UNIDENTIFIED PERSON, BYLINE: NPR.
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CARDIFF GARCIA, HOST:
Hey, everyone. This is THE INDICATOR FOR PLANET MONEY. It's Cardiff. And I'm joined today by editor Paddy Hirsch.
PADDY HIRSCH, BYLINE: Happy Thanksgiving.
GARCIA: Happy Thanksgiving, Paddy. Every year, right before Thanksgiving, the American Farm Bureau sends out hundreds of volunteer shoppers into grocery stores all throughout the country, all 50 states. Their mission - to find and report the prices of the ingredients that go into a traditional Thanksgiving dinner.
HIRSCH: And in the most mouthwatering way possible, here is Farm Bureau Chief Economist John Newton listing a bunch of those ingredients.
JOHN NEWTON: I mean, it's your classic Thanksgiving dinner. So you obviously have the turkey. So they're checking turkey prices. We've got stuffing, sweet potatoes, brown and serve rolls, cranberries for the cranberry sauce, your pie shells, your pumpkin pie mix, whipping cream, a gallon of milk.
HIRSCH: But it goes without saying - the prices of these ingredients will be different depending on where you are in the country.
GARCIA: Yeah, absolutely. I mean, a turkey that you buy at a Whole Foods in Manhattan is probably going to be more expensive than a turkey you buy at a Hy-Vee in Iowa, partly because the price of everything is higher in Manhattan, but also for other economic reasons too, John says.
NEWTON: You also have different supply chain costs to get that bird into grocery stores. You know, in Manhattan, for example, it's going to be more expensive to do that than, say, put it in a grocery store in Iowa, where you're very close to where turkeys are produced.
HIRSCH: So what John and the crew at the Farm Bureau do is find the average price of each ingredient across the whole country. Then they add those prices to find the total cost of that classic Thanksgiving dinner.
GARCIA: And every year, John and the Farm Bureau look at these same ingredients so that they can see just how the cost of Thanksgiving dinner has changed through the years. And this is the 35th straight Thanksgiving that the Farm Bureau has conducted the survey.
HIRSCH: But this is 2020. It's a year unlike any other. The COVID pandemic has upended so many parts of our lives, and that includes the prices of the foods we love to eat on Thanksgiving.
GARCIA: So today on the show, how and why the price of Thanksgiving has changed - not just this year, though, but also through the decades.
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GARCIA: The American Farm Bureau is a group that represents farmers throughout the country. And in its annual survey, it found that the average cost of Thanksgiving dinner for 10 people this year is $46.90. That is today's indicator - 46.90.
HIRSCH: And the Farm Bureau Chief Economist John Newton says that figure is low, really low.
NEWTON: That's down 4% from what we saw last year, and actually is the lowest level that we've seen since 2010.
HIRSCH: And that's without adjusting for inflation. We asked John if he could tell us how the cost of Thanksgiving dinner has changed when he does adjust for inflation.
GARCIA: And specifically, what we wanted to know was if it was possible that Thanksgiving dinner was actually the cheapest it had ever been since the survey was started back in 1986.
NEWTON: Wait. Let me power up my spreadsheet just to make sure.
GARCIA: Sure. Sure. Sure. Go for it. Yeah. Yeah. Check it out.
NEWTON: Yes, it is. It is the lowest that it's been in 35 years.
GARCIA: Wait a minute. Can you just state that again? What did you just tell me?
NEWTON: That in inflation-adjusted dollars, Thanksgiving dinner is going to be the lowest it's been in 35 years.
GARCIA: Aren't you stunned?
NEWTON: You know, I am, actually. I don't know why I didn't look at that particular statistic before you asked me.
HIRSCH: Cardiff - correcting the Farm Bureau's work.
GARCIA: No, not correcting, just needed a little bit of prodding. You know, that's what we journalists are here for. So John says that you basically have to understand two stories to also understand why Thanksgiving dinner is so cheap this year. There's the short-term story of what happened in 2020 and also the long-term story of what's happened over the last few decades.
HIRSCH: OK. So here's the first story. What happened this year? The ingredient with the biggest decline in its price is the turkey, John says.
NEWTON: Turkey prices came in at $1.21 per pound. That was down 7% from what we saw last year, which means you can put a 16-pound bird on the table for less than $20 this year.
HIRSCH: And this could be partly because the pandemic has forced families not to gather together in the same big groups as they normally would, so there's just less demand for those big turkeys that families usually buy. And it's also because a lot of grocery stores have discounted the price of Turkey, frankly, just to get people through the door.
NEWTON: According to the Department of Agriculture, more than 80% of retailers were running promotions across the country when we started this survey. So you'll see Turkey prices that range anywhere from 29 cents a pound all the way up to, you know, $2.99 a pound, depending on what type of grocer you're in.
GARCIA: Another ingredient with a big decline in price this year - whipping cream. And that's because the price of butter, which is used to make whipping cream, is also way down. And the reason for that, John says, is that demand for butter from restaurants has fallen tremendously just because so many restaurants have spent at least part of the year closed or just offering takeout.
NEWTON: All that butter that went into the restaurant chain wasn't offset by people making more cookies at home, and that's why you saw lower butter prices.
HIRSCH: And a similar dynamic applies to the big fall in the price of sweet potatoes. That's the third ingredient that's really driven down the cost of Thanksgiving dinner.
NEWTON: I mean, there's a sweet potato fry, a sweet potato tot. A lot of those sweet potatoes were destined for the restaurant channel. And yeah, you know, last year's crop, you're getting ready to have a new crop of potatoes this fall. So expectations are you probably need to move them. And how do you move them? At a lower price.
HIRSCH: So there you go. That's the first story. The effects of the pandemic have reduced demand for certain types of food - in particular, some of the foods that people tend to eat on Thanksgiving.
GARCIA: And then there's the second, the longer-term story to tell. And this is actually an easy one to explain. Because of new technologies and innovations in how to produce food over the last few decades, farmers have simply become better at it, more efficient, which means that they can sell the food for cheaper.
NEWTON: You've got to recognize that we benefit from a high quality and very affordable food supply. You know, we spend a small percentage of our disposable income on food. Food in the United States is very affordable.
GARCIA: Now, John and the Farm Bureau, of course, represent farmers. So he's boosting his peeps there a little bit. But the general story, that the agricultural sector in the U.S. has become more and more efficient over time, is definitely true.
HIRSCH: Finally, John very much recognizes the difficult truth behind this year's Thanksgiving dinner survey, which is that the decline in demand for certain kinds of traditional Thanksgiving foods is being driven by a tragedy, that it's almost certainly because the pandemic is keeping families apart, he says.
NEWTON: Let's not overlook, you know, and I don't want to get - you know, let's not overlook the fact that some people have one less person sitting at the dinner table with them this Thanksgiving. This virus has touched everybody. It's touched my family. I'm sure it's probably touched you. So it is going to make Thanksgiving a little bit different this year.
GARCIA: I'm sorry to hear that, man. Is everybody in your family OK?
NEWTON: My grandmother is built like a tank, so she's, you know, 87 years old. You know, she beat this. She's beat a broken hip. She's beat diabetes. She's beat cancer. So this is just another gold star on her shoulder.
GARCIA: And that very sweet note seems like a good place to close, with a shoutout to John's indestructible Sherman tank of a grandmother, and our own wishes for a happy, and above all, a safe and healthy Thanksgiving for our listeners, especially for those who've had a tough 2020. We hope the holidays will be restful and restorative for you.
This episode of THE INDICATOR was produced by Jamila Huxtable and fact-checked by Sean Saldana. THE INDICATOR is edited, and in this case, co-hosted also by Paddy Hirsch. And it is a production of NPR.
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