Economic pressure increases Thanksgiving turkey prices by 20%

Supply chain problems, labor shortages and inflation have driven up the cost of Thanksgiving and raised the price of an 8- to 16-pound turkey by 20.2% year-on-year, according to government estimates.

An 8 to 16 pound turkey cost $ 1.36 per pound last week compared to $ 1.13 at the same time last year, according to the U.S. Department of Agriculture. The American Farm Bureau Federation estimates that the classic Thanksgiving party will cost $ 53.31 this year, up from $ 46.90 last year.

Christine McDaniel, a former assistant secretary of the Treasury Department, said the price of an entire turkey in the U.S. has been rising for a while, but “that increase is showing even higher this year” due to the country’s economic problems.

“It’s not really a shortage of turkeys, but rather a shortage of manpower to do the work needed to get those turkeys ready to be packed, and the tightness of the trucking industry to get the packed turkeys shipped to the shops,” said Ms. McDaniel told The Washington Times. “This all means higher prices.”

Leading supplier Butterball reported that the shortage of workers made turkeys grow on farms longer than usual, making it harder to find smaller birds this year.

“Most people will probably be able to find a turkey if they want one, but maybe not the size they want,” Ms. said. McDaniel, a senior researcher at George Mason University’s Mercatus Center Free Market Think Tank.

Walmart and Target announced earnings on Tuesday, showing they are well-supplied with domestic chickens despite price increases.

Last week, the Beaumont Enterprise news media reported that several Texas companies “hampered expectations” for the availability of smaller birds and fresh produce “due to processing plant constraints” due to labor shortages and supply disruptions.

John Rosen, a professor at the Pompea School of Business at the University of New Haven in Connecticut, estimated this week that Thanksgiving turkeys will ultimately “cost about 25 cents more per pound compared to last year.”

“But that’s not the scary part. The scary part is that the drive to Grandma’s house will cost about $ 1.25 per gallon more than last year,” Mr. Rosen told The Times.

The US Bureau of Labor Statistics reported last week that consumer prices rose by 6.2% in the 12 months ending October – the largest rise in inflation in more than 30 years – and 0.9% from September to October. Food costs increased by 5.3% from October 2020 to October 2021, the agency reported.

Wall Street trader Charles Mizrahi, a financial expert and author, said the rising cost of Thanksgiving reflects “how everyday Americans are carrying the bulk of their inflation.”

“In addition to the turkey on their table this Thanksgiving, Americans will also see the impact of supply chain problems, COVID and Washington’s terrible tax spending right next to yams and gravy,” said Mr. Mizrahi.

The USDA predicts that the cost of food at home will increase by 2.5% to 3.5% for the year.

Iain Murray, a senior analyst at the Libertarian Competitive Enterprise Institute, said government regulations could feed inflation.

“The main reason that Thanksgiving is getting so expensive this year is that local, state and federal policy makers have allowed multiple sclerosis to build up on the supply side of the economy,” said Mr. Murray.

He said the tariffs were driving up the prices of supplies, energy restrictions were increasing fuel costs and more tariffs were leading to a shortage of truck chassis. California regulators have banned older trucks, and unions have prevented ports from reopening 24/7, he said.

“With extremely high demand, all of these and more rules have been combined to extend shipping times, reduce supply and raise prices,” he said. Murray, who heads the Free Market Think Tank’s Center for Economic Freedom.

Ken Cassar, vice president of commercial vertical for market data collector Premise, said a digital survey running through next week shows groceries filled with six Thanksgiving staples: turkeys, yams, fillings, cranberry sauce, gravy and potatoes. Still, the goods are more expensive than expected.

“With some exceptions, consumers find items well-assorted if they are a little more expensive so far,” said Mr Cassar, who noted that the study involved consumers who reported directly back on what they found in their grocery stores.

The higher prices may increase the pressure on families struggling with food insecurity, broadly defined as the lack of “reliable access to a sufficient amount of affordable, nutritious food.” According to a USDA report from September, 10.5% of US homes were food insecure by 2020.

Ms. McDaniel, the former finance minister, said Americans will also have to accept that inflation may not stop anytime soon.

She said this year’s holiday price increase “means companies are paying more for their input, causing other companies to raise their prices.”

As a result, she said, workers are beginning to demand higher wages.

“We can have some tough times ahead unless the Fed can get this inflationary pressure under control,” Ms. McDaniel.

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