Don't be surprised if your Thanksgiving-dinner grocery bill feels fatter this year. Chances are it wasn't because you bought a bigger turkey. It's because food prices, in general, are going up.
In a Nov. 13 survey conducted by the Washington, D.C.-based American Farm Bureau Federation (a non-governmental, voluntary organization governed by and representing farm and ranch families), the average cost of a basic Thanksgiving dinner for 10 this year--not including travel, extra food or alcohol--will increase by $2.35 to $44.61, from $42.26 in 2007.
That's a 5.6% jump, which may not sound like a lot. But consider this: From 2005 to 2006, the increase was just 3.6%; from 2006 to 2007 it was only 3.5%. For the 6.5% of Americans currently unemployed, those extra pennies count.
Why are costs rising? Often simply because they can, unfortunately. In down economic times we need food more than we need new clothes, electronics or even cars. Unless inflation skyrockets, there's little that will stop someone from buying a loaf of bread. When basics become essentials, prices go up. In the most recent Consumer Price Index, released by Bureau of Labor Statistics on Oct. 16, overall prices in the U.S. are 4.9% higher than in September 2007.
Behind the Numbers
To determine average prices for 12 Thanksgiving dinner items, the AFBF surveyed a total of 179 volunteer shoppers from 38 states. For 23 years, the bureau's survey menu has remained unchanged to allow for consistent price comparisons.
Thanksgiving's king, the turkey, has seen the biggest price jump--from $17.63 for a 16-pound bird in 2007 to $19.09 in 2008. That hike can be partially attributed to the high cost of feed. On Nov. 11, the USDA forecast that corn delivery in December would decrease by 12.02 billion bushels, a projection of 60 million bushels less than expected by analysts. For meat companies, a lighter harvest means a higher cost per barrel of corn, which results in higher feed costs. That expense is passed on to the consumer.
Fresh cranberries are pricier this year too, rising from $2.20 for 16 ounces in 2007 to $2.46. Even sweet potatoes will cost more, but only four cents for every three pounds.
Out of the 12 items tracked, two saw a year-over-year decrease in price. The cost of a gallon of milk went down 10 cents to $3.78, while the "miscellaneous ingredients" category--which includes bulk items like coffee, onions, eggs, sugar, flour, evaporated milk and butter--decreased by 60 cents to $2.69. Both store-bought milk and ingredients made from milk have benefited from an overall decline in dairy prices, due to the weakness in global demand.
Costs overall, however, are rising despite fuel prices being in freefall; lower fuel prices would, presumably, affect the cost of food. But Jim Sartwelle, an economist at the AFBF, says that it will take a while for consumers to see a decrease in prices on store shelves as a result of dropping fuel prices. "Microeconomic theory says that in a market economy, prices go up quicker than they go back down," he says.
The Silver Lining |
There is some good news, however. When adjusting for inflation, the 12-item meal is actually 8% cheaper than it was in 1988. And when it comes to 2009's Thanksgiving dinner, Sartwelle says it's unlikely that the year-over-year increase will be as steep as it was this year--so long as fuel prices continue to remain low.
Regardless, for those looking to save a few--or many--bucks this holiday season, Sarah Krieger, RD, a national spokeswoman for the Chicago-headquartered American Dietetic Association, says that the easiest way is also the healthiest way.
"Don't buy pre-packaged goods if you don't have to," says Krieger. "Making your own stuffing, pumpkin pie and gravy saves money. Also, homemade foods generally have less sodium and fat than processed ones."
So, cutting back on pricier quick-fixes this holiday may indeed whittle away at your waistline. But more important, it may help to keep your wallet nice and fat.