U.S. Thanksgiving turkey dinner to be easy on the wallet
By P.J. Huffstutter
CHICAGO (Reuters) - Americans will be able to enjoy relatively cheap Thanksgiving turkeys this year, thanks to many retailers locking in their costs before a drought this year drove up U.S. feed prices.
And retailers are determined to keep prices for the traditional Thanksgiving main course as low as possible, even though sky-high corn prices have nearly doubled the cost of producing a pound of turkey meat this year.
Offering attractive prices for turkey can help retailers such as Wal-Mart Stores Inc and Supervalu Inc lure customers into their stores for other Thanksgiving staples such as turkey stuffing, cranberries and sweet potatoes, industry sources said.
"Like the rest of the industry, we're seeing an increase in the prices on turkeys," said Mike Siemienas, spokesman for Supervalu Inc, the third-largest U.S. grocery store operator. "We continue to work with suppliers to ensure we're getting the best price possible for our customers."
Retail prices for frozen turkeys have barely moved in recent weeks. Whole frozen turkeys were selling for $1.62 a lb in September, up from $1.57 a lb at the same time two years ago, according to the U.S. Department of Agriculture's Economic Research Service.
One reason for that is many producers' contractual prices with retailers were set this spring when feed was far cheaper as U.S. farmers began planting what looked like would be a record corn crop.
The expectations for a bumper autumn harvest evaporated as the worst drought in half a century devastated crops and sent corn and soybean prices to record highs this summer.
The impact of higher feed costs are beginning to show up at some supermarkets that did not lock in pre-drought prices. Continued...