It is very hard to make money in the turkey business.
In fact, low profit margins are the main reason that Smithfield Foods (NYSE: SFD) sold off its 49% stake in Butterball, the top producer of turkeys in the United States, for $175 million back in September 2010.
But U.S. turkey producers would appear have been on a tear since 2003, collecting more and more revenue in almost each year and now having more than doubled after having had mostly flat incomes in the 14 preceding years.
That increase in revenue becomes even more exaggerated when we consider the falling volume of turkeys produced over that time:
Calculating the average income collected by turkey producers for each turkey they produce, we find that the average revenue collected per turkey has been rising at double-digit growth rates since 2003.
And yet, "Big Turkey" is struggling to profit.
Political Calculations is a site that develops, applies and presents both established and cutting edge theory to the topics of investing, business and economics.
Be the first to read Political Calculation's column. Sign up today and receive Townhall.com delivered each morning to your inbox.
Today, at 11:20 AM PT: Get the Market Movements in Advance; Williams Edge Webinar for August 22nd, 2014 | John Ransom
In Other News: Good News for Mexican Drug Cartels Seeking Some Slightly Used DOJ Hard Drives | Michael Schaus
Today, at 11:20 AM PT: Get the Market Movements in Advance; Williams Edge Webinar for August 21st, 2014 | John Ransom
11:20 AM PT: Get the Market Movements in Advance: William's Edge Webinar for August 19th, 2014 | John Ransom
Today, at 11:20 AM PT: Get the Market Movements in Advance; Williams Edge Webinar for August 18th, 2014 | John Ransom