The traditional Thanksgiving holiday reflects two current trends in the home food economy: increased retail food spending varies by category and the supply chain is returning to pre-COVID patterns. (Karen Bonnert)
The traditional Thanksgiving holiday reflects two current trends in the home food economy: increased retail food spending varies by category and the supply chain is returning to pre-COVID patterns. Dr. Michael Swanson, chief economist at Wells Fargo, provided more detail in the bank’s annual Thanksgiving food report, in which he said some categories were not clear on pricing until the weeks just before Thanksgiving.
“It was a surprising report and it’s really changed the dynamic over the last couple of weeks as we watch these markets,” says Swanson. “Food inflation is still rising at the retail level, but the rate of growth is much slower now.”
From the Thanksgiving report, he details:
For the year, whole fresh turkeys are down 16% at the retail level. This is despite a nearly 30% drop in wholesale turkey prices. Swanson doesn’t think the consumer will be able to get more than the price spread.
“We saw about a million and a half more birds put into the barn in June and July this year compared to the year before,” he says. “Just kidding, if Turkey doesn’t celebrate the Fourth of July, it won’t celebrate Thanksgiving. So we’ve seen excess supply and the bigger birds are really putting a lot of pressure on wholesale prices.”
Swanson notes that 84% of fresh turkeys sold are sold in November.
Garnishes of vegetables, fruits and potatoes
Canned foods experience increased packaging input costs.
“Canned produce is a lot more expensive than a year ago on a percentage basis, but as part of your spending in your budget, it probably won’t break the bank,” says Swanson. “It’s always the protein that really catches people’s eyes — that’s where the dollars are spent.”
Cranberries provide an example of a counterpoint to the current price difference of canned versus fresh. While fresh blueberries are down 20%, canned cranberries are up 60% and canned cranberry sauce is up 7%.
Canned green beans are up 9% year over year. Canned pumpkin is up 30% this year compared to last.
“Fresh produce is not growing at such a high rate. First, we have good harvests this year. And refrigerated deliveries are down—a year ago, the delivery guys were paying $3.80 a mile, and this year it’s $3.30 a mile,” says Swanson.
Swanson notes that consumers who live near the production of key crops may see lower prices, which cranberries and green beans do not. 1 pumpkin growing state is Wisconsin, while Illinois is the top pumpkin growing state.
Dry weather in 2022 in the Pacific Northwest lingers on this year’s potato crop as pricier seed potatoes set the stage for 2023. Swanson notes red potatoes are having an all-time year: $1.17 in September 2023 compared to $1.08 at the same time last year.
When it comes to sweet potatoes, nearly two-thirds of our national crop comes from five North Carolina counties. Thanks to good yields and storage, prices in this category have increased by only 4% compared to 2022.
Supply chain status
“The supply chain is completely healed. Retailers now see that they can get the products they want and talk to wholesalers about price,” says Swanson. “Retailers are using more features and looking for trade money within the channel.”
Thus, Swanson suggests that deals should be found by shopping the specials and, if possible, visiting more than one store to take advantage of the different sales and offers.
“In 2024, we’re likely to see some of the food categories decline year-over-year,” says Swanson, specifically highlighting pork and poultry as sectors to watch.