What is in this article?:
- Thanksgiving dinner just got more expensive
- Why the increase?
- Looking at overall food price inflation, consumers are probably going to be paying about 5 percent to 6 percent more for Thanksgiving dinner than last year, which is an above-average increase in food costs.
Why the increase?
Food prices are rising for several reasons, Alexander said.
"The main reason for higher prices this year is the increase in commodity prices, as the global economy picks up," she said. "Weather events such as flooding in the Midwest and drought in the southern Plains also played a role."
Grain prices began surging in 2010 when drought devastated the Russian wheat crop and continued to rise on the heels of a smaller-than-expected U.S. corn crop, Alexander said.
"Because of these substantially higher commodity grain prices and the drought in the southern Plains, livestock and dairy producers have delayed expansion or even continued reducing their herds," she said. "As a result, consumers have seen higher prices for meat and dairy products in 2011. These higher prices will continue into 2012."
In addition to a more costly feast, consumers will spend more traveling to enjoy Thanksgiving with family or friends. Gas prices are about 33 percent higher than this time last year, Alexander said.
While the average American spends about 10 percent of their income on food, this Thanksgiving could be tougher for many who have lost their jobs or are underemployed.
"Consumers right now are struggling," Alexander said. "They're facing tight budgets where there's been little, if any, wage growth. If anything, they've seen their wages decrease, either through fewer work hours or pay cuts, or they may be on a fixed income and haven't gotten cost-of-living increases that match where inflation is today.
"Retailers are fully aware of this, and they are doing everything they can to not increase food prices. But at some point they have to make at least enough money to stay in business, so they have to pass on these higher ingredient costs to consumers. Everybody is between a rock and a hard place."