Thanksgiving: Ham or Turkey? You Decide!

Spend Matters welcomes this guest post by Michael Liberty, of Mintec.

In September, Mintec wrote about rising Turkey prices in the U.S. and the increasing food bills in the run up to Thanksgiving and Christmas. Pork ham prices at the start of November were on average 47% cheaper than turkey prices, a good enough deal to get anyone’s appetite going. As a result, we have a tasty choice: go traditional with turkey or go succulent with roast ham.

Pork and turkey prices

In 2015, U.S. deadweight pork production exceeded initial expectations. Pork production fell in 2014, due to porcine epidemic diarrhoea virus (PEDv) outbreaks, causing prices to soar. However, producers who were not affected by the disease invested in infrastructure and increased pork production. The latest forecast for 2015 U.S. pork production is up 8% year-over-year to an all-time high record of 11.2 million tonnes. Subsequently, pork ham prices were staggering 48% lower y-o-y at the start of November.

On the flip side, 2015 was the year for poultry disease outbreaks in the U.S. Avian influenza (AI) outbreaks between December 2014 and June 2015 killed more than 7.8 million turkeys, reducing the supply on the market and preventing farms from cultivating. Many farms have since been approved to resume production; however, new turkey poults won’t be available until next year, limiting supply this Thanksgiving. With no further AI outbreaks reported to date, the price of turkey has been increasing with demand as we approach Thanksgiving and the Christmas period.

2016 is likely to further shake up the festive menu following the agreement and finalization of the Trans-Pacific Partnership (TPP). The TPP aims to remove all trade tariffs between the 12 countries involved, which includes the U.S., Australia and Japan. The TPP free trade deal was agreed upon on Oct. 5, with trade tariffs expected to be dissolved over the next few years, depending on the market. The U.S. is the second largest exporter of pork, and the new free trade deal could give U.S. pork exporters a competitive advantage over the E.U., the largest exporter. Higher pork exports could cause prices to increase, whereas turkey prices may remain largely unaffected, as only small volumes are traded between the countries involved.

This year’s festive period has had some exceptional circumstances causing the difference in price. As turkey production recovers in 2016, assuming there are no further outbreaks of AI, the gap in prices is likely to return to more of a steady seasonal trend. Even Santa may struggle to get his turkey dinner this Christmas; however, we can all sleep well knowing he can tuck into some pork ham.

Whether you choose ham, turkey or a vegan alternative, Mintec hopes your families have a fantastic time!

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