For the average American heading to the supermarket to buy Thanksgiving dinner, bringing a $50 bill should do the trick.
The average cost of a 10-serving Thanksgiving dinner will cost $49.48 this year, according to a study by the American Farm Bureau Federation, a nonprofit grassroots organization advocating farmer interests. The group used 150 volunteer-shoppers across the country who bought traditional dinner item including turkey, rolls and pumpkin pie.
With the United States having experienced its worst drought in decades this summer, there has been much concern about rising food prices. Yet the price of a Thanksgiving dinner in 2012 increased just slightly from its cost of $49.20 in 2011. In fact, of the 12 items calculated by the AFBF for the dinner, eight got cheaper compared to last year, while only three became more expensive.
"All the talk that there has been about the drought … sort of fed this expectation that we'd see a big jump in the Thanksgiving dinner price survey," AFBF Deputy Chief Economist John Anderson said in an interview, but added, "I'm not terribly surprised by this result."
Anderson noted that the effects of the drought haven't been incredibly evident in retail prices yet, since decisions about retail strategy and pricing for Thanksgiving are often made "months, or at least weeks" in advance. The drought effects will hit consumers' wallets hardest within the next three to six months, Anderson explained. But prices in the coming months will be determined based on many other factors, including energy prices, the overall strength of the economy and the continuing behavior of Mother Nature.
Although the cost of a Thanksgiving dinner barely changed from 2011, it is significantly higher from $42.91 back in 2009 and $43.47 in 2010. Anderson explained that prices as a whole were still rising during the years of the global recession due to higher demand worldwide, but retailers were reluctant to pass along those costs to consumers. "Consumers were just incredibly cost conscious during the recession," Anderson said. By 2011, however, the economy was on strong enough footing that retailers began charging higher prices.
24/7 Wall St. reviewed the items on the AFBF's report on the cost of Thanksgiving dinner to gain perspective on price shifts of food, including 16-lb. turkey, 12 rolls, 1-lb. relish tray of carrots and celery, ½ pt. of whipping cream, 14 oz. of cubed stuffing, 3 lbs. of sweet potatoes, 1 gallon of whole milk, 12 oz. of fresh cranberries, 1 lb. of green peas, 30 oz. of pumpkin pie mix and two pie shells. We considered data from the U.S. Department of Agriculture to identify changes in production for various commodities to determine why food prices may have changed. We eliminated the 1-lb. relish tray of carrots and celery from this list because the price stayed the same at 76 cents. We also eliminated miscellaneous ingredients from the list because the measured amount of some of the items was too small.
These are the Thanksgiving items rising or falling in price.
Filed under: 24/7 Wall St. Wire, Agriculture, Food