Sun. Nov 28th, 2021

Thanksgiving celebrations will be back in the US after the pandemic disrupted them last year. But Americans will pay more to celebrate when they gather around dinner tables this Thursday.

Led by jumps in prices for wheat, turkey, potatoes and maize, the prices of food products typically included in a Thanksgiving meal were on average 25 percent higher than pre-pandemic levels in 2019, a Financial Times- analysis.

The cost of traveling to see family and friends is also higher, with the U.S. gasoline price rising more than 50 percent since the beginning of the year.

Strong inflation has become a barrier for consumers and a challenge for the White House and the US Federal Reserve. President Joe Biden on Tuesday tried to tame rising prices as his administration announced plans los 50m vate of state oil shares in energy markets.

Food inflation in the U.S., it is running at about 5-6 percent year-on-year, compared to about 1.3 percent annually in the past decade, he said. Jayson Lusk, professor of agricultural economics at Purdue University in Indiana. “The rate of food inflation is definitely much higher than we were used to,” he said.

Rising food costs have several causes, Lusk said. The fiscal stimulus undertaken in response to the coronavirus, boosted domestic U.S. consumption while boosting international food demand.

Droughts and inhospitable weather reduced crops, while some farmers were wary of increasing production because they were uncertain about the effects of the pandemic. Wages climbed for workers in food related sectors including meat processing, transportation and retail sales, which contribute to costs.

The American Farm Bureau Federation, a lobby group in Washington, estimates the average retail cost of the Thanksgiving turkey meal will increase by 14 percent this year.

At the center of the board, turkey prices were 34 percent higher than the 2019 average, based on data from commodity research group Mintec. When producers made plans for this season’s turkey herds at the end of 2020 and early 2021, they were hesitant about uncertain demand, says Eduardo Gonzalez, analyst at agricultural commodity research firm Gro Intelligence.

As a result, U.S. frozen whole turkey stocks were at their lowest in 37 years for the month in September, according to Gro Intelligence. The usual build-up of frozen stock before Thanksgiving did not materialize due to low turkey production as well as labor shortages.

Line chart of re-based commodity prices, on average for a selection of raw ingredients used in a traditional meal * (2019 = 100) showing that Thanksgiving dinner becomes more expensive

Grain and vegetable production has been hit by extreme drought in several areas of the US. Wheat prices rose by 66 percent compared to the 2019 average, driven by poor conditions in the US as well as leading producers such as Russia and Argentina.

Carrot prices were 34 percent higher compared to the 2019 average. Water shortages and irrigation restrictions on the U.S. west coast have hit root production, while potato prices have risen 13 percent due to the lack of deep soil moisture in key growth areas like Idaho, according to Mintec.

Americans will pay more for Thanksgiving meals at a time when US consumer prices are rising. The Consumer Price Index, published by the Bureau of Labor Statistics earlier this month, jumped 6.2 percent in October – the fastest annual rise since 1990 – and showed clear signs that inflation across large parts of the US economy was picking up.

$ 1 line graph showing US gasoline prices climbed to a seven-year high

In addition to the price for dinner, travel during the holidays will be more expensive with petrol prices above $ 3 per US gallon ($ 0.79 per liter) for the first time since 2014. President Biden said on Tuesday that consumers “have the impact of heightened feelings bird. gas prices at the pump and in their home heating bills ”as he linked the release of strategic oil reserves to the fight against inflation.

While this year’s vibrant demand and higher prices may encourage farmers and meat producers to increase output, economists warn that food prices could remain high until next year. For example, the price of chicken wings – a popular treat at events before the Super Bowl football final in February – is still 50 percent higher than the 2019 average, although lower from this year’s high in June.

“There’s all the pent-up demand, and everyone comes to the pubs and pubs and eats chicken wings,” Gonzalez said.

Line chart of restructured prices (2019 = 100) showing US chicken wing prices

High shipping and freight costs, strong prices for natural gas used to make fertilizer, and persistent labor shortages are likely to keep food inflation high, said Tom Bailey, senior consumer food analyst at Rabobank.

“We can see some decline in demand and an improvement in the supply chain situation, but the underlying issues will make their way to harvest prices and feed prices,” he said, adding that many manufacturers and retailers were completely reluctant to cut costs. by giving. on buyers so far.

Next year’s Thanksgiving meals could lead to further price increases, he said, noting: “We can say that 10-20 percent [rise for Thanksgiving dinner] is something we can be grateful for in terms of what we can pay next year. ”

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