An Economist Chews Over Thanksgiving

As Thanksgiving preparations arrive, I naturally detect my thoughts veering to the evolution of need for turkey, technological modify inwards turkey production, marketplace position concentration inwards the turkey industry, together with toll indexes for a classic Thanksgiving dinner. Not that there's anything incorrect amongst that. [Note: This is an updated together with amended version of a post that was offset published on Thanksgiving Day 2011.]

The final fourth dimension the U.S. Department of Agriculture did a detailed "Overview of the U.S. Turkey Industry" appears to endure dorsum inwards 2007, although an update was published inwards Apr 2014 . Some themes nigh the turkey marketplace position waddle out from those reports on both the need together with furnish sides.

On the need side, the quantity of turkey per soul consumed rose dramatically from the mid-1970s upward to nigh 1990, but together with thence declined somewhat, but appears to bring made a pocket-sized recovery inwards the final few years The figure below is from the Eatturkey.com website run yesteryear the National Turkey Federation.

On the production side, the National Turkey Federation explains: "Turkey companies are vertically integrated, pregnant they command or contract for all phases of production together with processing - from breeding through delivery to retail." However, production of turkeys has shifted substantially, away from a model inwards which turkeys were hatched together with raised all inwards i place, together with toward a model inwards which the steps of turkey production bring instruct separated together with specialized--with some of these steps happening at much larger scale. The upshot has been an efficiency gain inwards the production of turkeys. Here is some commentary from the 2007 USDA report, amongst references to charts omitted for readability:

"In 1975, at that topographic point were 180 turkey hatcheries inwards the US of America compared amongst 55 operations inwards 2007, or 31 percentage of the 1975 hatcheries. Incubator capacity inwards 1975 was 41.9 1000000 eggs, compared amongst 38.7 1000000 eggs inwards 2007. Hatchery intensity increased from an average 33 one one thousand egg capacity per hatchery inwards 1975 to 704 one one thousand egg capacity per hatchery inwards 2007.

Some decades ago, turkeys were historically hatched together with raised on the same functioning together with either slaughtered on or unopen to where they were raised. Historically, operations owned the parent stock of the turkeys they raised field supplying their ain eggs. The increment inwards technology together with mastery of turkey breeding has led to highly specialized operations. Each production procedure of the turkey manufacture is at nowadays mainly represented yesteryear diverse specialized operations.

Eggs are produced at laying facilities, some of which bring had the same genetic turkey breed for to a greater extent than than a century. Eggs are straightaway shipped to hatcheries together with prepare inwards incubators. Once the poults are hatched, they are together with thence typically shipped to a brooder barn. As poults mature, they are moved to growout facilities until they attain slaughter weight. Some operations role the same edifice for the entire growout procedure of turkeys. Once the turkeys attain slaughter weight, they are shipped to slaughter facilities together with processed for meat products or sold every bit whole birds.

Turkeys bring been carefully bred to instruct the efficient meat producers they are today. In 1986, a turkey weighed an average of 20.0 pounds. This average has increased to 28.2 pounds per plane inwards 2006. The increment inwards plane weight reflects an efficiency gain for growers of nigh 41 percent."

The 2014 study points out that the capacity of eggs per hatchery has continued to rising (again, references to charts omitted):

"For several decades, the number of turkey hatcheries has declined steadily. During the final 6 years, however, this decrease began to deadening down. As of 2013, at that topographic point are 54 turkey hatcheries inwards the United States, downwards from 58 inwards 2008, but upward from the historical depression of 49 reached inwards 2012. The total capacity of these facilities remained steady during this current at to a greater extent than or less 39.4 1000000 eggs. The average capacity per hatchery reached a tape high inwards 2012. During 2013, average capacity per hatchery was 730 one one thousand (data records are available from 1965 to present)."

U.S. agriculture is total of examples of remarkable increases inwards yields over perionds of a few decades, but they e'er drib my jaw. I tend to hollo upward of a "turkey" every bit a production that doesn't bring a lot of chance for technological development, but clearly I'm wrong. Here's a graph showing the rising inwards size of turkeys over fourth dimension from the 2007 report.




The production of turkey remains an manufacture that is non real concentrated, amongst 3 relatively large producers together with and thence to a greater extent than than a dozen mid-sized producers. Here's a listing of transcend turkey producers inwards 2015 from the National Turkey Federation:

Given this reasonably competitive environment, it's interesting to complaint that the toll markups for turkey--that is, the margin betwixt the wholesale together with the retail price--have inwards the yesteryear tended to turn down about Thanksgiving, which plainly helps to maintain the toll lower for consumers. However, this designing may endure weakening over time, every bit margins bring been higher inwards the final twain of Thanksgivings  Kim Ha of the US Department of Agriculture spells this out inwards the "Livestock, Dairy, together with Poultry Outlook" study of Nov 2018.. The vertical lines inwards the figure demo Thanksgiving. She writes: "In the past, Thanksgiving vacation flavor retail turkey prices were ordinarily close annual depression points, field wholesale prices rose. ... The information betoken that the yesteryear Thanksgiving flavor human relationship betwixt retail together with wholesale turkey prices may endure lessening."

In the past, the US turkey manufacture has at some times suffers from outbreaks of HPAI
(Highly Pathogenic Avian Influenza): for give-and-take of the 2015 outbreak, run into the November 17, 2015 number of the "Livestock, Dairy, together with Poultry Outlook" from the US Department of Agriculture, Kenneth Mathews together with Mildred Haley offering some details. But for Thanksgiving 2018, furnish seems to bring remained rigid together with wholesale turkey prices bring stayed low.

For some reason, this entire post is reminding me of the sometime trace of piece of employment that if you lot wish to bring free-flowing together with cordial conversation at dinner party, never topographic point ii economists beside each other. Did I hollo that I brand an fantabulous chestnut stuffing?

Anyway, the starting dot for criterion inflation is to define a relevant "basket" or grouping of goods, together with and thence to rail how the toll of this handbasket of goods changes over time. When the Bureau of Labor Statistics measures the Consumer Price Index, the handbasket of goods is defined every bit what a typical U.S. solid buys. But i tin besides define a to a greater extent than specific handbasket of goods if desired, together with since 1986, the American Farm Bureau Federation has been using to a greater extent than than 100 shoppers inwards states across the province to estimate the cost of purchasing a Thanksgiving dinner. The handbasket of goods for their Classic Thanksgiving Dinner Price Index looks similar this:

The cost of buying the Classic Thanksgiving Dinner genuinely declined yesteryear a chip inwards 2018, fallingfrom to $49.12 inwards 2018 to $48.90 inwards 2018. The transcend trace of piece of employment of the graph that follows shows the nominal toll of purchasing the handbasket of goods for the Classic Thanksgiving Dinner. The lower trace of piece of employment on the graph shows the toll of the Classic Thanksgiving Dinner adjusted for the overall inflation charge per unit of measurement inwards the economy. The lower trace of piece of employment is relatively flat, which way that inflation inwards the Classic Thanksgiving Dinner has genuinely been a pretty proficient mensurate of the overall inflation rate.

Thanksgiving is a distinctively American holiday, together with it's my favorite. Good food, proficient company, no presents--and all these proficient topics for conversation. What's non to like?