Cost squeeze to force up turkey prices

Soaring input costs driven by a volatile grain market will almost certainly force up turkey prices this Christmas.

Expected feed costs have increased by a whopping 19% this season for a standard 5kg white indoor hen reared over 18 weeks, according to figures from the annual NFU survey.

Other input costs have also risen, including a 10% increase in overheads, NFU poultry adviser Kelly Watson told a recent Anglian Turkey Association meeting at Prested Hall, Essex. Total production costs were likely to be in the region of £18 a bird – an increase of 9% on 2009, she said.

Prices for a 10kg bronze free-range stag reared over 25 weeks are even higher at £20.50 per bird, an increase of 12% on last year. “Feed costs have gone up by £48/t this year and no-one is willing to make a guess as to when they will go down. Intended prices to butchers are likely to range from £30-50 a bird.”

The number of birds placed this year is similar to 2009, according to the NFU survey. Free-range bronze turkeys again make up the biggest proportion of birds with a 48% market share.

A £50/t increase in feed costs equated to an additional £2 a bird for a 10kg bronze free-range stag, said Ms Watson. Although most producers held prices last year, many were now preparing to pass on at least some of the cost increase.

Essex producer Paul Kelly told the meeting he was considering a 5-7% increase. Like other producers, Kelly’s had held their prices in 2009, but the trade looked more positive this year despite the recession.

“The reality is that you have to put your prices up to match costs,” said Mr Kelly. “If you don’t it is a slow but sure way of going out of business. Based on where feed prices are at the moment, 7% is a very realistic increase.”