Growers’ Insights: Food Fight

Published in FSD Update

The price to feed turkeys is going up, thanks in large part to government ethanol mandates.

Turkeys consume a steady diet of corn and soy meal. The combination of last year’s drought and government mandates for corn crops to be used as ethanol to blend with gasoline have led to high feed prices that make growing livestock very expensive.

“Devastating isn’t a strong enough word for how we’ve been impacted by the feed shortage,” says fourth-generation turkey farmer John Burkel, director of Northern Pride Inc., a grower-owned turkey processing facility in Badger, Minn. Burkel and his wife, Joni, produce 180,000 hens a year for the Thanksgiving whole-bird market. 

Corn and soy meal feed represent 70% of Burkel’s operating costs, which translates to $5,000 a day for the daily ration of 15 tons of feed needed for his “small, mom-and-pop sized” operation. “Those are difficult checks to write,” adds Joni, but the Burkels count themselves blessed to have escaped bankruptcy—some of their fellow growers haven’t been as fortunate. “We’ll live with the feed shortage until next year’s crops come in,” John Burkel adds. 

Burkel begins growing day-old “poults”—baby turkeys delivered from a breeder—in February, until they mature in 12 to 14 weeks. Processing begins around the end of April. 

According to Keith M. Williams, vice president of communications and marketing for the National Turkey Federation, the current consumer price for fresh whole turkeys is $1.16 per pound, slightly lower than the $1.34 posted in November 2012 and $1.36 in December 2011. 

Increasing costs

Even though the price for consumers to purchase turkeys has decreased, Burkel says his costs continue to rise.

“Next year’s turkey prices could be higher, if our industry grows fewer turkeys, even if the feed prices drop,” Burkel says. “However, passing these costs along to the consumer is hard to do, and you’re competing with other companies.” That means growers like Burkel often have to absorb these costs to remain competitive.

Electricity costs have almost doubled during the last five years, says Burkel, who hopes to reduce his monthly bill 80% by switching to LED barn lighting. 

“But if you really want to get me fired up, we can talk about ethanol,” Burkel says. “That’s really the reason the price of meat has increased.” Because federal government regulations require that corn crops be blended with ethanol for gasoline, farmers have diverted resources into growing corn for fuel instead of food. That in turn has increased the feed price for growers like Burke.

The housing environment

Ron Kardel, president of K3 Co., in eastern Iowa, raises both Nicholas and Hybrid turkeys for luncheon meat. Kardel needs to feed his 170,000 turkeys for four or five weeks longer than a Thanksgiving hen and uses feed supplements including salt, amino acids, vitamins, enzymes and fat.

About 10,000 turkeys live in each of Kardel’s environmentally controlled buildings, in Walcott, Iowa. “The buildings have screens that are covered with a curtain-type material, which moves up and down to control the temperature inside,” Kardel says. “Heat comes on in the winter, and summer requires fans and a sprinkler cooling system.”

Like Kardel, Burkel also houses his turkeys indoors. “The last time I had turkeys outside was 1994,” Burkel says. “The weather suddenly changed and we lost a bunch of them. It was sad. Plus, we have wildlife pred-ators as well as skunks and raccoons,
that carry a lot of weird diseases, like cholera. Turkeys are much safer indoors.”