sealPurdue News

November 8, 2002

Consumers can be thankful for food prices this Thanksgiving

WEST LAFAYETTE, Ind. – Consumers will find plentiful supplies of favorite Thanksgiving foods at reasonable prices, according to a Purdue University agricultural economist.

"Overall, grocery store prices this fall are running about one-half percent higher than one year ago, a remarkably low annual food price rise," said Joseph Uhl, a food marketing economist at Purdue University. "Intense price competition between traditional grocery stores and mass merchandisers entering into food retailing has helped hold down food prices."

Uhl, who annually takes a look at food prices around Thanksgiving, said retail food prices this year are rising less rapidly than other consumer prices. Other factors holding prices down include record red meat supplies and only moderate rises in food marketing costs.

This year's rise in the turkey supply also has lowered the cost for consumers.

"Turkey production is running about 4 percent higher than last year, and frozen turkey prices are about 8 percent lower than last year," Uhl said. "Large beef and pork supplies, as well as holiday price specials, will hold down holiday meat prices."

Cranberries, turkey's fruity complement, have increased in production by 7 percent this year, Uhl said.

Pumpkins will be smaller and higher priced than last year due to this summer's drought. Other products suffered from the lack of rain as well.

"This summer's drought took a toll on grain and oilseed harvests, pushing up the retail prices of cereals, bakery products and cooking oils," Uhl said.

At the same time, drought conditions were responsible for lowering some costs – at least temporarily.

"The short-term effects of this summer's dry weather increased the costs of livestock production, encouraging producers to market their animals, which has increased meat supplies and lowered retail meat prices," Uhl said. "While this means higher meat prices next year, food shoppers are getting a bargain this year."

Uhl said dairy product prices also are at bargain levels. Milk production this year is considerably more than last year, a result of rising milk cow numbers and output per cow. The farm price of milk this year is $3 per 100 pounds of milk below last year's level, the largest yearly drop in 50 years.

Retail milk prices are running 5 percent to 7 percent lower than one year ago. The retail price of American processed cheese is 1 percent to 2 percent lower than last year at this time.

Uhl said ice cream prices have increased because consumers are purchasing higher quality, premium brands, but coffee and orange juice prices are lower than last holiday season.

As for fruits and vegetables:

• Potatoes are priced above last year's levels as a result of lower harvests last year and cool, wet weather in the major producing areas this spring.

• Sweet potato acreage was down this year compared to harvests in 2000 and 2001.

• Apples, pears and stone fruits have increased in price due to weather problems and lower production.

• Orange prices are lower this year, with California production up and Florida production down.

"Retail prices of fresh vegetables, canned, and frozen fruits and vegetables will be higher than last year," Uhl said.

Cooking supplies that will cost a bit more this year include eggs, flour, spices and seasonings. While sugar prices are somewhat lower than last year, retail prices of olives, pickles, relishes and soups are up slightly from levels a year ago.

Coffee prices are down about 3 percent from last year as a result of rising world supplies, and carbonated beverage prices are down about 1 percent as sweetener prices declined. Snack products will be a little higher than last year.

Writer: Barney Haney, (765) 494-8402,

Source: Joseph Uhl, (765) 494-4219,

Ag Communications: (765) 494-2722; Beth Forbes,;

Purdue News Service: (765) 494-2096;

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