By Marsha Laux, content specialist, AgMRC, Iowa State University, email@example.com.
Revised May 2012 by Malinda Geisler, AgMRC, Iowa State University.
The United States is the world’s largest turkey producer and largest exporter of turkey products. While exports are a major part of the U.S. turkey market, domestic consumption is higher than any other country, at 16.2 pounds per person in 2011 (ERS).
According to the USDA, turkey production in 2011 was 7.32 billion pounds, up 3 percent from the 7.11 billion pounds produced in 2010. The total value of the turkeys produced during 2011 was $4.99 billion, up 14 percent from the $4.37 billion from the previous year. (NASS)
Raising turkeys in the early twentieth century was largely a seasonal endeavor. In the mid-1920s, development of poultry feeds allowed for large-scale, year-round production in protective environments. The 1950s and 1960s saw vertical integration commonplace in the poultry industry. The 1980s and 1990s saw improved production practices involving nutrition, disease eradication, genetics and meat processing.
Turkey production is scattered around the United States. The top five turkey-producing states in 2011 were (by number raised): Minnesota, North Carolina, Arkansas, Missouri and Virginia. Minnesota produced 46.5 million head followed by North Carolina with 32 million head. (NASS)
As of 2011, the United States continued to lead the world in turkey production with 2.6 million metric tons (MT), while the European Union-27 produced 1.9 million MT, Brazil produced 505,000 MT and Canada produced 160,000 MT.
According to the USDA, consumers are increasingly choosing poultry as their meat products. Over the last 10 years, the percentage of poultry meat consumption has grown more rapidly than red meats. In particular, consumption of turkey in the United States has gradually increased from 0.8 pounds per year in 1910 to16.2 pounds per year in 2011.
The National Turkey Federation says the U.S. turkey industry has experienced unprecedented growth during the past 20 years. The federation states, “Today’s consumer recognizes turkey’s nutritional value and enjoys turkey year-round, not just during the holidays." The turkey industry has developed from a single-product, holiday-oriented market to a year-round, diversified and value-added product line. Increasingly, turkey products are marketed in a variety of ways. In the deli markets, turkey has developed as a favorite for health-conscious consumers.
Distribution for turkey products in 2009 was as follows: 41.1 percent sold to grocery stores and other retail outlets; 27.9 percent sold in commodity outlets; 17.7 percent sold to foodservice outlets; and 6.4 percent exported (National Turkey Federation).
The average price received by producers was 50 cents per pound in 2009, compared to 56.5 cents per pound in 2008. The whole turkey continues to be the most popular turkey product, and in 2009, the average retail price for whole frozen turkeys in the United States was $1.39 per pound (National Turkey Federation).
Drivers of Demand
Turkey consumption has been increasing for the last decade. During that time, the largest growth of turkey product sales has been ground turkey. This is due to increased use of ground turkey as a lower fat substitute for ground beef. In addition to health concerns, taste and convenience are also factors that are driving the changes in consumption patterns of protein foods.
The poultry industry has responded to the consumer demand for taste and convenience by pre-cooking poultry items and selling into the convenience market. Examples of convenience marketing are turkey strips that are pre-seasoned and pre-cooked, and ready to eat in sandwiches. Additionally, pre-cooked turkey products such as deli breast, turkey bacon and turkey ham have all experienced substantial segment growth.
Food safety and environmental concerns are also factors in the increased consumption of poultry products, because consumers perceive these products to be more wholesome. Turkey companies are marketing more natural and “air-chilled” products in response to these concerns.
The United States is the largest exporter of turkey products. The United States exported 319,015 metric tons (MT) of turkey meat in 2011 valued at nearly $600 million. Mexico continued to be the dominant market for U.S. turkey meat, purchasing $359 million of meat and accounting for 59 percent of turkey exports. Likewise, China continued to be the second largest market for U.S. turkey, purchasing $53.6 million of meat. Hong Kong and Canada were other significant markets for U.S. turkey meat.
The majority of turkey products ship as lower valued turkey parts or ground or mechanically deboned meat. Many importers use the turkey products with other meats in sausage production.
The United States imports only a small amount of turkey meat ($29.7 million in 2011), mostly from Canada.
Vertically integrated companies dominate the turkey industry. Those companies control the turkey from production through processing. The industry is concentrated. The National Turkey Federation estimates that the 2010 leaders in the turkey industry are as follows:
|Top Five U.S. Processors||Processed Live Weight, in million pounds|
|Jennie-O Turkey Store Inc.||1,286|
|Cargill Value Added Meats||1,095|
|Farbest Foods, Inc||374|
Industry Life Cycle
Turkey producers have benefited from economies of scale associated with the industry’s horizontal and vertical integration. However, projected gains in efficiency over the next decade are smaller than in the past 25 years.
The U.S. consumer will continue to buy more meat but will use a smaller proportion of their disposable incomes for meat purchases. Poultry purchases will continue to rise as a share of consumer spending on meats, while beef and pork expenditures are expected to decline.
Emerging Developments and Issues to Follow
Disease outbreaks and related trade restrictions have slowed previously expected high growth in many U.S. animal product exports. Concerns in the poultry industry with avian influenza and Exotic Newcastle Disease are issues of concern for the poultry trade outlook.
Emerging markets to consider relate to demographics and convenience. Demographic changes in the United States will continue to see the growth of the Hispanic market. Poultry products are a staple of the Hispanic diet, with dark meat more readily accepted than in the general population. Due to continued growth of two-income households, products that offer additional convenience (ease of preparation) will also have greater acceptance in the food market.
Global Agricultural Trade System, Foreign Ag Service (FAS), USDA.
Poultry Production and Value Annual Summary, National Agricultural Statistics Service, USDA.
Prepared September 2004 and revised May 2012.