Thursday, November 10, 2011

Cost of Thanksgiving Dinner Increases 13%, But Remains a Bargain at Less than $5 Per Person

WASHINGTON, D.C., November 10, 2011 – "The retail cost of menu items for a classic Thanksgiving dinner including turkey, stuffing, cranberries, pumpkin pie and all the basic trimmings increased about 13 percent this year, according to the American Farm Bureau Federation (AFBF). AFBF’s 26th annual informal price survey of classic items found on the Thanksgiving Day dinner table indicates the average cost of this year’s feast for 10 is $49.20, a $5.73 price increase from last year’s average of $43.47.

“The cost of this year’s meal remains a bargain, at just under $5 per person,” said AFBF President Bob Stallman, a rice and cattle producer from Texas. “The quality and variety of food produced for our dinner tables on America’s diverse farms and ranches sets us apart from our contemporaries around the world.  It is an honor for our farm and ranch families to produce the food from our nation’s land for family Thanksgiving celebrations.”

The AFBF survey shopping list includes turkey, bread stuffing, sweet potatoes, rolls with butter, peas, cranberries, a relish tray of carrots and celery, pumpkin pie with whipped cream, and beverages of coffee and milk, all in quantities sufficient to serve a family of 10. There is also plenty for leftovers.

The big ticket item – a 16-pound turkey – came in at $21.57 this year. That was roughly $1.35 per pound, an increase of about 25 cents per pound, or a total of $3.91 per whole turkey, compared to 2010.  The whole bird was the biggest contributor to the final total, showing the largest price increase compared to last year. “Turkey prices are higher this year primarily due to strong consumer demand both here in the U.S. and globally,” said John Anderson, an AFBF senior economist."

MP: The 13% increase in the cost of Thanksgiving dinner this year is the largest annual nominal increase since a 16.8% increase in 1990, and the 10% increase in the inflation-adjusted cost is the largest real increase since a 10.8% increase in 1990.  However, about half of this year's 13% increase is because turkey prices increased by 22% over last year; without turkey, the increase in the cost of the other ingredients was only about 7%. 

In 2011 dollars, the $49.20 cost this year for a dinner for ten was the highest since 1990, when the inflation-adjusted cost was $49.53.  Compared to the highest inflation-adjusted cost in the AFBF's data series of $58.78 in 1986, this year's Thanksgiving dinner for ten is 16.3% lower than 25 years ago.

Update: The bottom chart above shows the "time cost" of a Thanksgiving dinner measured in the number of hours of work at the average hourly wage that would generate enough income to purchase the turkey dinner for ten at the retail price.  This year it will require about 2.5 hours of work at $19.53 per hour to purchase the dinner for $49.20, and that "time cost" has been relatively stable for the last twenty years, and 22% below the "time cost" of  3.22 hours in 1986.  

Bottom Line: The fact that the average American family can celebrate Thanksgiving with a turkey dinner feast for ten people at a "time cost" of only 2.5 hours of work for one person means that we really have a lot to be thankful for on Thanksgiving: an abundance of cheap, affordable food.  Exhibit A: In 1929, the average American family spent 22.7% of their disposable income on food, and today's families spend half that amount: only 11.4% (data here).

Bon appetit!

HT: Bob Wright


At 11/10/2011 11:49 PM, Blogger sethstorm said...

While the quality goes down.

At 11/11/2011 3:21 AM, Blogger J H Schumacher said...

wages are down over the last decade so the cost is even higher. Not to mention that turkey is essentially a dried bird and the industry spent a lot of time convincing us the Pilgrims ate it when the evidence is
tenuous (the contemporary account mentions fowl and fish).

At 11/11/2011 9:35 AM, Blogger Eric H said...

Shouldn't there be an investigation into this "turkey gouging"? A 22.7% increase in price when our Dear Leader and the Bernanke constantly remind us inflation is "only 2.1%" surely deserves some attention.

At 11/11/2011 12:06 PM, Blogger Buddy R Pacifico said...

2.5 hours of work for a feast, compared to probably hundreds of hours of work for the Pilgrims and Native Indians for the same.

At 11/11/2011 2:20 PM, Blogger indur goklany said...

I wonder what portion of the increase in turkey prices is due to our biofuel obsession?

At 11/11/2011 2:21 PM, Blogger indur goklany said...

... talking of turkeys, that is.

At 11/11/2011 3:46 PM, Blogger Eric H said...

You mean the "amber waves of fuel"?


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