3.4 percent higher than in 2014.

Live turkey prices dropped below 70 cents per pound in late 2012, staying in the 60-cent range for most of 2013. Prices rose above 70 cents earlier this year; the national average price is now above 80 cents.

Poultry marketers tap into cold storage holdings when prices rise. Whole turkey cold storage holdings are down this year – especially for toms, most often utilized for deli meats and similar products. At the end of August, whole tom cold storage stocks were 137 million pounds, down 29 percent from 2013. "Stock levels for every category of turkey cold storage holdings were lower than the previous year," the USDA October Livestock, Dairy, and Poultry Outlook stated.

Prices are much higher in one category: frozen tom drumsticks, averaging just under $1.00 per pound through this August. That is 34 percent above a year earlier, and prices for frozen turkey legs may increase more. "With stocks of turkey parts all below year-earlier levels, prices will continue to get upward price pressure until rising stock levels, which are expected in 2015 from higher production, start to reverse this trend," concluded the USDA October outlook.

11/19/2014