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Free Market Power: Thanksgiving Dinners Are 27% Cheaper Than in 1986

November 27, 2019 Topic: Economics Region: Americas Blog Brand: The Buzz Tags: ThanksgivingEconomicsThanksgiving DinnerTurkeyDressingAmerica

Free Market Power: Thanksgiving Dinners Are 27% Cheaper Than in 1986

Amazing.

From today’s annual report and press release from the American Farm Bureau Federation (AFBF) on the cost of a classic holiday meal, “Thanksgiving Dinner Cost Down for Third Straight Year“:

The American Farm Bureau Federation’s 34th annual survey of classic items found on the Thanksgiving Day dinner table indicates the average cost of this year’s feast for 10 is $48.91, or less than $5.00 per person. This is a 1-cent increase from last year’s average of $48.90.

“The average cost of this year’s Thanksgiving dinner is essentially unchanged from last year, after three years of decline since 2015,” said AFBF Chief Economist Dr. John Newton. “Americans continue to enjoy the most affordable food supply in the world, but most don’t realize only 8 cents of every dollar consumers spend on food goes to farmers,” he added.

The centerpiece on most Thanksgiving tables – the turkey – costs slightly less than last year, at $20.80 for a 16-pound bird. That’s roughly $1.30 per pound, down 4% from last year. The survey results show that retail turkey prices are the lowest since 2010.

More than 250 volunteer shoppers checked prices at grocery stores in 38 states for this year’s survey. Farm Bureau volunteer shoppers are asked to look for the best possible prices, without taking advantage of special promotional coupons or purchase deals.

The shopping list for Farm Bureau’s informal survey includes turkey, 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.

Some comments:

1. Compared to $48.90 last year, the cost this year for a classic Thanksgiving Day dinner for 10 people was essentially unchanged this year at $48.91 (see blue line in top chart). While the price for a turkey dinner in 2019 remained flat, that compares to increases over the last year of 1.8% for overall consumer prices and 3.50% for average hourly earnings.

2. The average price for a 16-pound turkey this year ($20.80) is 4.2% (and 91 cents) lower than last year’s price of $21.71, and the price of the other food items on the menu that fell from last year were pumpkin pie mix and cubed stuffing; and there was no change in the price of whipping cream.

Items on the Thanksgiving menu that increased slightly in price since last year were milk, veggie tray, rolls, pie shells, green peas, cranberries and sweet potatoes.

3. Adjusted for inflation, the cost of a classic Thanksgiving dinner this year is 1.6% less expensive than last year, and the lowest since 2006 (see light blue line in top chart).

4. Compared to the cost of a Thanksgiving dinner for 10 in 1986 of $66.89 (in 2019 dollars), today’s classic turkey dinner is 26.9% cheaper at $48.91 this year.

5. Measured in time worked at the average hourly wage for all private production workers of $23.51 this year, the “time cost” of this year’s classic turkey dinner is only 2.08 hours, down by 3.7% from 2.16 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 (2.08 hours) is 35.2% lower.

Bottom Line: The fact that a family in America can celebrate Thanksgiving with a classic turkey feast for ten people for less than $50 and at a “time cost” of only 2.08 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 morning coffee break on just one day to be able to afford the cost of a traditional Thanksgiving meal for ten. Compared to 1986, the inflation-adjusted cost of a turkey dinner today is more than 27% cheaper, and 35% 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!

This by Mark J. Perry first appeared in 2019 on the AEI Ideas blog here

Image: Public Domain Pictures.