In the lead-up to this year’s Thanksgiving, it’s impossible to ignore a remarkable and concerning trend — the cost of Thanksgiving dinner. The price of putting together the traditional feast has surged, with some essential ingredients and items costing nearly 60% more than they did just five years ago. 

This article delves into the factors behind this noteworthy increase in Thanksgiving dinner prices, offering a comprehensive exploration of the economic forces at play, the implications for households and practical strategies for managing these cost hikes while continuing to savor the cherished traditions of the holiday.

Whether you’re a seasoned Thanksgiving host or new to the role, understanding the reasons behind these changes is essential to navigate the increasingly expensive landscape of this beloved American celebration.

Statistics of Thanksgiving Dinner Ingredient Prices

In 2022, the U.S. average cost of ingredients for a 10-person Thanksgiving dinner was examined. Specifically, a 16-pound turkey was priced at $28.96. The complete meal consisted of turkey, bread stuffing, sweet potatoes, rolls with butter, peas, cranberries, a relish tray with carrots and celery, pumpkin pie with whipped cream and beverages like coffee and milk — all in quantities suitable for a 10-person family gathering.

I also did my own research and asked Google Bard about the price difference of Thanksgiving prices between November 2018 and November 2023. Here’s what I found:

Item	Price in 2018	Price in 2023	Price Increase
Whole turkey (16 lbs.)	$21.63	$34.75	60%
Potatoes (5 lbs.)	$1.76	$2.96	70%
Boxed Stuffing (14 oz)	$2.87	$4.66	60%
Dinner Rolls (1 doz.)	$2.89	$4.48	50%
Green Beans (1 lb.)	$1.49	$2.28	50%

NOTE: The numbers above were estimated for a family of 4 to 6 people.

Based on data from CNN and the Wells Fargo Agri-Food Institute, the price of a 10-to-15-pound turkey decreased by 13% in October compared to the previous year. Fresh cranberries were also about 20% cheaper. However, canned goods like cranberry sauce, pumpkin puree and green beans saw price increases in 2023.

Despite the varied grocery price changes, Walmart (NYSE:WMT) aimed to alleviate holiday spending stress. Between November 1 and December 26, the company reduced prices on popular holiday food items. It also introduced a Handy Holiday Meal Calculator to aid Thanksgiving budgeting.

What Made the Food Price Spike?

Yes, food prices have experienced an upward trend. A mix of factors such as inflation, supply chain disruptions due to the pandemic and tariffs on selected imports contributed to this increase since 2020. However, over the past year, inflation has slowed, and recent data reveals a moderation in grocery costs. 

Between September 2022 and September 2023, food prices increased by 3.7%, as per the latest consumer price index report by the Bureau of Labor Statistics. To put it in perspective, food prices surged 11.2% between September 2021 and September 2022. The CPI uses various indexes to track average price changes for items, including those related to food expenses.

Food prices have surged due to multiple factors — inflation, labor expenses, supply chain disruptions and the Ukraine conflict. Labor costs remained notably high, as per the U.S. Bureau of Labor Statistics. Additionally, the U.S. Department of Agriculture estimated a 3.7% food inflation increase for 2023.

Severe droughts and wildfires in the western United States led to reduced crop yields, consequently raising food costs for consumers. Persistent supply chain issues stemming from the pandemic have continued to affect food availability.

The war in Ukraine, often referred to as “the breadbasket of Europe,” has impacted the nation’s food exports significantly. Historically, Ukraine’s food exports represented 9% of the global wheat market and 12% of the corn market, according to the USDA’s Foreign Agricultural Service. As a result of these factors, food prices are anticipated to rise in 2023, although at a slower rate than observed in 2022, as per USDA projections.

Food Prices Are the Highest This Year

Amid declining U.S. inflation, groceries remained expensive. Supermarket prices spiked dramatically, making items like eggs and bread unaffordable for some. Over two years, egg prices skyrocketed, pushing consumers to unconventional measures, including smuggling eggs from Mexico and substituting Easter potatoes for dyed eggs to save on expenses. Additionally, meat, fish, chicken, cereal and bread saw substantial price hikes, with bread costing over 20% more in 2023 than in 2021.

The GAO highlighted issues along the food supply chain, such as higher costs for animal feed and packaging shortages, affecting prices. Food processing claimed the largest share, taking 25 cents from each food dollar, followed by retail trade. Meanwhile, farm production contributed only 14 cents, and agribusiness added 5 cents.

Supply chain disruptions due to COVID-19 impacted various food chain segments, with increased feed costs mainly affecting production. The role of profits is often overlooked in cost analysis, raising questions about how increased expenses are distributed.

While the GAO report doesn’t analyze profits directly, evidence indicates their significant role in inflation. Corporate profit margins reached their highest levels in decades in 2022. Retail executives have openly discussed raising prices, and the FTC is investigating potential price-gouging.

Conclusion

The soaring prices of Thanksgiving dinner ingredients over the past five years present a pressing concern for American households as they prepare to celebrate this beloved holiday. The statistics we’ve examined, comparing prices from 2018 to 2023, reveal substantial increases in the costs of essential items — with some experiencing a staggering 60% to 70% price hike.

Amid declining overall U.S. inflation, grocery bills have surged significantly, rendering items like eggs, bread, meat, fish, chicken and cereal increasingly unaffordable for many. In this context, it’s worth noting the intricate dynamics of the food supply chain, where costs are distributed differently across various segments, from farm production to retail trade. The role of corporate profits, which reached record highs in 2022, cannot be overlooked in understanding the inflationary pressures on food prices.

As families and individuals prepare to gather and give thanks this Thanksgiving, the rising cost of the feast is a stark reminder of the broader economic challenges many face. While various factors have contributed to these price hikes, consumers need to stay informed, plan thoughtfully and explore budget-friendly alternatives to ensure a memorable and affordable holiday celebration.

On the date of publication, Chris MacDonald did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.