Talking turkey: Why the cost of the holiday dinner has risen so much in recent years
The Soaring Cost of Thanksgiving: Families Feel the Pinch
The skyrocketing prices of food in recent years are set to hit families nationwide as they prepare their Thanksgiving feasts. The reasons behind the surge in food prices include supply-side factors, such as the increased cost of transporting grain and livestock due to higher fuel prices, as well as the overall inflationary environment. In fact, inflation has soared in recent years, with the consumer price index rising by over 18% since the beginning of 2020.
Thanksgiving: A Costly Affair
Thanksgiving serves as a stark example of how food prices have risen alongside headline inflation. According to the American Farm Bureau Federation, the average cost of a Thanksgiving meal for 10 people this year is $61.17. This figure represents a 4.5% decrease from last year’s cost of $64.05. However, compared to November 2019, the cost of a Thanksgiving dinner has increased by a staggering 25%.
“While shoppers will see a slight improvement in the cost of a Thanksgiving dinner, high inflation continues to hammer families across the country, including the nation’s farmers,” said AFBF President Zippy Duvall. “Growing the food families rely on is a constant challenge for farmers because of high fuel, seed, fertilizer, and transportation costs, just to name a few.”
The Shopping List
The American Farm Bureau’s survey includes a variety of Thanksgiving essentials, such as turkey, stuffing, sweet potatoes, dinner rolls, butter, peas, cranberries, a tray of veggies, and pumpkin pie with whipped cream.
The main reason for the 4.5% decrease in the average price of a Thanksgiving dinner this year is the falling turkey prices. Turkey is the most expensive item in the holiday spread, with a 16-pound bird costing $27.35.
According to food economist David Ortega, the declining price of turkey is the primary factor driving down the overall cost of a Thanksgiving meal this year. He explains that wholesale turkey prices have dropped by around 30% to 40% per pound compared to last year, resulting in savings for consumers at the grocery store.
However, it takes time for these cost decreases to be reflected in grocery store prices. Betty Resnick, an economist involved in the AFBF project, attributes the significant drop in turkey prices to the decline in avian influenza cases. Last year, there was a severe outbreak of bird flu, which decimated flocks across the country and drove up the cost of poultry. This year, with fewer avian influenza cases, the supply of turkey has increased.
The Impact of Energy Prices
Rising energy prices have been a major contributor to overall inflation in recent years. Higher gas prices and increased operational costs for food-making operations and slaughterhouses lead to higher transportation costs for food items, which, in turn, necessitate price increases by producers.
Resnick explains that farms require fuel to run tractors, while slaughterhouses rely on energy to maintain proper lighting and temperature. Additionally, higher natural gas prices affect food prices because many fertilizers used in farming are made with natural gas.
The Demand Side and Inflation
While inflation rates have eased slightly in the past year, they remain high and rising. The demand side has played a significant role in driving overall inflation. During the pandemic, low interest rates and stimulus payments led to increased spending as people stayed home and had more disposable income. The Federal Reserve is now working to raise interest rates to curb demand.
On the supply side, the war in Ukraine has also impacted food inflation. The conflict disrupted factories and reduced farm production in Ukraine, a major agricultural region known as the “breadbasket of Europe.” Notably, the invasion caused a rapid increase in cooking oil prices, as Ukraine is a significant producer of sunflower oil.
As families prepare for Thanksgiving, the rising cost of food serves as a reminder of the challenges faced by both consumers and farmers in an inflationary environment.
What government policies and individual actions can be taken to mitigate the impact of rising food prices and ensure a stable and affordable food supply
N the grocery store aisles. As Ortega points out, “there can be a lag between the wholesale price and what consumers ultimately see at the retail level.”
Aside from turkey, other Thanksgiving staples have seen price increases. For example, the survey found that the cost of stuffing, sweet potatoes, dinner rolls, and a tray of veggies has increased since last year. This may be due to various supply-side factors, such as increased transportation costs and higher prices for key ingredients. Additionally, the impact of inflation on food prices cannot be ignored.
Thanksgiving is a time for families to come together and enjoy a delicious meal, but for many, the rising cost of food poses a significant financial burden. Families must carefully budget and make tough choices in order to afford the traditional feast. This is especially true for low-income families who may already be struggling to make ends meet.
Looking Ahead
There is no easy solution to the problem of rising food prices. However, experts suggest that government policies can play a role in mitigating the impact on families. For instance, policies that address the underlying causes of inflation, such as addressing the rising cost of fuel and improving transportation infrastructure, can help stabilize food prices in the long term.
In addition, support for farmers and agricultural producers is crucial. These individuals face numerous challenges in growing and distributing food, and providing them with assistance can help ensure a stable and affordable food supply. This includes measures such as research and development funding, access to affordable loans, and support for sustainable farming practices.
At the individual level, there are steps families can take to minimize the impact of rising food prices. This may include shopping smartly, seeking out discounts and sales, and considering alternative meal options that are more affordable. Additionally, reducing food waste can also help stretch the family budget.
Thanksgiving is a time to give thanks for what we have, but it is also a reminder of the challenges many families face. As we gather around the table this year, let us not forget those who are struggling to put food on their plates. Through collective efforts and thoughtful policies, we can work towards ensuring that every family can enjoy a bountiful and affordable Thanksgiving feast.
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