Good news for Turkey gobblers: Thanksgiving dinner is bound to be cheaper this year.
And we have a strong dollar to thank for it.
According to the Consumer Price Index's October report, grocery prices have been falling steadily for the last six months, leading to a decrease in the cost of all "food-at-home" products by 2.3 percent from this same time last year. That, according to the American Farm Bureau Federation, means the cost of providing a 10-person, 12-item Thanksgiving feast had dropped to $49.87, down from $50.11 last year; not quite as marked a decrease as total food costs, but a decrease nonetheless.
On the surface, the cheaper cost of Thanksgiving dinner this year is merely driven by supply and demand: lower turkey and milk prices coupled with a surplus in the market of both. According to Food & Wine magazine:
The Farm Bureau’s listed price of a 16-pound turkey was down 30 cents this year, dropping to $22.74. Newton also specifically called out two other items from the AFBF’s index. “Due to a significant expansion in global milk production, prices fell to the lowest levels since 2009, leading to lower retail milk and dairy product prices,” he said. “Additionally, this year's pumpkin prices are slightly lower following the production decline and higher prices seen in 2015.” The two biggest increases on the index (at least purely in dollar value) were rolls and pie shells, meaning that the carbs are doing more than attacking your waistline this year: They’re also taking 33 cents more in total from your wallet.
But dig a little deeper and it becomes clear that the surplus in the market, as USA Today reported two months ago, is because demand for food on the overseas market has slowed.
The reason: America keeps producing and stockpiling food even while the demand for it overseas tapers off. This is especially true in places like China, the network noted, where the increasing strength of the U.S. dollar makes American goods more expensive.
A strong dollar isn't always the best news for companies that trade internationally since it makes American products more expensive and less attractive overseas. But it does make for a cheaper and more bountiful Thanksgiving meal for middle- and low-income families stateside.