Thanksgiving feast is back in effect, but the price is more expensive

Thanksgiving dinner will return again in the U.S. Pandemic Disrupted them last year. But when Americans sit around the dining table to celebrate this Thursday, they will pay more.

An analysis by the Financial Times in the United Kingdom showed that, driven by the price increase of wheat, turkey, potatoes and corn, the prices of food normally included in the Thanksgiving dinner were on average 25% higher than the level before the 2019 pandemic.

Travel costs to visit family and friends are also higher. Since the beginning of this year, gasoline prices in the United States have risen by more than 50%.

Strong inflation has become a drag on consumers and a challenge for the White House and the Federal Reserve.On Tuesday, President Joe Biden tried to curb rising prices because his government announced plans Release 50m barrel Government oil stocks enter the energy market.

Food inflation The annual growth rate in the United States is about 5-6%, while the annual growth rate in the past ten years is about 1.3%. Jason LaskerProfessor of Agricultural Economics, Purdue University, Indiana. “The food inflation rate is definitely much higher than we are used to,” he said.

Lusk said there are several reasons for rising food costs.this Fiscal stimulus Measures taken in response to the coronavirus have boosted domestic consumption in the United States, while international food demand has been strong.

Drought and bad weather have reduced the harvest, and some farmers are cautious about increasing production because they are not sure about the impact of the pandemic.Workers’ wages have risen Food related departments Including meat processing, transportation and retail, increasing costs.

The Washington lobbying group, the U.S. Agriculture Confederation, estimate The average retail cost of a Thanksgiving turkey meal this year will increase by 14%.

According to data from the commodity research group Mintec, in the center of the sector, the price of turkey is 34% higher than the average price in 2019. Eduardo Gonzalez (Eduardo Gonzalez), an analyst at the agricultural commodities research company Gro Intelligence, said that when producers plan for the season’s turkey herd in late 2020 and early 2021, they hesitate about uncertain demand Undecided.

Therefore, according to data from Gro Intelligence, the stock of whole turkeys frozen in September in the United States was at its lowest level in 37 years. Due to low turkey production and labor shortages, frozen stocks are usually accumulated before Thanksgiving.

Rebased commodity price line chart, the average value of selected raw materials used in traditional meals* (2019 = 100) shows that Thanksgiving dinner has become more expensive

The production of grains and vegetables has been affected by extreme droughts in different parts of the United States.The harsh conditions in the U.S. and leading growers such as Russia And Argentina.

Compared with the 2019 average, carrot prices have increased by 34%. According to Mintec, water shortages and irrigation restrictions on the West Coast of the United States have affected carrot production, while potato prices have increased by 13% due to the lack of deep soil moisture in major growing areas such as Idaho.

At a time when consumer prices in the United States generally rise, Americans will spend more money on Thanksgiving dinner. The Consumer Price Index released by the U.S. Bureau of Labor Statistics earlier this month, Skipped The October growth rate was 6.2%—the fastest annual increase since 1990—and showed clear signs of rising inflation in all areas of the US economy.

A line chart of dollars per gallon shows that U.S. gasoline prices have climbed to a seven-year high

In addition to dinner prices, travel expenses during the holidays will be higher, with gasoline prices exceeding US$3 per gallon (US$0.79 per liter) for the first time since 2014. President Biden said on Tuesday that consumers “felt the impact of rising oil prices.” The price of gasoline at gas stations and the heating bills of their homes” because he linked the release of strategic oil reserves with curbing inflation.

Although strong demand and higher prices this year may encourage farmers and meat producers to increase production, economists warn that food prices may remain high next year. For example, the price of chicken wings-a popular treat at the Super Bowl football finals in February-is still 50% higher than the 2019 average, although lower than the peak in June this year.

“With all the suppressed needs, everyone comes to bars and pubs to eat chicken wings,” Gonzalez said.

Rebase price (2019=100) line chart showing rising prices of chicken wings in the U.S.

Rabobank senior consumer food analyst Tom Bailey said that high transportation and freight costs, strong prices of natural gas used to make fertilizers, and continued labor shortages may keep food inflation high.

“We may see a decrease in demand and an improvement in supply chain conditions, but potential problems will affect crop prices and feed prices,” he said, adding that many manufacturers and retailers have been completely suppressing pass-on costs until now until.

He said that next year’s Thanksgiving dinner may lead to further price increases, noting: “We can say 10-20% [rise for Thanksgiving dinner] In terms of what we might have to pay next year, this is something we can thank. ”

Source link