Thanksgiving Dinner Taking a Smaller Bite Out of Budgets

AT A GLANCE

• The estimated cost of a Thanksgiving meal is down 4.5% from 2022’s record high
• The absence of widespread bird flu this year has helped bring down the cost of turkey from a year ago

Thanksgiving is cherished around the United States as a time to get together with family and friends, reflect on what we’re thankful for, and of course, eat turkey. But as we all know, nothing is free, and prices for what seems like just about everything have risen dramatically. So how much will Thanksgiving dinner cost us this year?

In 2022, according to an annual survey from the American Farm Bureau Federation, the average cost for a Thanksgiving dinner for 10 people was $64.05. Consumers experienced about a 20% increase for Thanksgiving dinner in 2022 compared to 2021, driven by runaway inflation, widespread avian flu, and supply chain issues stemming from the COVID-19 pandemic.

While 2023 has presented its own challenges, both economically and geopolitically, consumers can expect a more modest increase in Thanksgiving dinner prices for this year’s Turkey Day celebrations. This year’s estimates from the Farm Bureau put the cost of a Thanksgiving dinner for 10 at $61.17, down 4.5% compared to 2022. But that’s still 25% higher than pre-pandemic.

On a macroeconomic scale, inflation has slowed, though it persists. Labor and food production costs have increased over the last year, with food production costs estimated to increase by 4.1%, according to the U.S Department of Agriculture. Food producers have not been eating that cost, however, according to the most recent release of the Consumer Price Index. Instead, food prices in September 2023 were up 3.7% year-over-year. Yet while prices are still rising, the rate of increase is slowing, as that same one-year period from 2021 to 2022 experienced an 11.2% rise in food prices.

Another differentiating circumstance between Thanksgiving 2022 and 2023 is the cost of turkey, which is, on average, $1.71 per pound, or 5.6% less than it was last year. Due to the severe avian flu in 2022 that killed more than 49 million birds, there was a turkey shortage that drove the price up significantly. But the absence of widespread bird flu and improving supply chain conditions this year have helped suppress the price of the centerpiece of the Thanksgiving meal. The same cannot be said, however, for the majority of side dishes.

The price for Thanksgiving side dishes is expected to increase in line with the aforementioned 3.7% increase in food prices over the last year. According to the Bureau of Labor Statistics, grocery prices are up almost 17% over the past two years. Wells Fargo Agricultural Economist Michael Swanson noted that a handful of processed Thanksgiving foods are contributing to the overall increase in price. Canned cranberries are up 60% from last year. Canned green beans also are higher, as is canned pumpkin.

Inflation has dominated the economic headlines for the better part of two years, and Thanksgiving dinner shoppers really felt pressure in 2022 when paying an average of 20% more for their dinners than the previous year. Although the annual meal still represents historically high prices this year, consumers should feel some relief from a price increase more in line with wage growth and inflation over the past year.

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Originally Posted November 20, 2023 – Thanksgiving Dinner Taking a Smaller Bite Out of Budgets