Content provided by Matt Santini, CLS Portfolio Manager
I can’t believe I am going to belittle such a wonderful American tradition with micro economic jargon, but it is a must before the tryptophan really skews my thought process.
Economists are usually trained with a simple supply and demand curve providing a beautiful canvas. They are constantly reminded about the causes of shifts in said curve. In times of heightened demand, depleted inventories should drive prices up. Possibly the most egregious example of this phenomenon is seen in with rose prices around Valentine’s day. A dozen roses can easily cost you 100 percent more around that day. This can be attributed to the supply inelasticity of fresh roses. Their finite shelf life can command significant premiums in times of outsized demand. Sending your special someone three week old wilted roses is probably not the best method in which to muster praise.
What about the Meleagris Gallopavo (wild turkey)? Aren’t turkeys REALLY in demand around Thanksgiving? If we apply the same supply and demand logic that cupid so easily bestows with his arrows of demand, shouldn’t turkey prices inflate themselves in November? I am willing to bet there are more turkey’s consumed in November than there are rose petals strewn in sudsy waters in February. This is where the elasticity of turkey supply throws a butter ball. You see, turkeys can be frozen. An efficiently stock piled supply is really not impacted by a spike in demand. This actually allows retailers to discount the price of turkeys for the holiday. They call this a loss leader. This marketing tactic essentially baits you with cheap turkey, with the hopes that the high-margin products like cranberries, non-stick pans, and that platinum turbo baster find their way into your cart.
Finally, I take my turkey prep very seriously. If there is one piece of advice I could give to all of the amateur chefs alike it would be to BRINE YOUR BIRD. Only you can prevent a dry bird.