Thanksgiving 2021 is set to be the most expensive holiday meal on record. The average cost of preparing the meal in 2020 was $47, according to the Farm Bureau, and they anticipate a 5% increase this year. Every element of the meal, from cookware to after-dinner coffee, is set to rise. The Consumer Price Index reports that food has inflated 4.6% from a year ago while meat, poultry and fish have seen a 10.5% rise.
As supply chain issues persist through the pandemic years, there is no one single contributor to the increase in dinner prices. The supply chain chaos is compounded with a truck driver shortage, backlogged ports, and high demand. “The average end-to-end shipping time from China to the United States was 73 days in September, up from 40 days two years earlier…”[1] Jerome Powell, Chair of the Federal Reserve, recently stated that the tangled supply chain mess is increasingly getting worse, and consumers will likely see inflation into 2022.
Main meal components seeing an increase:
- Turkeys – Corn, used as feed, has become more costly
- Canned Goods – Domestic steel plants are catching up on production and combined with labor shortages, domestic steel has become more expensive. Simultaneously, China has limited steel production to reduce carbon emissions. The result is a 200% increase in the price of steel.
- Baked Goods – “The baking industry, which tracks prices of core inputs including sweeteners and cocoa, reports price hikes in 49 of the top 50 ingredients, says Robb MacKie, chief executive of the American Bakers Association. The group expects prices of baked goods to rise another 5 to 10 percent in all categories between now and the end of the year.”[2]
- Coffee – “Nestlé, Chief Financial Officer François-Xavier Roger said the company expected inflation to increase its cost of goods sold by around 4% this year. He said increases in the price of coffee will likely be larger next year.”[3] Additionally, Brazil saw a frost in July that impacted their crops of
- Wine – As California surges with rising energy costs and glass bottles float on ships in the port, California wines are paying the price.
As demand increases and supply chains are in turmoil, consumers will ultimately be left paying higher prices for day-to-day essentials. Until demand weakens and consumers stray away from their loyal brands, the inflation trend will continue through the holiday season.
[1] https://www.nytimes.com/2021/10/25/dining/thanksgiving-inflation-supply-chain-food-costs.html
[2] https://www.washingtonpost.com/business/2021/09/15/food-inflation-faq/
[3] https://www.msn.com/en-ca/money/companies/a-whole-bunch-of-household-essentials-are-about-to-get-more-expensive/ar-AAPPI92?ocid=sl
