Food prices illustrate several challenges of containing inflation.
Editor’s Note: We are publishing this abbreviated commentary in advance of Thanksgiving. For those celebrating, we hope you have a wonderful holiday.
I’m expecting a record crowd for Thanksgiving this year. Three tables, spread over three rooms. Three turkeys, three quarts of cranberry sauce, and three pumpkin pies. Oh, and I will need three days afterwards to rest and recuperate.
At least the cost of this year’s meal will be a little more modest. The American Farm Bureau Federation announced that feeding a group of 10 will cost just over $61 this year, down 4.5% from last year. That is welcome relief, but the price of the meal is still 15% higher than it was in 2021.The cost of Thanksgiving staples traces a trajectory that is similar to what we have seen globally. The United Nations index of world food prices is down about 25% from its 2022 peak, but it is still about 25% higher than the pre-pandemic reading. Groceries have gotten a little cheaper, but they are still taking a big bite out of household budgets.
Disruptions caused by the pandemic and the war in Ukraine shocked the supply chains that feed the world. Higher energy prices have affected costs of production and transportation. Labor shortages have challenged harvesting and processing in spots.