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Lower Production Equals Higher Prices for Turkey

Wholesale prices are going up, but the increase might not hurt consumers.

Justin Sullivan/Getty Images

Because supplies are running low, the average cost per Thanksgiving turkey is going up this year, reports the Chicago Tribune. Turkey production from January through September, measured in pounds, is down 3.3 percent compared to a year ago. That means wholesale prices for the bird have jumped 16 percent to a record $1.24 per pound.

Reasons for the drop in production, according to the report: the increased cost of feed. Farms are still recovering from the drought in 2012, which shot up feed prices and forced the reduction of output.

However, consumers might not be forced to shoulder the price increase:

Higher wholesale prices may not mean a bigger bill for consumers. Grocers probably will sell birds "well below" costs to lure shoppers, said Jennifer Bartashus, a Bloomberg Intelligence analyst. Retail whole frozen turkey averaged $1.584 a pound in September, the lowest for that time of year since 2010, according to the Bureau of Labor Statistics.

"They're generally loss-leading items," Bartashus said. "The low turkey price is the enticement to get people into their store."

No matter who takes the hit for an increase, prices should be lower for next year's holiday season. The price of feed is going down, and the USDA reportedly estimates production will rise 3.2 percent to a level not seen since 2008.

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