Already a Bloomberg.com user?
Sign in with the same account.
Nov. 10 (Bloomberg) -- The cost of a Thanksgiving dinner in the U.S. will jump 13 percent this year, the biggest gain in two decades, as prices rose for everything from turkey to green peas to milk, the American Farm Bureau Federation said.
A meal for 10 people on the holiday, which falls on Nov. 24 this year, will rise to $49.20 from $43.47 last year, the biggest increase since 1990, based on foods traditionally served including stuffing and pumpkin pie, the farm group said today in a release. Turkey was the most expensive and had the biggest gain, with a 16-pound bird up 22 percent at $21.57.
“Our informal survey is a good barometer of the rising trend in food prices this year,” John Anderson, a senior economist at the Farm Bureau in Washington, said in a telephone interview. “We are starting to see the supply response to higher prices, but there are substantial lags.”
Thanksgiving meal costs are up more than the pace of food inflation in the U.S., where the government forecasts prices will increase 3.5 percent to 4.5 percent this year, the fastest since 2008. Rising commodity and energy prices boosted the cost of food eaten at home by 6.3 percent in September compared with a year earlier, according to data from the Census Bureau.
“The era of grocers holding the line on retail-food cost increases is basically over,” Anderson said. “The worst of the price inflation may be ending, and we should see a moderation in 2012.”
At a time when global food prices tracked by the United Nations fell 9.1 percent from a record in February, U.S. consumers are paying record prices, including hams, ground beef, bread, flour and cheese. World food costs are 68 percent higher than five years ago after adverse weather the past three years hampered global production gains.
Rising gasoline prices, up 28 percent in the past year, are an additional drag on consumer spending, according to Corinne Alexander, an agricultural economist at Purdue University in West Lafayette, Indiana. The biggest reduction in disposable income from rising food prices occurs in the middle class, where consumers buy cheaper generic food brands and lower-quality meat, while eating out less, she said.
“We are still in a period of accelerating food inflation that may begin to moderate in 2012,” Alexander said. “Consumers are getting a double whammy. It costs more to get to work, and they have less disposable income to spend on other things after they go to the grocery store.”
Other Thanksgiving cost increase in the annual Farm Bureau survey include a 17 percent gain for a pound of frozen green peas, 16 percent for a 30-ounce can of pumpkin-pie mix, a 15 percent for a half-pint of whipping cream, 13 percent for a gallon of whole milk, 9 percent for a 14-ounce bag of stuffing mix, 8.5 percent for 12 rolls, 2.9 percent for fresh cranberries and 2.2 percent for a three pounds of sweet potatoes.
The informal price survey was first conducted in 1986. A total of 141 volunteer shoppers from 35 states participated in this year’s project. The menu for the dinner has remained unchanged since 1986 to allow for consistent price comparisons.
“A dinner for 10 at under $5 a head is still a bargain,” the Farm Bureau’s Anderson said. “The average American household still spends less on food than any other nation in the world.”
--Editors: Steve Stroth, Millie Munshi
To contact the reporter on this story: Jeff Wilson in Chicago at firstname.lastname@example.org
To contact the editor responsible for this story: Steve Stroth at email@example.com.