As consumers pay more at the gas pumps, skyrocketing energy costs have also driven up the cost of this year's Thanksgiving feast, according to several new studies released prior to the holiday.
According to the American Farm Bureau Federation's 22nd annual informal survey of the prices of basic items found on the Thanksgiving Day dinner table, the average cost of this year's dinner for 10 is $42.26, a $4.16 price increase from last year's average of $38.10.
The AFBF survey shopping list includes turkey, stuffing, sweet potatoes, rolls with butter, peas, cranberries, a relish tray of carrots and celery, pumpkin pie with whipped cream and beverages of coffee and milk all in quantities sufficient to serve a family of 10.
According to the AFBF survey, the cost of a 16-pound turkey, at $17.63 or roughly $1.10 per pound, reflects an increase of 12 cents per pound, or a total of $1.93 per turkey compared to 2006. This is the largest contributor to the overall increase in the cost of the 2007 Thanksgiving dinner, according to the survey.
Turkey could be found at some supermarkets as low as 97 cent per pound this month.
"The inventory of birds in cold storage is relatively small this year. This has helped drive up the average retail turkey price," said Jim Sartwelle, an AFBF economist. "The tremendous increase in energy costs for transportation and processing over the past year also is a key factor behind higher retail prices at the grocery store."
Randy Klein, director of market development for the Nebraska Corn Board, said research has shown that a $1 per gallon increase in the cost of gasoline has three times the impact on food prices compared to a $1 per bushel increase in the cost of corn.
The AFBF survey found that other items showing a price increase this year included: a gallon of whole milk, $3.88; a 30-ounce can of pumpkin pie mix, $2.13; three pounds of sweet potatoes, $3.08; two 9-inch pie shells, $2.08; a 12-ounce package of brown-n-serve rolls, $1.89; a half-pint of whipping cream, $1.56; and a 12-ounce package of fresh cranberries, $2.20.
"All of the dairy products included in the survey increased significantly in price over the past year due to skyrocketing world demand," Sartwelle said.
Items that decreased slightly in price this year were a 14-ounce package of cube stuffing, $2.40; and a relish tray of carrots and celery, 66 cents. A pound of green peas remained the same in price at $1.46.
Sartwelle said the inflation-adjusted cost of a Thanksgiving dinner has remained around $20 for the past 17 years.
"Consumers can enjoy a wholesome, home-cooked turkey dinner for just over $4 per person less than a typical fast food meal. That's an amazing deal, any way you slice it," Sartwelle said.
The AFBF survey was first conducted in 1986. This year's average cost of $42.26 is equivalent to $20.46 in inflation-adjusted dollars. After adjusting for inflation, what economists call "the real cost" of the Thanksgiving dinner has declined 9 percent in the last 20 years, according to Sartwelle.
According to Corinne Alexander, Purdue University agricultural economist, increasing energy costs and world food demands has pushed up the cost of Thanksgiving dinner this year.
"Food prices in 2007 are up across the board," Alexander said. "What we've seen happen in 2007 is different from previous years."
Alexander said food prices increased at a rate of 4.4 percent this past year, which is well above the 10-year average of 2.6 percent.
"In general, food price inflation is lower than the rest of inflation, but this year that's changed," Alexander said.
As with the AFBF survey, Alexander said dairy prices are up 15 percent from last year. Another food item that is up substantially is eggs. Eggs are up 45 percent.
"Energy prices have been up for the last few years, and that increases the cost of manufacturing and transporting food," Alexander said. "As a result, we're seeing food retailers passing on these higher energy costs to consumers."
Alexander said a worldwide wheat shortage has added to the cost of wheat-based foods.
"The world's wheat supplies are at the tightest level since the 1975-76 crop year, and of course the world's population has grown since the 1970s," Alexander said. "So, as a result, we're seeing prices for wheat products up as much as 10 percent."
Alexander said strong economic growth around the globe has resulted in higher demand for American agricultural products, which also contributes to the higher prices U.S. consumers will see this holiday season.
"Economies around the world are growing, so people worldwide have more money to spend on food," Alexander said.
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