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Turkey Day cheaper in Indiana, costlier for general consumers

By MEGGIE I. FOSTER
Assistant Editor

WASHINGTON, D.C. — With rumblings of higher food prices anticipated for the holidays, according to the Indiana Farm Bureau’s annual survey results, this year’s Thanksgiving dinner could be a bit cheaper than usual for Hoosiers.

A traditional Thanksgiving dinner will cost Indiana families less this year, according to an informal survey of grocery stores across the state. Unfortunately, even though Indiana boasts a $2 drop in turkey day costs from last year, the national survey conducted by the American Farm Bureau Federation showed a $2.35 price increase from 2007.

Indiana Farm Bureau’s annual survey of local prices for basic food items found on the Thanksgiving Day dinner table showed that the average cost of this year’s dinner for 10 is $45.58 – down $2.05 from last year’s average of $47.63 for the state of Indiana. The national survey showed an average total cost of $44.61, a $2.35 price increase from last year’s national average of $42.26.

To rally the data for the Indiana survey, 34 volunteer shoppers picked a grocery store in their area and collected prices from actual items on the dinner list provided by IFB. They were asked to look for the best possible prices, without taking advantage of promotional deals.

Because turkey is by far the largest ticket item, the cost of the total meal is usually driven by the price of the bird. On the Indiana survey, the cost of turkey dropped from $1.49 per pound in 2007 to $1.33 per pound in 2008, making this year’s average price for a 16-pound bird $23.84. While, neither the national nor Indiana surveys is scientific, according to IFB, they present a decent snapshot of basic holiday dinner item prices.

“Even with an average Indiana cost of $45.58, this comes out to less than $5 per person for a delicious turkey dinner,” said IFB Second Vice President Isabella Chism, noting that this price is comparable to a typical fast-food meal. “That’s an amazing bargain, especially when you consider how the cost of just about everything is going up.”

Purdue results show
6 percent increase

Going up indeed. In fact, Purdue University agricultural economist Corinne Alexander recently said that consumers should expect to see a 6 percent increase in total turkey day dinner costs compared to 2007.

“Thanksgiving food prices are up about 6 percent compared to last year,” Alexander said. “What’s interesting is the difference between grocery store prices compared to restaurant prices.

“Grocery store prices are increasing at a pace of 7.6 percent, compared to a pace of 4.5 percent for restaurants.”

While eating out is also an option, Alexander said consumers will find that retail food costs have risen 3 percent higher than restaurant menu prices since last year.

According to Alexander, food retailers are passing higher commodity and energy costs on to consumers. In turn, supermarket prices are climbing quicker than restaurant prices because about half the cost of a restaurant meal is tied to labor, and restaurant wages are flat, she explained. But for Thanksgiving Day house guests who expect a traditional turkey meal at home, Alexander said there are a few bargains to be found in the grocery aisle, including the continued holiday staple, the turkey.

“There’s a plentiful supply of turkey,” Alexander said. “Turkey production in the U.S. is up 6 percent from last year. The U.S. Department of Agriculture predicts that the wholesale price of whole turkey in the eastern market is going to be between 94 cents and 98 cents per pound. Whether or not that translates through to the retail price and what retail price consumers pay is going to depend on the individual retailer pricing decision.”

She added that the estimated wholesale price for turkey is 3 cents to 7 cents per pound higher than in 2007, likely driven by higher export demand for U.S. turkey.

Still, “turkey is a favorite loss leader item for grocery stores, where they’ll offer you a coupon or a discount to give you a really great price on turkey,” Alexander said. “The reason is that grocery stores are hoping that when you come to pick up that turkey you’re also going to buy your potatoes, your cranberries and all of the other items that you serve at Thanksgiving.”

Many side items should be moderately priced this Thanksgiving, she added.

“Cranberry supplies are up 5 percent from last year because we’ve got the second largest crop ever. We should see very good cranberry prices this year,” she said.

For the always filing potato side, Alexander said she has seen white potato prices go up 35 percent this fall because white potato acres were down 8 percent from last year. “In contrast, sweet potato prices have come down because we have a record sweet potato crop in North Carolina,” she explained.

For those looking for an alternative to the traditional glistening turkey, the price of ham is reported to be 4 percent more than one year ago, Alexander said.

And preparing the holiday feast will be more expensive this season too, she claimed. Natural gas costs are up 18 percent and electricity is up 7 percent from fall 2007. Conversely, gasoline prices have fallen 20 percent in the past month, which may aide the cost of travel during the popular family holiday.

11/26/2008