Your Thanksgiving meal will likely cost you more this year, and by now you’ve likely heard why: one of the Midwest’s worst droughts in decades has cut U.S. crops by more than 10%, below demand for the first time in 38 years. The price of wheat, corn and soy will be affecting the cost of retail food, with the most noticeable price hikes hitting just in time for the holiday.
The average price of a classic Thanksgiving meal for 10 people last year cost $49.20, up 13% from the year before. But this year, everything from candy corn, butter and cream, to apple pie will be affected. Overall consumers should expect to spend around 15% to 20% more on their turkey and trimmings, or about $10 more than they spent last year.
Since the drought hit over the summer, food prices have remained steady, mostly unchanged since January. However, poultry is expected to be among the first to reflect commodity fluctuations. According to the Consumer Price Index, the price of chicken is expected to be up 5.3% and turkey to be up 6.9% — a dollar or more per bird. And that’s not all.
The drought's impact on dairy farms means the U.S. is facing the smallest dairy herd in over a decade, and the USDA is forecasting a 3.5% to 4.5% rise in the cost of milk, which will trigger a cascade of higher prices. Holiday table favorites like cheese, cream and eggs will increase in the coming weeks by as much as 10%.
Dessert is in jeopardy, too. The price of corn and vegetable oils will climb about 3%, which ultimately affects candy makers. In addition, apples, a fall favorite, are up a 30% — a dime more per pound this year — due to damaged crops. Instead, go with PUMPKIN pie. As it turns out, pumpkins are more drought resistant so prices should remain steady.
Now, you may have noticed that until recently we’ve actually seen a price reduction on beef, veal and pork — prices fell by almost half a percentage point in August, the first time in about a year and a half. This is due to cattle and hog ranchers selling off or culling their herds due to the higher cost of feeding their animals. While you may have enjoyed this price reduction, it won’t last: we’ll soon see price hikes of 4% to 5%.
Higher-priced processed and packaged foods will take a little longer to hit the marketplace, as we won’t see those increases until the early part of 2013. That’s when the U.S. Department of Agriculture says a wide variety of foods, from cereals to soups, will see a jump.
To help with the added cost of feeding your family this season, stock up on frozen fruits and vegetables and larger quantities of meat and poultry when you find it on sale. For turkeys, buy frozen; this can save about a $1 per pound over fresh. Also, look for promotions from big chain stores. For example, Kroger is kicking off the holiday sales with a deal on frozen turkey for .59/lb with an additional $25 purchase. Since deals like this will be as good as they get all year, why not pick up your Christmas bird at the same time?