Speculation by financial markets in the past has driven up the price of commodities including oil, an indication of how volatile a market can be. News picked up a similar trend happening with turkeys, with the headlines proclaiming ‘investment bankers being blamed for costly turkeys’ in UK. The co-relation between financial markets and the price of turkeys is a result of the ‘wheat-based animal feed’ involved in between them.

Turkey farmers whose business thrives during the holiday season, as well as the turkey buying public were in for a surprise. They woke up to the news that the price of turkey would escalate due to the speculative rise in price of the wheat-based animal feed. Investment bankers, who have been at the receiving end of bonuses and rising anger from public, have come under the radar again, for influencing the price of animal feed. Turkey farmers are irate that the wheat-based animal feed has gone up to 177 pounds per tonne from 95 pounds per tonne. This in turn will increase the price of turkeys this Christmas almost 5-6% more.

The general tone of demand from the food market is that that the Government needs to step in regulate this crisis created by the investment banks and hedge funds. Ever since the financial crisis started and the volatility that came about as a result of this, the financial market has been trending towards pouring their money into a commodity driven market such as food. The retail costs of food and energy could be going up as a result of this.

 The annoyance is widespread that the common man has to bear the brunt of speculative prices, inflation and greed of the investment bankers.Turkey feed usually make up 60-70% of the cost of turkey business for farmers. With the increase in cost of animal feed and fuel price going up the livestock industry is on the edge. Despite the fact that there have been good supply of wheat from the US and other countries inflation has fueled this trend.

So this Christmas if you are in the UK, paying an arm and a leg for turkey you know why?

 Image credit: MorgueFile.com