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Thanksgiving is getting more expensive. The WSJ’s Ian Berry reports that wholesale turkey prices are up 26%, on the East Coast, compared to last year. That’s far above the modest increases in other food prices.
As Ben Bernanke noted in his speech at the New York Economic Club yesterday, for most consumers, short-term commodity price spikes don’t translate into higher grocery bills. Despite “the increase in farm prices brought on by this summer's drought”, he said consumer price increases have averaged “almost exactly 2%”. Turkey is an exception, Berry says, thanks to the peculiarities of a seasonal, capital-intensive industry loathe to expand production in the aftermath of the 2008 recession.
The problem for those of us sitting down for a family meal tomorrow is that there isn’t what economists would term a substitute good for turkey. The solution, Matt Yglesias argues, is to call your local turkey sellers’ bluff and wait until the last minute to buy. That might make you nervous, but the shopkeeper is even more stressed by how little he can charge for a whole turkey the day after Thanksgiving.
At least neither of you has to worry about whether you’ll eat a Thanksgiving dinner. That’s not true for all Americans: Reuters’ Lisa Baertlein reports that those rising food commodity prices are hurting food banks’ inventories.