December 9, 2022

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Rising food costs mean taking a bite out of Thanksgiving dinner

Rising food costs mean taking a bite out of Thanksgiving dinner

In early November, Hays Culbreth’s mother sent out a survey to a few family members. She said she could only make two sides for their group of 15 this Thanksgiving and asked them to vote for their favourite.

Culbreth speculates that green beans and macaroni and cheese will make the cut, but his favorite—sweet potato casserole with brown sugar crust—won’t.

“Talk about ruining Thanksgiving,” Coolbrith, 27, a financial planner from Knoxville, Tennessee, joked.

Americans are preparing for a costly Thanksgiving this year, with double-digit price increases for turkey, potatoes, stuffing, canned pumpkin, and other staples. The US government estimates that food prices will rise 9.5% to 10.5% this year. Historically, they’ve only gone up 2% annually.

Lower production and higher labor, transportation and material costs are part of the reason; Diseases, severe weather, and the war in Ukraine are also contributing factors.

“This is really not a shortage. This is tighter supply with some good reasons for that,” said David Anderson, professor and agricultural economist at Texas A&M University.

Wholesale prices for turkey are at record levels after a tough year for US herds. A deadly strain of bird flu — first reported in February at a turkey farm in Indiana — has wiped out 49 million turkeys and other poultry in 46 states this year, according to the US Centers for Disease Control.

As a result, the per capita supply of turkey in the United States has fallen to its lowest level since 1986, said Mark Jordan, executive director of Jonesboro, Arkansas-based LeapMarket Analytics. Jordan expects the wholesale price of an 8- to 16-pound frozen turkey — the kind usually bought for Thanksgiving — to be $1.77 a pound in November, up 28% from the same month a year ago.

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Still, Jordan said, there will be plenty of whole birds on our Thanksgiving tables. Companies have shifted a higher percentage of birds to the entire turkey market over the past few years to take advantage of consistent holiday demand.

Not every product was affected to the same extent. Butterball — which supplies about a third of its Thanksgiving turkeys — said bird flu affected only about 1% of its production because of security measures it took after its last major bout of flu in 2015.

But Jordan said it can be difficult for shoppers to find turkey breast or other cuts. He said higher prices for pork reduce cheap alternatives for chefs.

Anderson said bird flu has pushed egg prices to a record high. In the second week of November, twelve first-class eggs sold for an average of $2.28, more than double the price from the previous year, according to the USDA.

Even without the flu, egg prices would have risen, Anderson said, due to the high cost of corn and soybean meal used in chicken feed. Ukraine is traditionally a major exporter of corn, and the loss of this supply has sent global prices soaring.

Add that to higher prices for canned pumpkin—a 30-ounce can is up 17% over last year, according to market researcher Datasembly—and it’s clear that Thanksgiving candy is going to be more expensive, too. Libby’s company owned by Nestlé – which produces 85% of the world’s canned pumpkin – He said the pumpkin harvest was in line with previous years, but had to compensate for higher labor, transportation, fuel and energy costs.

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Planning to fill in the sides? It will cost you too. A 16-ounce can of stuffing costs 14% more than last year, Datasemb said. The average price for a 5-pound bag of russet potatoes was $3.26 in the second week of November, or 45.5% higher than it was a year ago.

Frost and a wet spring have severely hampered potato growth this year, said Craig Carlson, CEO of Chicago-based Carlson Produce Consulting. Farmers have also raised prices to offset the higher cost of seeds, fertilizer, diesel fuel and machinery. Carlson said production costs have gone up as much as 35% for some farmers this year, an increase they can’t always make up.

Higher labor and food costs also make ordering a ready meal more expensive. Whole Foods is advertising their classic Thanksgiving feast for eight for $179.99. That’s $40 more than the price advertised last year.

The good news? Not every item on holiday shopping lists is significantly more expensive. Cranberries were a good crop and prices were up less than 5% between the end of September and the beginning of November, said Paul Mitchell, an agricultural economist and professor at the University of Wisconsin. Green beans cost only two cents more per pound in the second week of November, according to the USDA.

And many grocers are lowering prices on turkey and other holiday staples in hopes that shoppers will spend more freely on other items. Walmart is promising turkeys for less than $1 per pound and says ham, potatoes and stuffing will cost about the same as last year. Kroger and Lidl have also lowered prices, so shoppers can spend $5 or less per person on a meal for $10. Aldi is bringing prices back to 2019 levels.

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But Hays Culbreth isn’t sanguine about his casserole. He’s not much of a cook, so he plans to pick up pumpkin pies from the grocery on the way to his family’s feast.