With Thanksgiving just around the corner, now is as good a time as any to take a look at turkey prices and see how the the price of the centerpiece of the holiday meal has changed over time.
Using monthly data from the Bureau of Labor Statistics (maintained by the LMIC) from January 1980 to October 2016, here is the trend in whole, frozen turkey prices. In inflation adjusted terms, turkey prices fell by half from 1980 to 2008. Then, along with other agricultural commodities, turkey prices rose and then fell again. Still, prices today are about 40% lower than they were in the 1980s in inflation adjusted terms. The nationwide price of turkey in October 2016 (the last reported by the BLS) was $1.69/lb.
An interesting feature of the data in the graph above is the apparent cyclical nature of turkey prices within a year. This raises the question: are you paying more or less for turkey when Thanksgiving rolls around? Looking at the monthly data since 1980, the answer might be a bit surprising: November tends to be the month with lowest prices for turkey. Prices of turkey in November tend to be about 5% lower than the average annual price. Moreover, October tends to be the month with the highest price for turkey (about 3-4% higher priced than the annual average price). Thus, the largest price swing happens from October to November with prices typically falling about 8% just prior to Thanksgiving.
This pattern of price fluctuation might be a bit surprising. Isn't it the case that demand for turkey is highest in November? If so, shouldn't a demand increase drive up prices? Yes, but producers also know when demand spikes occur and they can plan production and storage accordingly (this is a fairly highly integrated industry) so that there is ample supply during this time. Additionally, research on this topic has suggested that retailers might use turkeys as so-called "loss leaders". Knowing that many consumers will be shopping for turkeys, retailers will offer specials and discounts on the item everyone is looking for to get them in the door so that they'll buy all the other things it takes to make a Thanksgiving meal.
Finally, it's instructive to look at proteins more generally. How pricey is turkey relative to the other big ticket meat items that families might put on their dinner plate? If turkey got too expensive, you can substitute toward another tasty main course. (Growing up, my family was never a big fan of turkey, so we often opted for steaks or ham).
Here are the relative price trends since January 2000 (again based on BLS prices). As of last month, beef steaks are about 4.4 times more expensive (on a $/lb basis) than turkey, and beef roasts are about 3.1 times more expensive than turkey. Another way to say this is that for the same fixed budget, one could buy four times as much turkey as they could beef steak (no minor issue if a dozen folks are headed to your house). Pork chops and ham are both about 2.3 times the price of turkey. That said, beef and pork are more affordable relative to turkey than they were last year at this time. From October 2015 to October 2016, the prices of the beef and pork products investigated here have fallen 11.8 to 16.6% relative to the price of turkey. Whole chickens are about the same price as turkeys, though slightly cheaper on per-pound basis.
Now that you know the prices, figure out how many pounds you need to feed the gathering, how much you can spend, and buy whatever it is that brings you and your family the greatest joy. Happy Thanksgiving!