FarmEcon LLC Monthly Turkey Supply-Use Tracker
Based on USDA data, monthly supply and use trends for the U.S. turkey industry are shown below. This information will be updated on about the 5th of the month after the last data pieces, export and import tonnage, are published by USDA.
These charts show annualized data for domestic use, total domestic and export use, and the major components that go into the use statistics. All data are taken from the USDA sources noted. This information is supplied gratis to the turkey industry as a sincere thank you for all the incredible support given to FarmEcon LLC since 2003.
Updates: As of February 11, 2018 complete 2017 data were added, and all charts and comments updated. Complete 2018 data are expected in early March 2019. Monthly imports were added to domestic use estimates. A chart on eggs in incubators and net poult placements is added. A chart on annual exports by destination is added. A chart on lost exports by country 2012-2017 is added.
All data through November 2018 were added and historical data updated on February 11, 2019. Updates are running about a month late following the government shutdown.
Overview - Domestic and total monthly turkey use
Monthly domestic turkey use and 12-month moving average
Monthly domestic use is calculated as:
Beginning Frozen Stocks (USDA/NASS Cold Storage Report)
+Production, RTC weight (USDA/NASS Poultry Production Report)
+Imports (USDA/FAS GATS Trade Database)
-Exports (USDA/FAS GATS Trade Database)
-Ending Frozen Stocks (USDA/NASS Cold Storage Report)
Comments: The 2017 domestic use 12-month moving average trend was flat compared to prior year. YTD 2018 moving average use data shows little change from 2017, but has trended slightly downward over the last year. A drop in September 2018 has added to that declining trend. Strong October production coupled with a seasonal stocks decline caused the spike in October use. However, November use declined, an unusual occurrence.
Holiday seasonality is clearly evident in the raw monthly data. HPAI decreased 2015 domestic use, with recovery following as production rebounded. Monthly domestic use is essentially unchanged since late 2016. The moving average takes out the seasonality and reveals the longer term use trend.
Monthly domestic and export turkey use and 12-month moving average
Monthly domestic and export use is calculated as:
Beginning Frozen Stocks
+Production, RTC weight
-Ending Frozen Stocks
Comments: Total 2017 use was marginally above 2016. All of the increase was in exports. Until September 2018 monthly total use and exports were little changed from 2017. Following several months of mediocre numbers strong October exports, a seasonal stocks decline and increased production led to the October spike seen in the last month graphed. October total use was almost 700 million pounds, a 4.4% increase over 2017. However, November domestic use and exports both declined from October. The decline is highly unusual, but when averaged with the October spike there is little change from prior years.
The 2015 HPAI outbreak reduced production, domestic use, and exports. Exports were reduced mainly by phytosanitary trade bans imposed by numerous countries. By 2017 domestic use had recovered to pre-HPAI levels. However, despite increases since 2015 exports have not fully regained the HPAI losses. See the last two charts on this page for export details. The moving average takes out the seasonality and reveals the longer term use trend.
Detailed components of domestic and total monthly turkey use
Monthly turkey production and 12-month moving average - RTC weight
Monthly production is ready-to-cook federally inspected turkey production as reported in the USDA Poultry Production Report.
Comments: Weak September 2018 production is offset by the October spike. The industry has sustained an almost 500 million pounds per month moving average production level since late 2016, but the moving average is slowly declining. Declining production is helping reduce stocks in the face of flat use.
Monthly eggs in incubators, net poult placements, % poult hatch placed and 12-month moving averages
Monthly eggs in incubators on the first of the month and net poult placements are from the USDA Turkey Hatchery Report. Percent of poults hatched during the month is net placements divided by hatched poults (not shown). Not all hatched poults are used for turkey production. The percent can be slightly over 100% if hatched poults are placed in the month following hatch.
Comments: Reflecting depressed 2017 pricing, 2018 saw a dip in eggs in incubators. In 2018 the percent of poults placed trended up until November. However, eggs in incubators and net placements have trended downward. The sector is operating at below potential production level possible if more eggs were placed and poults were to be placed.
Monthly turkey exports and 12-month moving average
Monthly exports are sourced from the USDA/FAS GATS database.
Comments: Exports were at record levels prior to the 2015 HPAI outbreak, and have not fully recovered since. While the mid-2016 to April 2018 12-month moving average trend was very positive spring and summer exports were weak. Maintaining the upward momentum will require regaining market access in countries that still ban U.S. turkey imports while also recovering lost volume in key countries like Mexico that have dropped their bans.
October 2018 exports set a new post-HPAI high, helping offset earlier weakness. November exports were much weaker than October, but still higher than preceding 2018 months.
Monthly turkey frozen stocks and 12-month moving average
USDA reports frozen turkey stocks monthly in the Cold Storage Report. Only frozen product is reported, not refrigerated. Within frozen, stocks that are sold for export, but not shipped, are excluded. New this month, weighted average spot parts prices are also shown. The parts prices are from USDA, weights are based on average carcass yields.
Comments: November marks a seasonal stocks low. November stocks increased in 2016 and again in 2017. Despite increasing exports, frozen stocks remain at levels not seen since 2013. The seasonal decline started on schedule, but year-end stocks exceeded last year's high level. Until market forces bring production and total use into better balance, high stocks levels will overhang the market, and limit upside pricing opportunities.
As recently as 2009 the industry has seen peak stocks higher than 2017/2018. Typical peak frozen stocks in the late 1990's exceeded 700 million pounds. However, in recent years increasing holiday season fresh bird sales have reduced the need for frozen birds, making comparisons to long-term historical data less meaningful. What is apparent from the graph above is that 2016/2017 peak frozen stocks increased, with the 2017 increase being particularly large. The increasing 12-month moving average that started in 2016 has leveled out and started to decline over the last few months. Nonetheless, large stocks continue to be a barrier to pricing improvements. Stocks will decline seasonally in September-November.
The positive and negative stocks pressures on pricing are evident in the chart.
Monthly days of turkey use in total stocks, and 12-month moving average
Another way of looking at stocks is how much is in frozen inventory relative to total monthly use. The lower the value, the tighter are the stocks relative to use. The statistic is calculated as:
Monthly total frozen stocks
÷ Monthly turkey total use
x Number of days in the month.
Example - Stocks are 300 million pounds, total use is 500 million pounds, and there are 30 days in the month.
300 ÷ 500 X 30 = 18 days of use in inventory.
The number represents days-adjusted buffer stock held in frozen stocks at locations surveyed by USDA. It shows how many days it would take to use up those stocks at the current use rate.
Comments: There is, naturally, significant seasonality to the statistic. During the year millions of pounds of frozen whole bird stocks are put back for the holiday season, then sold mainly in October-November. The typical peak stocks are in June or July at about 35 to 40 days. After that, frozen birds start to move to retail freezer space, and disappear from the USDA Cold Storage Report. The seasonal low is always November, and generally around 10 days.
The November 2017 seasonal low days of stocks in inventory was well over the 10 day normal, and significantly higher than any recent period. December 2017 to May 2018 stocks-use was also higher than prior years, but the 12-month moving average trend has flattened out. July 2018 was 39.7 days of use, lower than year-earlier stocks of 42.1 days. October 2018 days of use was 19.9, lower than the 21.1 of 2017. November stocks declined to 12.3 days use, almost back to the 10 day normal level.
Monthly turkey frozen stocks details by product type
In addition to total frozen stocks, USDA also publishes monthly estimates of several categories of turkey cuts and whole birds. These data are shown in the graph below.:
Comments: Frozen breasts are mostly a product from heavy toms. High levels of breast and whole tom stocks are an indication of a supply-demand imbalance in this key white meat turkey sub-market. Similarly, the relatively small 2016-2018 increases in hen stocks also reflect a minor holiday whole bird supply-demand imbalance. Early 2018 seasonal increases were not unusually large, but are started from a higher base than 2017 or 2016. Declining breast stocks are encouraging, as are the June-November numbers that showed declines. Hen stocks are also well below 2017, and in line with prior years. The sharp October-November declines in tom stocks are a positive sign for breast meat pricing prospects.
Annual turkey product export details by FAS product category
USDA data on 2012 to 2017 exports by FAS product category of turkey cuts and whole birds are shown in the graph below. Data are from the USDA/FAS GATS database.
Comments: Almost all of the chilled cuts and whole birds go to Mexico. All post-HPAI product exports dropped off, but Mexico chilled cuts volume has held up much better than the rest of the world. Leg volume, also predominately going to Mexico, has not fared as well. Export gains this year have been somewhat concentrated in the last half. September and October 2017 exports both exceeded 60 million pounds. Those are the best months since HPAI struck in the spring of 2015.
The major shortfalls within product categories are legs and "other".
Annual turkey exports by destination details, top 10 and all others
USDA data on 2012 to 2017 turkey exports by country of destination are shown in the graph below. Data are from the USDA/FAS GATS database.
Comments: Mexico accounts for about half of U.S. turkey exports, and volume has almost recovered to pre-HPAI levels in this key market. Exports have not recovered in many smaller volume markets and China. In 2012 and 2013 China imported over 40,000 tons of U.S. turkey. Imports since the 2015 HPAI outbreak have been zero. Recovering access to the China market would represent major progress in restoring exports to pre-2015 levels. Cuba and Russia, at one time also significant markets, have also not resumed U.S. turkey imports while volume to the Philippines has also dwindled.
Annual turkey exports by destinations with major 2012-2017 declines
USDA data detailing 2012-2017 lost turkey exports by country of destination are shown in the graph below. Data are from the USDA/FAS GATS database.
Comments: Since 2012 these four countries have, for the most part, stopped importing U.S. turkey products. While HPAI played a role, exports were already declining before the 2015 outbreak.
2017 turkey exports if 2012 lost China, Philippines, Russia and Angola volume is restored