Thanksgiving dinner is going to be more expensive this year, thanks to inflation – CNBC

Corn muffin mix is stocked and on display for Thanksgiving dinner items at a Pete's Fresh Market Tuesday, Nov. 2, 2021, in Glen Ellyn, Illinois.

John J. Kim | Chicago Tribune | Tribune News Service | Getty Images

There's going to be an extra guest at Thanksgiving dinner this year, making it more expensive than ever.

It's inflation.

In October, the consumer price index a basket of goods rose 6.2% from a year ago and hit a 30-year high, according to data from the U.S. Bureau of Labor statistics.

And under those headline numbers, food costs rose 5.3% on the year, with the largest gains driven by price increases of meat, poultry, fish and eggs.

"Inflation remains stubbornly high, to the surprise of many that expected prices to come back to earth sooner," said Ryan Detrick, chief market strategist at LPL Financial. "The truth is you can't shut down a $20 trillion economy and not feel some bumps as it restarts, but we are hopeful the supply chain issues will resolve over the coming quarters and inflation should calm down as well."

The USDA is also projecting that food-at-home costs will be up 2.5% to 3.5% for the entirety of 2021.

"I wouldn't be surprised if we see the Thanksgiving basket up about that percent," said Veronica Nigh, senior economist at the American Farm Bureau Federation.

The expected increase will be a shock to many households already feeling the pressure of higher prices. In comparison, in 2020, the average price of Thanksgiving dinner declined 4% from the previous year to $46.90, or about $5 per person, according to the Farm Bureau.

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There are a few reasons nearly all the ingredients seen in a Thanksgiving dinner will be more expensive this year.

Supply chain issues have persisted throughout the pandemic and have raised costs. This may contribute to limited supply, as some foods take longer to be delivered.

There are other deficits that may be pushing prices up, as well. Turkeys, which are generally the most expensive item in a Thanksgiving feast, are in shorter supply this year than they were last year.

"It's probably the lowest bird inventory we've had for perhaps 10, 11 years," said Curt Covington, senior director of institutional credit at AgAmerica.

Turkeys between 8 pounds and 16 pounds cost 25 cents per pound more than they did a year ago, while prices for birds between 16 pounds and 24 pounds are about 21 cents more expensive, according to an Oct. 29 report from the Department of Agriculture.

Other costs associated with Thanksgiving dinner have also gone up gas prices have increased nearly 50% on the year, appliances are 6.6% more costly and even things such as cookware and tableware are more expensive.

"Just the cost of metal to put cranberries into a tin can has gone up," said Covington. "It's across the board and it's going to take the supply chain well past Thanksgiving and Christmas to get back to normal."

There are a few things that consumers can do to keep their Thanksgiving meal as inexpensive as possible, according to experts.

1. Start early: First, start shopping for your dinner as soon as possible, so you aren't caught off guard by last-minute price hikes.

Many consumers have taken note of increased prices and have started purchasing some items for the November feast. Some 63% of consumers expect rising food costs to make Thanksgiving more expensive, according to a recent survey by FinanceBuzz, a financial independence site.

The same survey showed that consumers are planning to combat rising costs by shopping sales, using coupons or cutting back on food or guests.

Others have already started stocking up on non-perishables some 35% of those surveyed by Shopkick said they'd begun their Thanksgiving shopping already to get ahead of product shortages and last-minute price hikes.

2. Look for deals: Starting early also gives consumers more time to look for deals, which will be especially important to those on a budget this year.

Scan for sales on any items you can stock up on ahead of time and check prices at multiple grocery stores, including discount merchants such as Aldi, Lidl and WinCo foods, said Brittain Ladd, a global strategy and supply chain consultant.

Buying frozen foods is also generally less expensive than fresh, so people can look for deals in the freezer aisle.

Consumers should also consider shops that offer Thanksgiving deals, such as throwing in a free turkey if you buy most of your ingredients there.

3. Share costs: People may also be looking to have larger Thanksgiving gatherings than last year due to Covid. Having more friends and family over may present an opportunity to keep costs down instead of the host being solely responsible for the meal, you could split costs across guests.

"It's really important to have conversations with your family and your friends," said Kaitlin Walsh-Epstein, senior vice president of marketing at Laurel Road. "Ask everybody to bring a part of the meal."

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Thanksgiving dinner is going to be more expensive this year, thanks to inflation - CNBC