Turkey farmers hit hard by feed costs

With the cost of feed at all-time highs, the 60-member turkey cooperative in Sanpete County has decided to kill all the birds on its farms and freeze them.

On Friday, the co-op will close the Moroni Feed Co. processing plant and lay off its nearly 400 employees for four months with the hopes that the market will adjust more favorably for the farmer.

As a result, people who prefer fresh birds at Christmas will be out of luck if they want to buy turkeys the Moroni Feed Co. sells under the Norbest brand. Fresh turkeys only will be available during Thanksgiving. Frozen turkeys will be available during the holidays and afterward.

"This will be the first time we won't have fresh turkeys for Christmas for a long time," said Utah Commissioner of Agriculture Leonard Blackham, who has a turkey farm in Sanpete County.

Blackham expects to lose 10 cents a pound after feed costs are subtracted from turkey sales. Blackham and others in the turkey industry declined to discuss how much farmers expect to earn per pound this year, after costs of processing, packaging, marketing and retail profits are subtracted, saying the information was proprietary and the industry is competitive.

Utah shoppers this year can purchase a frozen, self-basting young tom turkey for $1.29 a pound at a local grocery store, about the same price as last year, according to a survey by the Utah Farm Bureau Federation for the American Farm Bureau Federation.

But corn prices rose to $7 a bushel over the summer, as traders speculated on commodities markets and swaths of land were devoted to corn ethanol production, about 25 percent of corn, said Brandon Olson, chief financial officer for the Moroni Feed Co. and chairman of the board for Norbest, which sells turkeys for cooperatives in Utah and Nebraska.

A turkey's diet is about 60 percent corn, 24 percent soy, which also fluctuated in price in recent months, Olson said. Soybeans for January delivery closed at $8.97 a bushel Wednesday on the Chicago Board of Trade.

"Our membership did make a decision in July to finish raising the turkeys they had on the ground and raise turkeys through the Thanksgiving time period, which is so crucial for our industry," Olson said. "And then discontinue for a period of three to four months, which is historically during the lowest demand and price time period of the year. And it was due to the input costs."

Moroni Feed Co. last year processed 5 million turkeys, the vast majority of the state's commercially grown turkeys. Gross sales last year were $151 million in feed and turkeys.