Turkey producers deal with price woes, disease Output is dropping in North Carolina, nation's top supplier

December 07, 1997|By KNIGHT-RIDDER NEWS SERVICE

CHARLOTTE, N.C. -- Turkey production in North Carolina - the nation's top turkey producer - is dropping as the industry battles baffling health problems, profit-crippling feed costs, flat demand, excess inventories and weak selling prices.

"It's been a rough two years," said Russ Whitman, editor of Urner Barry Publications, which tracks daily farm-product supply, demand and pricing. "Most of the industry has been in the red."

Turkey consumption has flattened after a decade of growing consumer demand. From 1987 to 1996, the number of turkeys U.S. farmers raised increased by more than one-fourth. This year, production is expected to level out just a hair higher than last year.

North Carolina - one of the states hardest hit by a mysterious turkey disease - will raise fewer turkeys for the second year in a row. This year's flock is expected to be about 10 percent less than 1992's high of 62 million birds. South Carolina's turkey business has seen significant increases, but remains much smaller.

'We have adequate supply'

"We have adequate supply," said Julie DeYoung, a spokeswoman for the National Turkey Federation in Washington.

The supply is more than adequate for the rest of the year: Monthly turkey inventories - the amount in cold storage - have been running 30 million to 50 million pounds above normal, Whitman said. Genetic engineering has produced turkeys with bigger and bigger breasts.

And turkey processors are using less meat and more fillers, such as basting solutions.

"We have more product coming at us," Whitman said. "The buyer sees these [inventories], and says, 'I'm not going to pay as much. You're swimming in the stuff.'"

Breast meat, for example, sold recently for an average $1.45 a pound. That's 30 percent off the 1995 price of $2.07 a pound.

Meanwhile, the turkey industry is getting squeezed by high feed prices, especially soybeans. Prices should be down because this is harvest time. Pricing could reflect uncertainty caused by the phase-out of Depression-era farm-price supports.

"The pricing isn't reflecting the cost of production," said Gail Price, a spokeswoman for WLR Foods, the nation's No. 2 turkey producer.

The industry also has lost millions of dollars to a mysterious disease that kills turkeys. Spiking mortality, as it is commonly called, first showed up in 1991 in Union County, N.C. There is no diagnosis and no cure for the disease, which researchers say is not harmful to humans. Researchers don't even know what causes the disease.

In March, in a drastic step to control the frustrating illness, WLR cut off 45 farmers, most of them in Union County. When the company, based in Broadway, Va., stopped supplying the farmers with turkeys, they had no way to pay for their turkey equipment.

Many did what farmers most dread: They took "town" jobs - jobs off the farm.

'We'll survive'

Bill LaRock, who got into poultry after a long career in the military and private industry, is selling off land and whatever else he can to pay off the $73,000 he still owes on his turkey business. LaRock, 63, thought turkeys would be good retirement-income producers. Now his Social Security benefits go to paying off his poultry debt. His military pension helps ease the financial pain, and he never forgot the thrifty habits learned growing up poor.

"Our newest car is an '83 model," said LaRock, a Stanly County, N.C., farmer. "We'll survive."

WLR, which three years ago bought Cuddy Farms in Marshville, N.C., won't restock farmers cut off because of the disease until there's a cure. That's probably a long way off.

This summer, the industry and researchers agreed that a particular virus seems to play a major role in spiking mortality. WLR is seeing a lot of the virus in its Virginia flocks.

"It ... was similar to what the turkey industry had observed in the early '90s in the Union County area," said Price. "But it's not the equivalent of the disastrous effect that our farms experienced down in North Carolina."

Birds can be tested for the virus, which is important because then growers know early on they are infected. There is no cure, but the birds can be quarantined or killed to halt the spread.

"The game plan is to try to control, if not eradicate, what we can measure," said Jean Pierre Vaillancourt, an associate professor researching the disease at North Carolina State University. "We know it's a bad bug, so we might as well get rid of it. Hopefully, in the process, we will get rid of something else."

There's plenty else to be concerned about. Industrywide, even flocks that test negative for the virus aren't as healthy as they should be. There also seem to be growth problems - birds that eat as they should but never grow to the expected weight.

"The stunting remains a mystery," Vaillancourt said. "The industry remains challenged."

Turkey facts

Feeding frenzy: The two main ingredients in turkey feed are corn and soybeans. Here are the average selling prices for the two:

Corn:

1995 - $3.24 a bushel

1996 - $2.70

January 1997 - $2.69

February - $2.65

March - $2.79

April - $2.80

May - $2.69

June - $2.56

July - $2.43

August - $2.50

September - $2.47

Soybeans:

1995 - $6.72 a bushel

1996 - $6.85

January 1997 - $7.13

February - $7.38

March - $7.97

April - $8.23

May - $8.40

June - $8.16

July - $7.53

August - $7.25

September - $7.02

Prices: Here are prices per pound for fresh breast meat the first week of November:

1997 - $1.45

1996 - $1.38

1995 - $2.07

1994 - $1.70

1993 - $1.97

1992 - $1.71

SOURCES: U.S. Department of Agriculture; South Carolina Department of Agriculture; North Carolina Department of Agriculture

Pub Date: 12/07/97

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