FarmEcon LLC Monthly Turkey Supply-Use Tracker

The NTF Turkey Demand Enhancement Team has requested data on turkey consumption trends. USDA data is sufficient to calculate estimates of monthly total domestic and export use.

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 first of the month after the last data piece, export tonnage, is 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.


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)
-Exports (USDA/FAS GAIN Trade Database)
-Ending Frozen Stocks (USDA/NASS Cold Storage Report)
Comments: YTD domestic use is essentially unchanged from 2016. October-November 2017 domestic use is marginally above 2016.
Holiday seasonality is clearly evident in the raw monthly data. HPAI decreased 2015 domestic use, with recovery following as production rebounded. The 2017 12 month moving average domestic use is slightly above 2012-2013. 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: YTD and October-November total use are marginally above 2016. All of the increase is in exports.
The 2015 HPAI outbreak reduced production, domestic use and exports. Exports were reduced mainly by phytosanitary trade bans imposed by numerous countries. By 2017 total use had almost recovered to 2013 pre-HPAI levels.However, exports have not fully regained the 2015 losses. 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 weights

Monthly production is ready-to-cook young turkey produciton as reported in the USDA Poultry Production Report.
Comments: The industry has actually experienced two periods of depressed production since 2012. The 2013 episode was a delayed reaction to very poor 2012 corn and soybean harvests. The industry had started to recover in 2014, but then came the 2015 HPAI outbreak. It has taken until 2017 for the industry to get back to full production. That delay was partially attributable to breeding stock losses from the HPAI outbreak.
Comments: The industry has sustained an almost 500 million pounds per month moving average production level since late 2016. The 2016  production expansion sustained in 2017 resulted in depressed prices that have discouraged further production growth. YTD production through November is 0.3% higher than 2016.

Monthly turkey exports and 12 month moving average

Comments: The 2017 export recovery continues. Shipments declined in November, but that is normal. YTD Exports are up 9.9%.
Exports were at record levels prior to the 2015 HPAI outbreak, and have not fully recovered since. While the 2017 12 month moving average trend is very positive, we are still almost 15 million pounds per month below 2013. 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. September and October exports exceeded 60 million pounds, the best since HPAI struck.

Monthly turkey frozen stocks and 12 month moving average

USDA reports frozen turkey stocks monthly. Only frozen is reported, not refrigerated. Within frozen, stocks that are sold for export, but not shipped, are excluded.
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 will exceed 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. 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 difficult. What is apparent from the graph above is that peak frozen stocks have increased for the past two years, with the 2017 increase being particularly large.

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 the 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.

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.

Comments: The November 2017 days of stocks in inventory was well over the 10 pound normal, and significantly higher than any recent period. When stocks accumulate to this extent market forces will depress prices.

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. The sharp increase in breast and whole tom stocks is an indication of a supply-demand imbalance in this key white meat turkey sub-market. Similarly, the 2016-2017 increase in hen stocks also reflects a holiday whole bird supply-demand imbalance.

Annual turkey 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. For 2016 both the entire year and a January through September comparison with 2017 are shown.

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.