Americans feeling the pinch from inflation have a reason to be thankful this year: the cost of Thanksgiving dinner has dropped by 4.5% compared to 2021, as reported by the American Farm Bureau Federation (AFBF).
This year, a traditional Thanksgiving feast for ten averages $61.17, a decrease from last year’s $64.05.
Costs are 25% higher than pre-pandemic levels
Nevertheless, it’s important to note that this year’s price is still significantly higher than pre-pandemic levels. In 2019, before COVID-19, the same meal cost $48.91, marking a 25% increase in just three years, according to AFBF data.
This assessment comes from a comprehensive AFBF survey conducted in all 50 states and Puerto Rico from November 1 to November 6. The survey gathered prices of typical Thanksgiving ingredients, including turkey, cranberries, and whipping cream.
Price of Turkey down slightly from 2021 levels
A major component of the feast, the 16-pound frozen turkey, averages $27.35 this year, making up 45% of the meal’s total cost. This reflects a slight decrease from 2021’s average turkey price of $28.96.
This decrease in Thanksgiving dinner costs is seen in the context of a broader cooling in U.S. inflation following continuous interest rate hikes by the Federal Reserve.
Fed has raised rates 11 times since early 2022
Since March 2022, the Fed has raised rates 11 times to address the soaring prices, which saw a 3.2% increase in October year-over-year. This is a significant drop from the 9.1% peak in June 2022, but still exceeds the Fed’s 2% inflation target.
Looking ahead, Jim Reid, a research strategist at Deutsche Bank, offers a positive outlook. In a note he shared, Reid points out that over the long term, agricultural prices have generally declined in real terms, considering inflation.
He cites examples like the 1.2% annual decrease in wheat prices over the past 150 years and a 1.6% annual drop in an index of food prices since 1947, despite occasional price surges.
Holiday feats should become more affordable over the next few years
Reid attributes this long-term decline in food prices to enhanced productivity in agriculture. He reassures that if historical trends hold, the cost of Thanksgiving dinners is likely to lag behind general inflation over time, despite potential short-term increases.
In summary, while this year’s Thanksgiving dinner costs are still elevated compared to pre-pandemic levels, the recent decrease, and long-term trends suggest more affordable holiday feasts in the future.
