Inflation and the rising cost of a Thanksgiving meal- QHN

By Danielle Wiener-Bronner, CNN Business

Published November 21, 2022

Problems like inflation, supply snarls and bad weather have pushed up prices for just about everything — including Thanksgiving.

Overall, the ingredients for a traditional Thanksgiving meal will cost shoppers 13.5% more this year compared to last, the market research firm IRI predicted earlier this month, using data from October.

Several of those items are even pricier on an individual basis, particularly the star of the show: Turkey prices were up 24.4% year-over-year in the week ending November 6.

Meanwhile, fresh potatoes cost 19.9% more, cranberry sauce 18.1% more, and salads and leafy greens 8.7% more in that period. Eggs and butter (including margarine or spreads) — ingredients key for desserts and sides — jumped a huge 74.7% and 38.5%, respectively.

“We’ve had some acute issues in 2022 — but those are built upon a foundation of problems that we’ve been dealing with for the past couple of years,” said Rob Fox, director of the knowledge exchange division at CoBank.

Here’s why each item on your Thanksgiving plate is more expensive this year.

Turkey

The highly pathogenic avian influenza — a deadly, contagious disease that has been destroying poultry flocks this year — has hit turkey supplies especially hard.

“It’s been a very challenging year for turkey producers across the country,” said Beth Breeding, spokesperson for the National Turkey Federation.

“To date, we have lost about 8 million turkeys,” she said, “just over 3% of expected annual turkey production.”

The disruption won’t mean a shortage of turkeys because producers start planning for Thanksgiving a year before the holiday, giving them time to plan — even for a crisis like the avian flu, she noted.

Breeding is hopeful things will stabilize, and said the industry is working with the Department of Agriculture to better understand the flu and how to prevent it. But for now, it’s not clear when the virus will run its course.

In 2015, the avian flu outbreak was under control by June, Breeding explained. But “this year, we haven’t seen that same pattern,” she said. “We did have a lull in cases, June, July and some of the hotter summer months, but we saw cases picked back up again in August going into the fall.”

Potatoes

Bad weather has choked potato supplies, noted Courtney Buerger Schmidt, a sector manager within Wells Fargo’s food and agribusiness industry advisory group.

“It’s really just been a tough weather year across the US for crops,” said Schmidt. “That’s what’s happened to your potatoes.”

For spuds, “rains came at the wrong time, or you didn’t get enough rain,” she said. “So you’re seeing another short crop this year.”

A Wells Fargo report co-authored by Schmidt explained that in the country’s Northwest region, a cool spring — which delayed the potato crop — was followed by extreme heat. “This kind of environment stunts potato plant growth,” the report said. “Potatoes in the ground lose size and yield.”

It’s possible to store fresh potatoes throughout the year. But last year’s crop was also small because of hot and dry weather in Idaho, explained Almuhanad Melhim, a fruit and vegetable analyst at Rabobank. “We started this year with really low inventory,” he said. The supply squeeze has resulted in the higher prices.

Cranberry sauce

Cranberry crops are also smaller this year, but the headwinds are less obvious.

The harvest in Wisconsin was “lower than expected,” said Tom Lochner, executive director of the Wisconsin State Cranberry Growers Association, which produces a big slice of the country’s cranberry crop.

The reason for the supply squeeze? “We’re scratching our heads,” said Lochner, and working with experts to nail down the cause. For now, his best bet is those switches from cold to hot to cool weather.

“That affected the size of the fruit,” he said. “That’s probably why we came up a little bit below what we expected.”

But this year is still better than last, when bad weather meant cranberry crops were even smaller. “We still rebounded from last year,” he said, adding that there should be no shortage of cranberries this year.

IRI’s data show that fresh cranberries are actually cheaper this year than last, dropping 9.9%.

But that’s not the case in prepared cranberry sauces, where prices are up.

Lochner pointed out that processors set those prices, and that they are seeing higher input costs unrelated to berries — like “processing the fruit and getting it to market.”

Salad

Romaine and green leaf lettuce have been hurt by crop disease.

In California, where much of the country’s lettuce is grown, there was a “high incidence of virus infection that has affected the crop pretty significantly in some fields,” Melhim said. “That led to really low supply and low quality of lettuce.”

The problem is especially acute right now because of the normal seasonal transition from crops in California to Arizona, he explained.

“You’re at the cusp of starting a new season [in Arizona] after the one in California is winding down,” he said. Even under normal circumstances, that in-between time limits supply.

Disease spreading in California, plus that transition, “was the perfect recipe for really historically high prices,” he said.

Pie

Any way you slice it, pie is going to be pricier this year as a variety of problems hit key ingredients.

Butter has gotten more expensive due to a contraction in the milk supply.

There has been “less milk [from] a global standpoint” than expected, said Cobank’s Fox. “You got less milk, you’ve got less global butter supply.”

With milk supplies lower, there’s less to go around for dairy producers, raising competition between butter makers, cheese makers and fluid milk processors. Consumer interest in milk and cheese has outpaced demand for butter, driving prices higher, according to a report from CoBank.

Some pie recipes call for eggs or an egg wash. Consumers won’t see any relief there either: Along with the turkeys, egg-laying hens have also been impacted by the avian flu, driving egg prices through the roof.

Chickens that lay eggs “got hit very hard,” said Schmidt. “I think at the peak of it, we were down 9% of our egg-laying flock.” Other shelf-stable essentials, like flour, are pricier as well. Even frozen pies and pastry shells have gotten 23.6% more expensive, and whipped dairy topping prices rose 23%.

One silver lining: Sweet potatoes and yams are up just 2.6% in the grocery store.

“Sweet potatoes are probably one of your better values right now,” said Schmidt of Wells Fargo. “You’ve certainly seen that crop perform a little bit better … so sweet potatoes might be what you want to use this year.”