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.
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