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Demand and Supply in action - turkeys shrink as prices rise

Saturday, November 13, 2010

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Don’t worry if you sit down at the Christmas table this year and your turkey doesn’t go as far as it did last year, you haven’t had too much to drink! In fact the size of Bernard Matthew’s turkeys have shrunk. The cost of rearing the birds has risen dramatically due to increases in the price of feed and other bills for farmers.

This mirrors Innes’ blog on toilet paper last week where he was saying the size of toilet rolls has shrunk as the price stays the same. Charles Bourns, of the NFU Poultry Committee, said turkey prices have to rise to ensure a fair return for producers. He said: ‘Turkeys should be more expensive, because the feed prices have gone up something like 25 per cent compared to last year. The cost of feed equates to about 60 per cent of the cost of production.’ Tesco said they had two options to cope with higher turkey production costs: either put up the price or reduce the size of the pack.
It said: ‘We know that customers are looking to make savings so we have reduced the size specification on these frozen products rather than increase prices.’

Categories: RESOURCE SERIES Demand and Supply in Action
Tags: supply, gcse micro, costs of production