It is time to admit defeat. Price inflation will not return to pre-crisis levels. This year’s Thanksgiving proves that Treasury Secretary Janet Yellen was right in her February interview on 60 Minutes: Americans should not expect prices to be where they were before the pandemic. All hope is lost. Still, it does not mean families engaged in political debate around the dinner table cannot take solace in the little things, such as a new industry report confirming that the cost of the classic feast is slightly down from a year ago.
Cents and Sensibility at Thanksgiving
According to the American Farm Bureau Federation's 39th annual Thanksgiving dinner survey, the classic feast for ten costs $58.08 this year, down 5% from 2023. In their annual study, economists featured turkey, cubed stuffing, sweet potatoes, dinner rolls, frozen peas, fresh cranberries, celery, carrots, pumpkin pie mix and crusts, whipping cream, and whole milk.
Unfortunately, it is still 24% higher than four years ago when households were confined to gorging on gravy-soaked dinners over Zoom. Or, if you wish to remove from the equation the pandemic-era impact on food inflation, it is 19% more expensive than in 2019. The other good news is that because nominal wages rose 4% from 2023 to 2024, individuals required 9% less time working to cover the costs of this year's Thanksgiving dinner.
Of course, the centerpiece of any Thanksgiving dinner is the turkey – and a 16-pounder accounts for 44.2% of the total dinner bill. It has been a turbulent climate for farmers as the highly pathogenic Avian Influenza decimated supply by 6%, leaving just 205 million turkeys, the lowest since 1985. While this typically raises prices, consumer demand has slumped in recent months, causing prices to slip.
This year's most significant contributors to Thanksgiving inflation were processed products, like cubed stuffing, dinner rolls, and fresh cranberries. Conversely, prices tumbled for fresh vegetables and a gallon of whole milk.
Here is a breakdown comparison:
16-Pound Turkey: $25.67 in 2024 | $19.39 in 2020
Dinner Rolls: $4.16 in 2024 | $2.66 in 2020
Pumpkin Pie Mix: $4.15 in 2024 | $3.39 in 2020
Whole Milk: $3.21 in 2024 | $3.08 in 2020
Whipping Cream: $1.81 in 2024 | $1.74 in 2020
Cube Stuffing: $4.08 in 2024 | $2.81 in 2020
Sweet Potatoes: $2.93 in 2024 | $3.44 in 2020
Green Peas: $1.73 in 2024 | $1.46 in 2020
Carrots and Celery: $0.84 in 2024 | $0.73 in 2020
While households welcome any relief from food inflation, the group's economists agreed that consumers remain "exhausted from years of inflation, and it will take more than the past two years’ improvements to ease the pain." Still, they noted, the declines reflected improved food affordability in the United States. "Rising grocery bills might be a bit of a shock, but food inflation is a fraction of the hikes hitting other expenses," the report concluded.
Food Inflation – Then and Now
In the United States, food inflation was once something households didn't have to worry about. From 2015 to 2020, prices were relatively flat. However, since January 2021, food inflation has rocketed 23%, with many items surging at far higher rates. Visiting the supermarket these days is as frightening as Bela Lugosi seeing a black cat with the second movement of Beethoven’s 7th Symphony playing in the background of the classic horror film Black Cat. Like the tired trope of jump scares, consumers will eventually acclimate to the widespread price reset. For now, it is frustrating and painful.
The growth rate in food inflation, no matter how poorly government statisticians measure it, has slowed. Looking ahead to 2025, the US Department of Agriculture projects prices for all food will rise 2.4%. Regardless of how shoppers assess the data, this forecast hurts.
But Thanksgiving is all about expressing gratitude and being thankful. It could be worse. As the American Farm Bureau Federation noted, US consumers spent nearly 7% of their expenditures on food in 2022 (supermarkets and restaurants). By comparison, it was 8.5% in the United Kingdom, 16.2% in Brazil, and 59% in Nigeria. Things could be worse, indeed!
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