The United States is the world’s largest turkey producer and largest exporter of turkey products. As of 2016 the United States was second in turkey consumption, behind only Israel. (ERS).
According to the USDA, turkey production in 2016 was just under 7.5 billion pounds, up nearly 5 million pounds since 2015. The total value of the turkeys produced during 2016 was more than $6 billion, up nearly $5 million since 2015 (NASS 2017).
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 2015 were (by number raised): Minnesota, North Carolina, Arkansas, Indian and Missouri. Minnesota produced more than 41 million turkeys, and North Carolina produced more than 31 million turkeys (National Turkey Federation, 2017).
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.
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.
The average price received by producers was 82.5 cents per pound in 2016, compared to 68 cents per pound in 2011 (NASS, 2017).
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.
Vertically integrated companies dominate the turkey industry. Those companies control the turkey from production through processing. The industry is concentrated.
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.
National Agricultural Statistics Service (NASS) 2017.
Global Agricultural Trade System, Foreign Ag Service (FAS), USDA.
National Turkey Federation
Poultry Production and Value, National Agricultural Statistics Service (NASS), USDA.
U.S. Poultry and Egg Association
Links checked September 2017.