The entr?e for your Thanksgiving dinner will likely cost more at the grocery store this year. A Purdue economist expects turkey wholesale prices to be between $1.12 and $1.16 per pound, which is slightly higher than one year ago. November 11, 2014
WEST LAFAYETTE, Ind. — Thanksgiving holiday food shoppers will find adequate supplies of turkeys but at higher prices, depending on the type and whether grocers pass the increases on to customers or eat the loss themselves, a Purdue University agricultural economist says.
Wholesale prices of turkeys are expected to be 8-10 percent higher than last year, said Corrinne Alexander, who tracks trends in food prices. The U.S. Department of Agriculture predicts wholesale prices for Eastern market whole turkey will be between $1.12 and $1.16 per pound in the fourth quarter of this year, compared with $1.05 per pound this time last year.
The higher prices for turkeys primarily are being driven by higher feed costs following the drought of 2012, Alexander said.
She said how the higher wholesale prices translate into retail prices depends on individual retailers' pricing decisions.
“The actual price you pay will vary depending on whether you purchase whole or turkey parts; frozen or fresh birds; fresh, precooked or complete turkey meals; brand names; and the value of store coupons and price specials,” she said.
More stores are offering free-range and organic turkeys at premium prices, she said. Also, fresh birds will be priced higher than frozen, with the price of fresh turkeys more sensitive to increases in wholesale prices.
Many stores, Alexander said, will feature turkeys at below cost or offer special prices for frequent shoppers or large birds. “Turkey is often priced as a loss leader.”
Alexander said retail turkey prices typically fall from August to December as a result of increased supplies and feature pricing.
To complete the traditional Thanksgiving meal, Alexander said:
– Cranberry producers are expecting a very good crop, with prices expected to remain at the same levels as last year.
– There will be adequate supplies of sweet potatoes this year. But with strong demand, prices are expected to be about the same or slightly higher than last year.
– Prices of white potatoes are expected to be about the same this year.
And what about the cost of preparing Thanksgiving dinner? Alexander said energy prices are higher than last year, so it will cost more to prepare and cook the dinner. She said natural-gas prices are about 6 percent higher than last fall, while electricity prices are up about 3 percent.
But people driving to someone else's house for dinner or taking a trip by car that holiday weekend will pay less for gasoline because prices are so low at this time. Alexander said they are down about 4 percent compared with last year.
Although Alexander noted that Americans eat well, spending about 10 percent of their average income for food – much lower than in many other countries – budgets for many people are tight because of unemployment, minimal wage increases and inflation's continued erosion of fixed incomes.
“For these families, any food price rise is significant,” Alexander said. “We should remember those who are less fortunate and share our food bounty.”
Source: Purdue University