“There is no doubt producers are facing a perfect storm around rising costs and labour issues,” said Paul Kelly, MD of supplier Kelly Turkeys this week.
Although too early to gauge the exact number of birds on the ground for this year’s festive season, there were already indications volumes could be down – particularly among producers supplying the value tier, he suggested.
“It depends when [producers] will have bought their feed, but we are expecting the price of turkeys to be between 13% and 25% higher this year,” Kelly told The Grocer.
Premium suppliers would be better insulated against inflationary pressures, he added, pointing to the fact that his order books were full. But there was a definite “reduction at the lower end of the market”.
Kelly also reported supermarkets had ordered fewer fresh birds this year. Fresh turkeys had been a loss-leader for the mults in 2021, “so it is a good opportunity for the retailers to cut back as the fewer they sell the more money they will save”, he suggested.
A pivot towards more frozen birds would also be accelerated by shoppers on tighter budgets, Kelly added. It follows warnings first reported by The Grocer last summer, that chronic labour shortages would ultimately lead to more demand for frozen birds, which could be produced all-year round.
Kantar data shows supermarket turkey sales fell significantly last year, with whole turkey volumes declining 20.1% during the four weeks to 26 December 2021. Analysis by The Grocer of Assosia data last December also shows that the current inflationary pressures were already starting to take hold, with a third of birds more expensive than they were in the run-up to Christmas in 2020.
This week, the NFU warned escalating on-farm costs and concerns over labour and avian flu were “causing many [poultry producers] to consider their future in the industry”.
It followed comments from turkey farmer and NFU turkey group chair Michael Bailey of Cheshire-based Bailey’s Turkeys, who told the BBC’s Today programme on Tuesday he had decided to end production, with the loss of more than 40 jobs.
Many producers were doing the same, while others had cut production by as much as 50%, to mitigate the financial risk of the sector’s many challenges, Bailey said.
“There is definitely going to be a reduction in the number of turkeys available this Christmas,” he added.
Bailey also took aim at the government, which recently expanded its seasonal workers’ visa to include poultry workers.
The sector had called for 5,000 visas and for the visas to be arranged far earlier than they had been in 2021. However, the numbers confirmed by the Home Office were only 2,000, with the process subject to a tendering period – which would continue to make it “very, very difficult to get staff over to help process the seasonal turkeys” in time, he warned.