With shoppers crowding grocery stores for Thanksgiving supplies this week, economists are warning that in spite of only modest increases in retail prices over the last twelve months, food prices are building on last year’s estimated 6.3 percent rise in food costs. But the real crunch may not be felt until next year’s holiday season as livestock and dairy producers continue to reduce their herds and commodity grain prices continue at record levels as a result of the 2012 drought.

According to the American Farm Bureau Federation, the good news is that the average cost of this year’s Thanksgiving feast for ten family members and friends will cost about $49.48, only a 28-cent increase from last year’s average of $49.20. The AFBF staged their 27th annual informal price survey last week and the results indicate most food items dropped slightly over the last 12 months.

“At just under $5 per person, the cost of this year’s meal remains a bargain,” said AFBF President Bob Stallman, a rice and cattle producer from Texas. “Our diverse farm and ranch families are honored to produce the food from our nation’s land for family Thanksgiving celebrations. During this holiday season, I am encouraging farmers and ranchers to reach out to consumers in person or through social media to answer questions about the food that they grow or the livestock and poultry they raise.”

AFBF’s menu included the usual and traditional favorites—turkey, stuffing, sweet potatoes, rolls, peas, cranberries, a relish tray, pumpkin pie and beverages. Of all items surveyed, the Thanksgiving turkey represented the largest price increase, an estimated $1.39 a pound, just about four cents a pound more than last year. But AFBF economists say America’s savvy shoppers may actually pay less for frozen turkey because of retail store special sales. Last minute shoppers may get the best prices if they don’t mind waiting and fighting the crowds.

Turkey price is up

According to the survey, the only other single food item that increased in cost this year was brown-and-serve rolls, up about three cents from 2011. But a combination of ingredients used in the preparation of Thanksgiving dinner, including eggs, onions, flour, sugar, evaporated milk and butter, were also slightly higher this year.

But these higher costs are offset by lower prices for whipping cream, down 13 cents on average; packaged bread stuffing, down 11 cents; sweet potatoes, down about four cents a pound; fresh cranberries, down three cents, and green peas and pumpkin pie filling, down about two cents each.

A look back over the years indicates a modest annual increase in the cost of holiday meals. For example, the average cost for Thanksgiving dinner for ten people in 1986 was just $28.74. In 1986 the same meal for the same number of people cost an average $31.66, and in 2006 the same meal for the same number of people was an estimated $38.10.

But economist warn that because of drought conditions last year, food prices are expected to continue to rise throughout most of 2013, and that could make for a hefty price jump for next year’s holiday dinner.

In addition to slightly higher food costs this year, Americans traveling by auto for the holidays may see slightly higher travel prices. While gasoline prices fell slightly over the last week leading up to Thanksgiving, economists are predicting pump prices will be elevated for the long holiday weekend.  

But while gas prices are higher, Purdue economists are saying that other energy prices are lower than a year ago, so Thanksgiving dinner will cost less to prepare at home. Electricity prices are down about 1.5 percent, and natural gas prices are about 8 percent lower than last fall.

With shoppers crowding grocery stores for Thanksgiving supplies this week, economists are warning that in spite of only modest increases in retail prices over the last twelve months, food prices are building on last year’s estimated 6.3 percent rise in food costs. But the real crunch may not be felt until next year’s holiday season as livestock and dairy producers continue to reduce their herds and commodity grain prices continue at record levels as a result of the 2012 drought.

According to the American Farm Bureau Federation, the good news is that the average cost of this year’s Thanksgiving feast for ten family members and friends will cost about $49.48, only a 28-cent increase from last year’s average of $49.20. The AFBF staged their 27th annual informal price survey last week and the results indicate most food items dropped slightly over the last 12 months.

“At just under $5 per person, the cost of this year’s meal remains a bargain,” said AFBF President Bob Stallman, a rice and cattle producer from Texas. “Our diverse farm and ranch families are honored to produce the food from our nation’s land for family Thanksgiving celebrations. During this holiday season, I am encouraging farmers and ranchers to reach out to consumers in person or through social media to answer questions about the food that they grow or the livestock and poultry they raise.”

AFBF’s menu included the usual and traditional favorites—turkey, stuffing, sweet potatoes, rolls, peas, cranberries, a relish tray, pumpkin pie and beverages. Of all items surveyed, the Thanksgiving turkey represented the largest price increase, an estimated $1.39 a pound, just about four cents a pound more than last year. But AFBF economists say America’s savvy shoppers may actually pay less for frozen turkey because of retail store special sales. Last minute shoppers may get the best prices if they don’t mind waiting and fighting the crowds.