Low Turkey Prices During the Thanksgiving Season
Emily Wagner
With Black Friday coming up, many Americans are fixated on hunting for the best deals. Yet flying under the radar is the surprisingly low price of turkeys during the Thanksgiving season. While the price of turkeys remains fairly steady throughout the year, there is an annual decline starting shortly before Thanksgiving and lasting until Christmas.
Leading up to Thanksgiving, many stores advertise deals on turkeys and each store attempts to outdo one another with lower prices. As the industry for turkeys is an example of monopolistic competition, due to differentiation in types of turkeys offered and the large number of suppliers, there is a lot of competition between the suppliers. Most stores choose to offer low prices as they are focused more on maximizing their profit instead of the marginal revenue for each turkey. By lowering the cost of their turkeys, the poultry acts as a loss leader, or a product sold cheaper to attract more customers. If people come into the store to get a cheaper turkey, they are likely to buy other Thanksgiving necessities, such as stuffing, pie or cranberry sauce. Thus, the overall profit increases. Additionally, the price is able to be lowered as not only demand, but also supply increases. Throughout the year, wholesale turkey suppliers stock up on turkey and freeze it so they can sell a large amount to retailers and stores during the holidays. As there is a large amount of turkeys stored away, the supply is elastic. The amount of turkeys available also increases as many stores or businesses that do not usually offer turkey sell it for a limited time, thus increasing the number of suppliers.
Thanksgiving in itself is something to be excited for, and the low prices of turkey are just another thing about the holiday to gobble up. Thanks to increasing supply and demand, as well as companies using turkey as a loss leader, Americans can enjoy turkey for a truly great price.
Works Cited
Melton, Alex. “Low Wholesale Turkey Prices in 2017 Should Translate to Lower Costs for Consumers This Thanksgiving.” Economic Research Service, United States Department of Agriculture, 6 Nov. 2017, www.ers.usda.gov/amber-waves/2017/november/low-wholesale-turkey-prices-in-2017-should-translate-to-lower-costs-for-consumers-this-thanksgiving/.
Rampell, Catherine. “Turkey Economics, Annotated.” The New York Times, The New York Times, 20 Nov. 2013, economix.blogs.nytimes.com/2013/11/20/turkey-economics-annotated/.
“Why Do Turkey Prices Fall Just Before Thanksgiving.” US News, 24 Nov. 2015, www.usnews.com/news/articles/2015/11/24/why-do-turkey-prices-fall-just-before-thanksgiving.
“Why Turkey Prices Fall At Thanksgiving.” NPR, NPR, 23 Nov. 2013, www.npr.org/templates/story/story.php?storyId=246872425.
This is a really good topic to write on with Thanksgiving next week! I would have thought that price of a turkey would rise sharply during the holiday time, but it makes sense that stores would want to outdo one another by lowering their poultry price. I like how you included that the turkey market is a monopoly, something we've been talking about in class. I wonder how other types of markets, like grocery stores, are affected by the Thanksgiving/holiday rush? (Kat Van Hulle)
ReplyDeleteYou would think that with the huge increase in demand would cause the price to spike, but I didn't know that suppliers withheld their stocks of turkey. If the demand and the supply increases by the right amount, the price for the turkey wont change. However, its smart for the retailers to lower their prices for turkey, and maybe slightly bump up the prices for complementary goods, like cranberry sauce and stuffing, so that the retailers make a profit. Do stores do this at every point in the year, like with chocolate and teddy bears during valentines day, or hamburgers and chips during the 4th of July?
ReplyDeleteThis is a well timed blog post due to Thanksgiving quickly approaching. To me it is interesting that turkey prices drop during Thanksgiving, as their is an increase in demand for turkey. However, I do believe that the stores trying to out do one another can also be a good thing for stores as the lower price may increase demand for turkey even more. Also, I love the visual you inserted in the article, as it provides a representation of how much the turkey price drops this time of year. You also did a very nice job connected the low turkey prices to things we've addressed in class such as monopolistic competition and elasticity.
ReplyDeleteDrew Retherford
DeleteYou did a really good job with relating your post to what we have been learning about in class, such as maximizing profit and talking about a monopolistic market structure. It is interesting that turkey prices would decrease right before Thanksgiving, I would think that they would increase since the demand is so high this time of year. Looking at the graph I can see how low the prices really get and I wonder if other markets (like pie, potatoes, other typical "Thanksgiving foods") are effected too.
ReplyDeleteIn this post I thought it connected well to the unit we are currently studying. It doesn't really surprise me that the prices drop so much more due to the prices of all the substitutes. Typically, people like to have turkey on Thanksgiving and Christmas but if the price goes up this will have consumer decide their willingness to pay for turkey or eat something else that's good just because they decreased their prices. At my family, we have ham and turkey and we can decide between those two foods and if the price of turkey went up so much I would just rather have ham and save money. Overall, I thought this was a good post and a good topic because not many people think of economics and how it affects the market when consumers buy a turkey for Thanksgiving.
ReplyDeleteEmily, your blog post was full of excitement and detail! It was interesting to find out about this deal because as high schoolers we usually don’t buy the turkey...rarely do we even help make it. I am curious to know how much turkeys have been on the “off-season”. Around this time, people go out and hunt for their turkey or attempt to shoot one and create their own holiday supper. Would that increase or decrease the price of turkeys? Less people are buying and there are less turkeys for stores to sell, I wonder how much this would fluctuate the price both during Thanksgiving and in the summer. Thank you for the excited and pun-filled blog post!
ReplyDeleteLove you're post about Thanksgiving because it's honestly one of my favorite holidays! I did find it interesting that there is such a decline in prices of turkeys around this time since producers know that they are high on everyone's list. These price decreases are mainly due to the fact of competition between stores. Each store wants to sell the most turkeys so they lower their prices to absurd amounts, like 25 cents per pound. Another benefit to the lowering of turkeys is that there is more money to spend on other Thanksgiving favorites which may also have lower prices. The holiday season for companies are always the most hectic but also where they get their most revenue so it makes sense that these places want the best prices available.
ReplyDeleteThis was a very informational piece, nice job! I was shocked to hear that the price of turkeys actually decreases during the lead up to Thanksgiving. Given that an increase in demand usually leads to an increase in price I would think opposite. I also thought you did a nice job of relating turkey sales to monopolistic competition. Overall great post!
ReplyDeleteWow what an informative and entertaining piece! It is so interesting that turkey prices decrease during Thanksgiving, I would have thought the opposite since it's such a staple food for the holiday! I thought that the raised demand would lead to the stores driving up the prices, but it also makes sense that they need to lower their prices to attract buyers to their stores.
ReplyDeleteI definitely would have thought that turkey prices would have increased during the holidays as more people buy them around this time. However, it does make sense that they actually decrease because when one store decides to lower their price to get more people to purchase from them, others must too which shows the competition that drives prices downward. Like you mentioned though, in this case, not only do the sellers benefit but also the consumers as they gain more profit and we gain lower prices.
ReplyDeleteObviously the demand for turkeys around thanksgiving is far greater than any other time of the year. You may think that this would cause the prices for them to increase according to the law of demand, but this is not the case. Why? The likely explanation is that competing companies will lower their prices to beat their adversaries and appeal more greatly to the consumer.
ReplyDeleteAn additional thought is that after Thanksgiving and Christmas, there is a surplus of turkeys. As demand decreases, the turkey producers and grocery stores must lower prices accordingly to meet the falling prices.
ReplyDeleteIt’s interesting to hear that the prices of turkeys actually drops during November instead of rising. I would think that it would rise since suppliers can get away with charging more since everyone needs a turkey for Thanksgiving. This is also the opposite of most deals on Black Friday, where suppliers raise prices right before and then offer “huge” sales that put the price of the product where it should have been in the first place.
ReplyDelete