Welcome To The Strongest Month Of The Year For Equities Historically

The month of November is in the books. We came into the month with the longest Dow losing streak in 35 years and many concerns over the U.S. presidential election. In the end, the fears didn’t materialize and equities had a big move higher.

Here is a summary of what happened last month:

• November was a great month for equities, as the S&P 500 gained 3.4%—its best monthly gain since a 6.6% gain in March. It was the best return in November since a 5.7% bounce in 2009.
• As good as the month was for equities, it was that bad for bonds as rates spiked. The Barclays Global Aggregate Total Return Index was down 4% for the worst month on record going back to 1990.
• The S&P 500 went the entire month without a 1% drop, only the third time that has happened the past 20 years during November.
• Small caps had a huge month, as the Russell 2000 gained 11.0% for the largest monthly gain since a 15.0% jump in October 2011.
• During the month, the Russell 2000 (RUT) gained 15 consecutive days for only the fifth time since 1979, but the record of 21 straight green closes from 1988 remains safe.
• Turning to sectors*, financials gained 14.0%, for their best monthly gain since a 14.3% advance in October 2011. Industrials, energy, and materials all led as well. Utilities and real estate lagged as higher rates lowered demand for higher yielding assets. Consumer staples also lagged, as money rotated away from more defensive sectors.
• All four days of Thanksgiving week were green, something that interestingly has now happened in three consecutive election years.

December is known for many things, but from a financial point of view, the best thing might be that it has been a historically strong month for stocks. Per Ryan Detrick, Senior Market Strategist at LPL Financial, “December is the feel-good time of the year and Santa tends to come for equities as well, as no month is higher more often or up more on average. Not to mention the Dow has been lower each of the past two Decembers, and since 1896, it has never been lower three years in a row.”

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Here are some points to remember:

• December has been historically one of the strongest months for equities. Going back to 1950**, the S&P 500 has averaged a gain of 1.6% and been higher 76% of the time; both are the best out of all 12 months.
• When the S&P 500 has been up for the year heading into December, the average return in the month jumped to 2%. When the year has been down heading into the month, the average return dropped to 0.8%.
• The catch is the S&P 500 has been lower in December during the past two years for only the sixth time in history (going back to 1928). It has never been lower for three consecutive years.
• It is rare to see a large pullback during this month as well, as since 1950, the average return when the month is negative has been only -2.1%, the smallest loss out of all 12 months.
• Incredibly, since 1950, only once has the S&P 500 closed the month of December beneath the low close from the month of November.
• Going back to 1950, the S&P 500 has never had its weakest month of the year during the month of December. In fact, it has only had the 11th and 10th worst months of the year seven times.
• The last time December was the worst month of the year for the Dow was in 1916, when it dropped more than 10% during World War I.

 

 

 

 

IMPORTANT DISCLOSURES

Past performance is no guarantee of future results. The opinions voiced in this material are for general information only and are not intended to provide or be construed as providing specific investment advice or recommendations for any individual security. The economic forecasts set forth in the presentation may not develop as predicted. *As measured by S&P 500 sub-indexes. **The modern design of the S&P 500 stock index was first launched in 1957. Performance back to 1928 incorporates the performance of predecessor index, the S&P 90. Investing in stock includes numerous specific risks including: the fluctuation of dividend, loss of principal and potential illiquidity of the investment in a falling market. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a nondiversified portfolio. Diversification does not ensure against market risk. Because of their narrow focus, specialty sector investing, such as healthcare, financials, or energy, will be subject to greater volatility than investing more broadly across many sectors and companies. The S&P 500 Index is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. The Barclays U.S. Aggregate Bond Index is a broad-based flagship benchmark that measures the investment-grade, U.S. dollar-denominated, fixed-rate taxable bond market. The index includes Treasuries, government-related and corporate securities, MBS (agency fixed-rate and hybrid ARM pass-throughs), ABS, and CMBS (agency and non-agency). The Dow Jones Industrial Average Index is comprised of U.S.-listed stocks of companies that produce other (non-transportation and nonutility) goods and services. The Dow Jones Industrial Averages are maintained by editors of The Wall Street Journal. While the stock selection process is somewhat subjective, a stock typically is added only if the company has an excellent reputation, demonstrates sustained growth, is of interest to a large number of investors, and accurately represents the market sectors covered by the average. The Dow Jones averages are unique in that they are price weighted; therefore, their component weightings are affected only by changes in the stocks’ prices. The Russell 2000 Index measures the performance of the small cap segment of the U.S. equity universe. The Russell 2000 Index is a subset of the Russell 3000 Index representing approximately 10% of the total market capitalization of that index. This research material has been prepared by LPL Financial LLC. 

 

 

Market Update: November 21, 2016

© Provided by CNBC

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  • Stocks higher to begin holiday-shortened week. Equity markets are modestly positive this morning after gaining for the second week in a row; though the S&P 500, Dow, and Nasdaq each fell 0.2% on Friday. The healthcare sector (-1.1%) underperformed, led lower by biotech, while no other sector moved by more than 0.5%. Overseas, both the Nikkei and the Shanghai Composite advanced 0.8% overnight, while European markets are ticking higher in afternoon trading. Elsewhere, last week’s strength in crude oil ($47.65/barrel) has carried over as the commodity is up another 2.8% ahead of next week’s official OPEC meeting in Vienna, COMEX gold ($1214/oz.) is up 0.4%, and the yield on the 10-year Treasury is a couple of basis points lower after finishing the week at 2.34%, its highest close in over a year.

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  • Final earnings push to the finish line. With just a couple dozen S&P 500 companies left to report Q3 2016 results, Thomson-tracked earnings for the index are tracking to a 4.2% year-over-year gain, representing a 5% upside surprise. Excluding the energy sector’s earnings declines, earnings on pace for a solid 7.5% year-over-year gain. As impressive as the Q3 upside has been, the minimal 0.8% drop in estimates since October 1 for the next four quarters, including a small increase over the past week, has been particularly noteworthy and we think bodes well for the next two or three quarters.

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  • Another weekly gain for the S&P 500. The S&P 500 gained 0.8% for the week last week, but what is more worthwhile is it did this after gaining more than 3% the week before. Incredibly, this is now 10 consecutive times that the week after a 3% gain was green. Leading the way again were small caps and mid caps, as both the Russell 2000 and S&P 400 Midcap indexes closed at new all-time highs on Friday. The Russell 2000 is now up 11 consecutive days for the longest winning streak since 12 in a row back in 2003.
  • Holiday shopping preview. Although the market’s attention has been squarely on the election for the past several weeks, we should not forget how important this time of year is for the U.S. economy. Consumers are in good shape, with low financial obligations, steady job and wage gains, and high consumer sentiment measures. This, along with retailers’ back-to-school shopping increases and the solid stock market performance in 2016, suggest the National Retail Federation’s 3.6% forecast for year-over-year holiday sales growth may be doable. We do not necessarily expect these sales gains to translate into outperformance for the consumer sectors, but we do not expect them to spook markets.
  • Housing, manufacturing, and the consumer in focus this week as investors await the OPEC meeting. While a high-level OPEC meeting is set for Monday and Tuesday this week, the official OPEC meeting in Vienna isn’t until November 30. Until then, investors will digest Black Friday sales figures, which have become much less important in recent years, along with data on home sales, durable goods orders, and the Markit Purchasing Managers’ Index (PMI) for manufacturing. The Federal Reserve Bank (Fed) will release the minutes of its November 1-2, 2016 meeting this week as well. Other than the key German IFO data for November, it’s a fairly quiet week for international events and data, aside from a speech by European Central Bank (ECB)President Mario Draghi early in the week.
  • Welcome to Thanksgiving week. Historically the week of Thanksgiving has had a slight bullish bias, as do most trading days around major holidays. Over the past 20 years, the average return during the week of Thanksgiving for the S&P 500 has been 0.8%, positive 65% of the time (13 out of 20). Looking at the day-by-day performance, Monday has the best average return, up 0.5%, although Wednesday has been higher more often, 70% of the time. Surprisingly, the best Thanksgiving week over that timespan was 2008, when all four days were green and the S&P gained 12.0%. The worst? All four days in 2011 were red and the index fell 4.7%.

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Monday

  • OPEC Meeting in Vienna
  • ECB’s Draghi Speaks in Strasbourg

Tuesday

  • OPEC Meeting in Vienna

Wednesday

  • Durable Goods Orders and Shipments (Oct)
  • Markit Mfg. PMI (Nov)
  • FOMC Minutes
  • Eurozone: Markit Mfg. PMI (Nov)
  • Japan: Nikkei Mfg. PMI (Nov)

Thursday

  • Germany: Ifo

Friday

  • Advance Report on Goods Trade Balance (Oct)

 

 

 

 

Important Disclosures: Past performance is no guarantee of future results. The economic forecasts set forth in the presentation may not develop as predicted. The opinions voiced in this material are for general information only and are not intended to provide or be construed as providing specific investment advice or recommendations for any individual security. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and cannot be invested into directly. Stock investing involves risk including loss of principal. A money market investment is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although money markets have traditionally sought to preserve the value of your investment at $1 per share, it is possible to lose money by investing in such a fund. Investing in foreign and emerging markets securities involves special additional risks. These risks include, but are not limited to, currency risk, political risk, and risk associated with varying accounting standards. Investing in emerging markets may accentuate these risks. Treasury Inflation-Protected Securities (TIPS) are subject to interest rate risk and opportunity risk. If interest rates rise, the value of your bond on the secondary market will likely fall. In periods of no or low inflation, other investments, including other Treasury bonds, may perform better. Bank loans are loans issued by below investment-grade companies for short-term funding purposes with higher yield than short-term debt and involve risk. Because of its narrow focus, sector investing will be subject to greater volatility than investing more broadly across many sectors and companies. Commodity-linked investments may be more volatile and less liquid than the underlying instruments or measures, and their value may be affected by the performance of the overall commodities baskets as well as weather, disease, and regulatory developments. Government bonds and Treasury bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. However, the value of fund shares is not guaranteed and will fluctuate. Investing in foreign and emerging markets debt securities involves special additional risks. These risks include, but are not limited to, currency risk, geopolitical and regulatory risk, and risk associated with varying settlement standards. High-yield/junk bonds are not investment-grade securities, involve substantial risks, and generally should be part of the diversified portfolio of sophisticated investors. Municipal bonds are subject to availability, price, and to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rate rise. Interest income may be subject to the alternative minimum tax. Federally tax-free but other state and local taxes may apply. Investing in real estate/REITs involves special risks such as potential illiquidity and may not be suitable for all investors. There is no assurance that the investment objectives of this program will be attained. Currency risk is a form of risk that arises from the change in price of one currency against another. Whenever investors or companies have assets or business operations across national borders, they face currency risk if their positions are not hedged. Technical Analysis is a methodology for evaluating securities based on statistics generated by market activity, such as past prices, volume and momentum, and is not intended to be used as the sole mechanism for trading decisions. Technical analysts do not attempt to measure a security’s intrinsic value, but instead use charts and other tools to identify patterns and trends. Technical analysis carries inherent risk, chief amongst which is that past performance is not indicative of future results. Technical Analysis should be used in conjunction with Fundamental Analysis within the decision making process and shall include but not be limited to the following considerations: investment thesis, suitability, expected time horizon, and operational factors, such as trading costs are examples. This research material has been prepared by LPL Financial LLC.

Weekly Market Commentary: November 30, 2015

Provided by geralt/Pixabay
Provided by geralt/Pixabay

American markets were relatively quiet during Thanksgiving week but there were fireworks in China’s markets.

Late in the week, media outlets reported the China Securities Regulatory Commission was conducting inquiries into several securities firms as part of an anti-corruption crackdown triggered by last summer’s wild market gyrations. The news sizzled through China’s stock markets. The Financial Times wrote:

“It’s like a trip down memory lane… if memory lane was vertical… The Shanghai Composite was down by as much as 6.1 percent in late trade, with the tech-focused Shenzhen Composite following suit, down by as much as 6.8 percent. It would be Shanghai’s biggest one-day fall since August 25, when the benchmark slumped by 7.7 percent, writes Peter Wells in Hong Kong.”

U.S. markets were sanguine, in part, because there was little activity on Friday, according to The Wall Street Journal. It also may have something to do with an upward revision in third quarter’s gross domestic product (GDP), which measures the value of all goods and services produced in the United States. On Tuesday, the U.S. Commerce Department reported GDP increased at an annual rate of 2.1 percent during the third quarter, an improvement over the initial estimate of 1.5 percent.

Next week may be a doozy. The European Central Bank is expected to introduce additional monetary easing measures, while the U.S. Federal Reserve provides additional clues about the timing of its monetary tightening measures, said The Wall Street Journal. We’ll also get news about U.S. home sales, automobile sales, chain store sales, factory orders, and employment. It’s likely to be an interesting week.

Data as of 11/27/15 1-Week Y-T-D 1-Year 3-Year 5-Year 10-Year
Standard & Poor’s 500 (Domestic Stocks) 0.1% 1.5% 1.1% 14.3% 12.0% 5.2%
Dow Jones Global ex-U.S. -0.8 -4.7 -7.9 2.2 0.8 1.3
10-year Treasury Note (Yield Only) 2.2 NA 2.2 1.7 2.8 4.4
Gold (per ounce) -2.3 -11.8 -11.5 -15.4 -4.9 7.9
Bloomberg Commodity Index -0.4 -22.3 -28.2 -17.4 -11.2 -6.8
DJ Equity All REIT Total Return Index 0.9 2.2 3.5 12.0 12.4 7.3

S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT Total Return Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.

It Seems that Shopping has Joined Food, Football, and Family

Shopping
Pear285/Wikimedia

Did you log on and do a little holiday shopping last Thursday while your holiday feast was cooking? If so, you are not alone. MarketWatch reported consumers spent $1.1 billion between midnight and 5:00 p.m. eastern time on Thanksgiving Day. That was a 22 percent increase over the year before.

After taking a break to give thanks, gorge on Thanksgiving delicacies, and enjoy family time, consumers fired up their devices again – more than one-third of sales were made via smart phone or tablet – for round two in the online shopping arena. On Friday, between midnight and 11:00 a.m. eastern time, they spent another $822 million. That’s 15 percent more than last year. In total, Black Friday sales were expected to be about $2.6 billion.

By Friday morning, out-of-stock rates were reported to be double the level they normally reach this time of year. So, prepare for the possibility shoppers may be rabidly seeking more than one extremely popular gift item as we head deeper into the holiday shopping season.

That’s a more welcome turn of events than 1953’s glut of unsold turkeys. The Fiscal Times reported Swanson got started in the frozen dinner manufacturing business when it finished Thanksgiving with 260 tons of extra turkeys. Its solution was to package sliced turkey with trimmings on aluminum trays. In 1954, the company sold 10 million frozen turkey dinners and a new industry was born.

Since investors were concerned about weaker than expected retail sales just a couple of weeks ago, if retail spending continues to be strong in coming weeks, it could affect investors’ confidence and outlook.

Weekly Advisor Analysis: November 25, 2015

Equity markets posted their best weekly gain of the year after the Federal Reserve continued hinting a decision to hike rates is likely at its mid-December meeting. More importantly, the Fed is signaling the pace of liftoff will be moderate at best. The S&P 500 gained 3.3 percent, the Dow Jones Industrial average rose 3.4 percent, and the NASDAQ Composite gained 3.6 percent.

Sub-Prime Auto Lending Revs Up

History doesn’t repeat itself; it rhymes, so the saying goes. This is why financial regulators are growing increasingly concerned about the rise in subprime lending in the auto industry. In the six months leading up to September, more than $110 billion of auto loans were originated for borrowers with less than “good” credit, or a FICO score below 660. Of that, more than $70 billion went to those whose credit is scored as “bad” (below 620), according to data released last week by the Federal Reserve Bank of New York. This is nearly the same level reached in 2006 just before the financial crisis. This comes as auto lending as a whole has been reaching historic heights. Following the financial crisis, lending began recovering in 2010 and, by 2013, it returned to its pre-crisis peak. Earlier this year the amount of originated loans topped $1 trillion for the first time. The deteriorating credit quality of the aggregate loan portfolio is having little impact, at least so far. According to data from the New York Federal Reserve Bank, just 3 percent of auto loans were more than 90 days delinquent in the third quarter. This has actually improved from 5 percent nearly five years ago.

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Inflation Shows Up at Thanksgiving Table

The average cost of a Thanksgiving dinner is rising this year by nearly 1.5 percent according to the 30th annual price survey conducted by The American Farm Bureau Federation. For the first time ever, the average cost of the turkey dinner for ten people will top $50. This compares to just under $29 in 1986 and between $49 and $49.50 where the price has hovered since 2011. The study uses information from 138 volunteers who check prices at grocery stores in 32 states. The largest component of this basket is obviously turkey, and this year the average price of a 16-pound turkey will run $23.04, up more than 6 percent year-over-year. Most products included in the basket have increased since last year with the notable exception being milk. The average price of a gallon of whole milk has dipped nearly 14 percent to $3.25. The price of canned pumpkin pie mix rose only 2.5 percent, surprising many experts who expected a shortage due to heavy Midwestern rains in late summer.

WAAAA

Stock Splits Lose Favor

Late last week, Nike became only the 11th company within the S&P 500 to announce a stock split this year. By this time in 2000, more than 83 companies had done so. Stock splits have historically been a way for management teams to attract retail investors with a more attainable price per share. Now, however, now that seems less important to CFOs. As the average stock price has risen since the housing crisis, so have the number of companies with per share prices above $100. Within the S&P 500, 114 companies now have a share price above $100. This compares to just 12 in 2000. In recent years, stock splits have taken a back seat to share buybacks. According to FactSet, S&P 500 companies used just over 5 percent of their cash towards share repurchases in 2000. That number has climbed to nearly 7 percent so far this year.

Fun Story of the Week

Beginning in 2016, the brewer of Guinness is changing the recipe of its famed Irish stout for the first time in more than 250 years by removing one ingredient: fish guts. The move comes after months of protests by vegan beer lovers. Guinness, like many other brewers and wineries has used a substance called isinglass for centuries to clarify the beer and help stabilize yeast. Isinglass is a collagen derived from the swim bladder of a fish. While most of substance is filtered out during brewing, traces of the fish bladder remain in every pint. Fortunately, newer technologies are taking hold in the brewing community, and the usage of isinglass is being phased out by Guinness and others.

Cost of Thanksgiving Dinner Hits a Record High

Food: Whether in a restaurant or at the grocery store, it’s going to cost more to fill your belly next year. The U.S. Department of Agriculture expects prices to increase about 3 percent next year, whether you eat out or at home. Restaurant costs may go up further thanks to several regulatory and policy trends, including the pushback against minimum wage laws, banks on certain types of packaging and various tax increases.
Robert Linton/iStockphoto

Getting together with friends and family for the holidays may be priceless, but putting food on the table costs money.

The average cost of Thanksgiving dinner for 10 people exceeded $50 for the first time since the American Farm Bureau began tracking it in 1986.  The total price of the feast increased 70 cents (or 1.4 percent) to $50.11 from 2014. The average cost of food for the celebration has remained around $49 since 2011.

The most expensive item on the list is a 16-pound turkey, which costs an average of $23.04 this year. That’s up $1.39 from last year, or 6.42 percent, the largest percentage increase of all the grocery items.

The increase is largely due to production issues caused by a bird flu outbreak in the Midwest earlier this year. But turkey prices have been falling in the last week, the AFB said, as retailers aggressively market them for the holidays.

Fears that a pumpkin shortage from wet weather would affect Thanksgiving pies also appear to be overblown. A 30-ounce can of pumpkin pie mix increased 8 cents this year to $3.20.

Other item prices that went up this year included a 14-ounce package of cubed bread stuffing (up 7 cents), two nine-inch pie shells (up a nickel), and 3 pounds of sweet potatoes (up a penny).

The prices of milk and miscellaneous ingredients experienced the largest year-over-year price declines. The price of whole milk dropped 51 cents, or 13.6 percent, and the price of miscellaneous ingredients, declined 30 cents, or 8.6 percent.

Prices of a half-pint of whipping cream, 12 ounces of fresh cranberries, a tray of carrots and celery, and a pound of green peas collectively fell 17 cents.

While the price of Thanksgiving dinner remains relatively stable, the cost of traveling for the holiday is getting cheaper. Prices for the most popular Thanksgiving flights are down an average of 9 percent this year, and gas prices are at their lowest level in seven years.

Written by Beth Braverman of Fiscal Times

(Source: Fiscal Times)

Thanksgiving Turkeys Cost More Than Ever After Bird Flu Wipeout

  © Janet Hostetter/AP Photo   

To make sure all 15 of the Busch’s Fresh Food Market stores had enough turkeys over 22 pounds (10 kilograms) to sell for Thanksgiving this month, meat buyer John Taormina began ordering in January. He didn’t end up with a single one of the big birds, which last year accounted for more than a third of what the Michigan company sold for the holiday.

After the worst-ever U.S. outbreak of avian influenza destroyed almost 8 million turkeys earlier this year, there are fewer of them, and those that remain are smaller than normal. That’s boosting wholesale costs for grocers to a record, and consumer prices are the highest ever for this time of year. Americans will eat about 49 million turkeys for Thanksgiving holiday meals on Nov. 26, or roughly one of every five that will be consumed all year.

“The larger-sized birds will be difficult to get this year,” Taormina said, adding that the biggest available at his upscale stores will be 20 pounds to 22 pounds, which is big enough to feed about 15 people. Turkey is “center-of-the-plate for this holiday, so typically families get together and they’re looking for the bigger-sized” birds, he said.

Some turkey farmers haven’t recovered from a six-month outbreak that ended in June, and many were forced to sell birds earlier than normal and at smaller sizes, said Russ Whitman, vice president at commodity researcher Urner Barry in Bayville, New Jersey. Production fell to a five-year low, and the September weight decline for turkeys was the biggest for that month in four decades, U.S. Department of Agriculture data show.

Wholesale, fresh turkey hens surged 18 percent from a year earlier to a record $1.5993 a pound as of Nov. 6, and frozen turkeys were up 5.6 percent at $1.309 a pound, after touching an all-time high of $1.385 a week earlier, USDA data show. The agency estimates birds at slaughter weighed 29.7 pounds in September, down 2.8 percent from a year earlier and the biggest decline for that month since 1973.

While shoppers probably can still find deals because most supermarkets offer seasonal discounts on turkey to lure customers, the USDA reported prices for frozen hens averaged a record $1.08 a pound as of Nov. 12, up 21 percent from a year earlier.

Fresh turkeys that account for 20 percent of Thanksgiving sales are especially hard to find because most were born after outbreak ended, according to Tom Elam, the Carmel, Indiana-based president of consulting firm FarmEcon LLC. The number of baby turkeys, or poults, placed into flocks in July were down 7 percent from a year earlier, USDA data show.

With tighter supplies, buyers are competing for supply. The Cornwell family in Marshall, Michigan, which raises as many as 40,000 birds a year, is getting calls for the first time from large food distributors and food-services companies that usually only buy from major producers, farm owner Patti Cornwell said.

Inventory Decline

There were 268 million pounds of whole turkeys in cold storage at the end of September, the least for the month since 2006, according to the USDA. Supplies of all frozen turkey were the lowest in three decades. Domestic production will drop 3.2 percent this year to 5.57 billion pounds, the lowest since 2010, according to USDA estimates.

It’s not all bad news for consumers. Thanksgiving is a big holiday for deals on turkey, which means retailers may eat some of the higher costs. For example, ShopRite, a chain of grocery stores in the northeastern U.S., is offering a free turkey to customers who spend $400 between Oct. 18 and Thanksgiving.

At Busch’s Fresh Food Market, the company plans to keep retail prices unchanged from last year and will absorb a 15 percent increase in turkey costs, the biggest Taormina’s said he has seen in 20 years of buying meat.

Other seasonal staples like cranberries and potatoes probably won’t be more expensive than last year, according to Corinne Alexander, an agricultural economist at Purdue University in West Lafayette, Indiana. Lower electricity and natural-gas prices also will help keep costs in check for cooking a Thanksgiving meal this year, she said.

No Shortage

Butterball LLC, the largest U.S. turkey processor, expects to sell “a very similar” number of turkeys this holiday season as 2014, or about 20 million birds, said Jay Jandrain, executive vice president of sales. The Garner, North Carolina-based company produces about a quarter of the turkeys sold in November and December. Because most of the whole birds are sold to retailers early in the year, current wholesale prices probably don’t reflect their total costs, he said.

Prestage Farms Inc., based in Clinton, North Carolina, sold about a third of its whole-bird hens on the spot market for about $1.30 a pound, a record, said Ron Prestage, president of operations in South Carolina and Mississippi. The remaining birds fetched $1 to $1.10, about the same as last year, he said. The company produces about 420 million pounds of turkey annually, with about 10 percent used in the whole-bird market. Annual production will be about 1 percent below the company’s normal output of 14 million turkeys, after a hatching supplier in Minnesota was short on eggs due to the outbreak, Prestage said.

“I absolutely think that consumers are going to see a higher price of turkeys, but they probably won’t see all of it because they commonly don’t,” Prestage said.

Written by Lydia Mulvany, Linly Li, and Magan Durisin of Bloomberg

(Source: Bloomberg)