Blog Post

From today’s annual report from the American Farm Bureau Federation (AFBF) on the cost of a classic holiday meal, “Farm Bureau Survey Reveals Lowest Thanksgiving Dinner Cost in Five Years”:

American Farm Bureau Federation’s 32nd annual price survey of classic items found on the Thanksgiving Day dinner table indicates the average cost of this year’s feast for 10 is $49.12, a 75-cent decrease from last year’s average of $49.87. The big ticket item – a 16-pound turkey – came in at a total of $22.38 this year. That’s roughly $1.40 per pound, a decrease of 2 cents per pound, or a total of 36 cents per whole turkey, compared to 2016. “For the second consecutive year, the overall cost of Thanksgiving dinner has declined,” AFBF Director of Market Intelligence Dr. John Newton said. “The cost of the dinner is the lowest since 2013 and second-lowest since 2011. Even as America’s family farmers and ranchers continue to face economic challenges, they remain committed to providing a safe, abundant and affordable food supply for consumers at Thanksgiving and throughout the year.” The shopping list for Farm Bureau’s informal survey includes turkey, bread stuffing, sweet potatoes, rolls with butter, peas, cranberries, a veggie tray, pumpkin pie with whipped cream, and coffee and milk, all in quantities sufficient to serve a family of 10 with plenty for leftovers. Consumers continue to see lower retail turkey prices due to continued large inventory in cold storage, which is up almost double digits from last year, Newton explained.

Some comments:

1. Compared to $49.87 last year, the cost this year for a classic Thanksgiving Day dinner for 10 people is $49.12, and 1.50% (and 75 cents) lower than the cost in 2016 (see dark blue line in top chart). That 1.50% decrease in the price for a turkey dinner in 2017 compares to increases over the last year of 2.00% for overall consumer prices and 2.3% for average hourly earnings.

2. The average price for a 16-pound turkey this year ($22.38) is 1.3% (and 36 cents) lower than last year’s price of $22.74, and the prices of other food items on the menu that fell from last year are were a gallon of milk, $2.99 this year; a dozen rolls, $2.26; two nine-inch pie shells, $2.45; a 3-pound bag of sweet potatoes, $3.52; a 1-pound bag of green peas, $1.53; and a group of miscellaneous items including coffee and ingredients necessary to prepare the meal (butter, evaporated milk, onions, eggs, sugar, and flour), $2.72.

3. Adjusted for inflation, the cost of a classic Thanksgiving dinner this year is 3.0% less expensive than last year, and the lowest since 2010 (see light blue line in top chart).

4. Compared to the cost of a Thanksgiving dinner in 1986 of $63.87 (in 2017 dollars), today’s classic turkey dinner is 23.1% cheaper at $49.12 this year.

5. Measured in time worked at the average hourly wage for all private production workers of $22.22 in October 2017, the “time cost” of this year’s classic turkey dinner is only 2.21 hours, down by 3.5% from 2.29 hours last year and at the lowest level since 1986 when this annual AFBF report started (see bottom chart). Compared to 1986 when the average American would have worked 3.21 hours to earn the income necessary to purchase the turkey dinner for 10, the “time cost” for a worker today (2.21 hours) is 31.2% lower.

Bottom Line: The fact that a family in America can celebrate Thanksgiving with a classic turkey feast for less than $50 and at a “time cost” of only 2.21 hours of work at the average hourly wage for one person means that we really have a lot to be thankful for on Thanksgiving: an abundance of cheap, affordable food. The average worker would earn enough money before their lunch break on just one day to be able to afford the cost of a traditional Thanksgiving meal. Compared to 1986, the inflation-adjusted cost of a turkey dinner today is more than 23% cheaper, and 31% cheaper measured in the “time cost” for the average worker. Relative to our income and relative to the cost of food in the past, food in America is more affordable today than almost any time in history.

Bon appetit!

Note: There has been criticism in past years that the AFBF’s classic Thanksgiving dinner menu wouldn’t really be enough food for 10 people. In that case, let’s say it’s more realistically a dinner for 4 or 8 people, or whatever number you think is more realistic. Whether it’s a Thanksgiving dinner for ten or one, the important point is that the AFBF determines the retail prices for a fixed basket of 12 food items every year and compares those retail prices over time. Call it a “Classic Thanksgiving Meal for X People,” and choose your own X – the comparison of the cost over time wouldn’t change!

According to the AFBF: “The Thanksgiving dinner survey was first conducted in 1986 and the survey menu has remained unchanged since 1986 to allow for consistent price comparisons.”