As I reflect on the past year, I feel truly blessed. I have my health, the love of my family, great friendships, and a strong support system in the beef industry. The future of the cattle business looks bright, and I'm learning and growing as a cattle woman each and every day, both through personal experiences and from advice offered on this blog. Today is about giving thanks and being grateful, but I'm also mindful for those who struggle to put a nice meal on the dinner table because of the cost.
It's no secret that food prices are rising in this country. Escalating input costs, increased export demand for our products and fewer ranchers to raise food have definitely had a significant impact on Americans' grocery store bill. Yet, as Americans, we still spend less than 10% of our annual disposable income on food, but that doesn't mean the rise in food prices hasn't gone unnoticed.
According to Purdue University, Americans talking turkey this Thanksgiving might say some not-so-grateful words about the price of the traditional protein. Although there should be adequate supplies of the holiday gobbler, wholesale prices/pound are expected to range between $1.07 and $1.11 - up 3-7¢/lb. from last year. The higher price reflects a general increase in food prices this year.
“Looking at overall food price inflation, consumers are probably going to be paying about 5-6% more this year for Thanksgiving dinner than last year, which is an above-average increase in food costs,” says Corinne Alexander, Purdue University ag economist. “We consider normal food price inflation at somewhere around 2.5%.”
Food prices are rising for several reasons, she explains.
“The main reason for higher prices this year is the increase in commodity prices, as the global economy picks up,” she says. “Weather events, such as flooding in the Midwest and drought in the Southern Plains, also played a role. Because of these substantially higher commodity grain prices and the drought in the Southern Plains, livestock and dairy producers have delayed expansion or even continued reducing their herds. As a result, consumers have seen higher prices for meat and dairy products in 2011. These higher prices will continue into 2012.”
In addition to a more costly feast, consumers will spend more traveling to enjoy Thanksgiving with family or friends. Gas prices are about 33% higher than this time last year.
“Consumers right now are struggling,” says Alexander. “They’re facing tight budgets where there’s been little, if any, wage growth. If anything, they’ve seen their wages decrease, either through fewer work hours or pay cuts, or they may be on a fixed income and haven’t gotten cost-of-living increases that match where inflation is today. Retailers are fully aware of this, and they are doing everything they can to not increase food prices. But at some point, they have to make at least enough money to stay in business, so they have to pass on these higher ingredient costs to consumers. Everybody is between a rock and a hard place.”
What’s on your Thanksgiving Day menu? Did you cut back in relation to the rise in food prices? Share some of your favorite Thansgiving memories.