Inflation at Thanksgiving isn’t just for parade balloons anymore.
According to the annual Farm Bureau survey, the cost of a Thanksgiving dinner is up 20% starting in 2021. Like every year for four decades, the agriculture industry group’s report has proven irresistible to local TV stations and NPR reporters looking for holiday content. It’s also catnip for Republicans, who have jumped on the news to attack the Biden administration:
Thursday’s main course will be turkey, and turkey is the top item in the Farm Bureau’s survey, accounting for nearly half of the meal’s total cost. A 16-pound bird, investigators report, costs $28.96 this year, up 21% from last year. That’s $1.81 a pound!
There’s only one problem: Retail prices for frozen whole turkeys were just $1 a pound last week, according to the US Department of Agriculture. National Retail Report of 29,200 supermarkets. So it’s $16 for a 16 pound bird, not $29. That’s a big enough difference to wipe out the entire $10.74 price jump between this year’s Thanksgiving cost and last year’s that is the Farm Bureau’s main finding. The USDA says the price of the pound is 7 cents higher than last year, which is almost perfectly in line with the general trend CPI inflation figure 7.7% – and well below the broader year-over-year rate grocery inflation mark by 12 percent.
What is happening here? Why does the Farm Bureau think turkeys cost twice as much as the USDA? And why don’t journalists shout, uh, chicken?
One culprit could be the Farm Bureau’s methodology — the organization relies on 224 surveys conducted by volunteers shopping in person and online, in all 50 states and Puerto Rico. This is an “informal survey”, by the group’s own admission, and could be subject to regional and local price whims – per pound, prices for whole frozen turkey vary by a factor of six between the most expensive and the cheapest stores.
But a more likely explanation is timing: The Farm Bureau does its surveys in October. This isn’t a very useful data point for whole turkey sales, since most Americans tend to buy a whole turkey only once a year, on or just before Thanksgiving week. In fact, according to the USDA, only a few hundred US supermarkets even Stock frozen whole turkeys in mid-October.
USDA
In most years, the timing of the Farm Bureau’s survey doesn’t matter so much because of modest price differences between October and November, when there is more supply in the market and Thanksgiving specials take effect: Last year, for example, prices for whole frozen turkeys fell from $1.15 a pound during the investigation period to 93 cents the week before Thanksgiving. Also, the Farm Bureau compares each month of October to the previous one, so they are consistent.
But this year the price changes have been more dramatic, according to USDA accounting, from $1.46 in October to $1 last week. Maybe it’s because it’s been a rough year for America national bird also run: Bird flu has devastated turkey flocks this year, killing more than 6 million birds, 3 percent of the US stock. In addition to flu-causing price increases, said David Anderson, livestock economist at Texas A&M, “turkey producers may be thinking, ‘We need to save them for Thanksgiving.'” is fairly typical: it’s no coincidence that the supply of whole turkeys increases for Thanksgiving, and retail prices drop accordingly.
Whatever the reason, actual turkey prices are currently far from what the Farm Bureau says they are – a fact the group coyly admitted in the press release announcing the survey last week. But those “dramatically lower prices” didn’t make it to News at 10.
It’s not like turkeys are inflation-proof: Wholesale prices have risen 20 to 25 percent, says Michigan agricultural economist David Ortega, as producers rely on bird flu and higher prices for feed, fuel and labour. But the price of groceries is what consumers care about, and the price of groceries falls far short of that mark. “Turkeys are the classic loss leader,” he said. “It’s the pricing strategy – retailers can price the turkey below cost to entice customers into the store to purchase other items.”
Nearly 9 out of 10 US supermarkets have a turkey sale, according to the USDA, and there are more sales this year than last. The theory is that customers choose a supermarket where they will get a deal on the most expensive item, and then they will buy everything else there as well. Like stuffing, which the Farm Bureau says is 69% more expensive this year than last.
Or at least it was in October.