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Lower demand for large turkeys anticipated during Christmas 2020

October 9, 2020

1 mins read

 

The price of large sized (>9.5 kg) UK turkey increased by 10% q-o-q to £2.75/kg in the quarter ending 2nd Sep 2020. Turkey prices have risen since June, due to higher demand from the food sector, as the COVID-19 related lockdown restrictions eased. Similarly, the COVID-19 pandemic resulted in lower imports and sustained the drive to buy British produce, thus supporting prices.

Despite the current firm prices, some market participants are concerned that the UK market could be oversupplied with large-sized turkeys towards the end of the year, due to the likelihood of smaller than usual social gatherings during Christmas. The recent COVID-19 related lockdown restrictions are expected to keep more people at home rather than visiting their families during the festive period, resulting in weak demand for larger sized turkeys. Though, the demand for smaller birds (3 to 3.5 kg) is expected to be higher than usual.

Due to the concerns around a market surplus and lower demand for large-sized turkeys, some UK turkey producers reduced their production by 15-20% (between January and June). However, there were 6.2 million turkeys on farms, up 2% y-o-y in the same reported period. Therefore, considering the number of birds available on farm and the anticipated higher demand for smaller birds, processors may slaughter birds a week or two earlier than planned. This is likely to result in a higher number of small sized birds in the market. However, if processors do not choose to slaughter earlier than planned, this will result in more large-sized turkeys, consequently increasing supply.

Turkey is largely associated with Christmas celebration and overall, supplies are expected to be high during the festive season. If the pandemic related restrictions remain (rule of six), consumers would be unable to visit families or travel out for vacations. This may result in high retail demand as people might get more engaged in-home cooking during the festive period, particularly, the demand for smaller birds is expected to be higher than usual. However, the supply surplus in the market is likely to outweigh the high retail demand. As a result, during the festive period, turkey prices are expected to be marginally below prices in the previous year.

Topics: Meat & poultry
Rutika Ghodekar
Rutika Ghodekar

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