Food prices rise for Thanksgiving 2021 but consumers can still be thankful for affordable food

The cost of this year’s Thanksgiving feast will be higher than in 2020 , but consumers still have much to be thankful for this Thanksgiving as food prices are still the lowest in the world.

Food prices have been rising through 2021 and the Consumer Price Index for food released by the U.S. Department of Agriculture Economic Research Service on Oct. 25, 2021, shows a year over year increase of 4.6%. The biggest rise is coming from the meat, poultry and fish category which was up 10.4%.

South Dakota Farm Bureau President Scott VanderWal said several factors have combined to increase the cost of the holiday meal but especially supply chain bottlenecks and higher energy costs.

“We have the leftovers of the pandemic, we’ve also got energy prices that are going up very significantly, we have labor shortages, companies can’t hire enough people,” he said.

He said farmers are still doing their job on the farm producing food products, but there are logistical issues that have once again created problems getting products from the farm to consumers.

“There’s no shortage out here," VanderWal said. "It’s the processing and transportation that’s causing problems.”

Much of the increase in the price of the Thanksgiving meal is focused on the turkey, as prices are forecasted to be up this year. NDSU Extension livestock marketing economist Tim Petry said USDA reports whole hen turkey prices have increased steadily in 2021 currently at $1.33 per pound, 17 cents above 2020.

“Higher prices are the result of a decline in turkey production from 5.74 billion pounds last year to 5.63 billion pounds in 2021 or a 2.3% drop,” he said.

USDA is also forecasting record turkey prices for the year, with the average annual price at $1.21 per pound.

South Dakota Poultry Industries Association Executive Director Dr. David Zeman said retail turkey prices in the Midwest are up about 25% this Thanksgiving compared to 2020 and previous years.

“But there’s also great bargains out there, depending on how the supermarkets are marketing their product,” he said.

Zeman points out that higher prices are being paid for turkeys in the large metro areas verses the Midwest, which pulls the average up.

According to Zeman, there are enough birds being produced to take care of Thanksgiving needs, but the industry is having difficulty getting those birds to the grocery store due to supply chain issues, transportation bottlenecks and labor shortages at processing facilities. There is also increased demand for larger whole hens this year versus Thanksgiving 2020.

“This year everyone’s guessing that families are going to be getting back together and so they’re going to be looking for that bigger bird," Zeman said. "Where last year everybody was suddenly in a mode of wanting a very small bird because the groups that were gathering were two to four people, instead of 10 to 12.”

He said it's difficult to pivot production to accommodate that change in consumer preference because it takes 16 to 22 weeks to raise a whole hen for market, depending on the weight. Zeman said that means turkey producers needed to plan for that in the summer so there was enough time to get the birds transported to retail outlets for sale.

Despite food inflation this Thanksgiving and for 2021, American consumers spend less of their disposable income on food than anywhere else in the world.

“We should not take for granted that we have the cheapest food on the planet, and it’s been that way my entire life,” said South Dakota Lt. Gov. Larry Rhoden said.

He said for decades the United States farm and food policy has helped keep food prices affordable for the public and 2021 is no exception.

“That’s part of our cheap food policy but we also need to be cognizant that if foreign countries control our food supply, ultimately they control us,” he added.

As a percentage of the consumer’s income, food is still affordable in the U.S.

“The last 10 or 15 years anyway we’ve been in the 9% to 10% range of what we spend as a percentage of our income in this country on food,” VanderWal said.

In many other countries, consumers pay from 25% to upwards of 50% of every dollar they make on food, VanderWal pointed out.

“So, we have a lot to be thankful for in this country, especially this Thanksgiving,” he said.