A traditional Thanksgiving feast reflects two current trends in food-at-home economics: increased retail food costs vary by category and the supply chain is back to pre-COVID patterns. Dr. Michael Swanson, chief ag economist at Wells Fargo, details more in the bank’s annual Thanksgiving Food Report, which he says had some categories not clear on pricing until the weeks just before Thanksgiving.
“It was a surprising report and has really changed in dynamics in the last couple of weeks as we watch these markets,” Swanson says. “Food inflation is still going up at the retail level, but it’s now a much slower rate of growth.”
From the Thanksgiving report he details:
Turkey
Year over year, whole fresh turkeys are down 16% at the retail level. This is despite wholesale turkey prices down nearly 30%. Swanson doesn’t think the consumer will be able to get any more of the price spread.
“We saw about one and a half million more birds put in the barn in June and July of this year than the previous year,” he says. “I joke, If turkey doesn't celebrate the Fourth of July, it's not going to celebrate Thanksgiving. And so, we saw the excess supply and bigger birds really pressure wholesale prices in a big way.”
Swanson notes 84% of fresh turkeys sold are sold in November.
Vegetable, Fruit and Potato Side Dishes
Canned foods are experiencing increased input costs for packaging.
“Canned product is much more expensive than a year ago on a percentage basis but as part of your spend in your budget, it’s probably not going to break the bank,” Swanson says. “It's always the protein that really catches people's eyes–that's where the dollars are spent.”
Cranberries provide an example to contrast the current cost difference in canned v. fresh. While fresh cranberries are down 20% in price, canned cranberries are up 60%, and canned cranberry sauce is up 7%.
Canned green beans are up 9% year over year. Canned pumpkin is up 30% this year compared to last.
“The fresh products are not experiencing such a high rate of increase. First, we’ve had good harvests this year. And refrigerated shipping is down—a year ago suppliers were paying $3.80 per mile, and this year it’s $3.30 per mile,” Swanson says.
Swanson notes consumers who live near the production of key crops may see lower prices, which for cranberries and green beans the no. 1 producing state is Wisconsin, while Illinois is the top pumpkin producing state.
The dry weather of 2022 in the Pacific Northwest is lingering on this year’s potato crop as the more expensive seed potatoes set the stage for 2023. Swanson notes russet potatoes are at an all-time year: $1.17 in September 2023 compared to $1.08 the same time last year.
As for sweet potatoes, almost two-thirds of our national harvest comes from five counties in North Carolina. Thanks to good yields and storage, prices in this category are only up 4% compared to 2022.
Supply Chain Status
“The supply chain has completely healed. Retailers are now seeing they can get the products they want and talk to wholesalers about price,” Swanson says. “Retailers are running more features and looking for trade money within the channel.”
As such Swanson suggests deals are to be found by shopping the specials, and if possible, visiting more than one store to take advantage of the different sales and offers.
“In 2024, we’ll probably see some of the food categories going down compared to the year prior,” Swanson says, specifically highlighting pork and poultry as sectors to watch.