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Thanksgiving, Inflation and Supply Chains

November 14, 2022 Kevin Baxter

Thanksgiving Inflation

While the star of the show at Thanksgiving is undoubtedly the turkey, there are other components of the holiday - both on and around the table - that can be impacted by inflation and issues with supply chains. We had the turkey talk a few days ago - no major shortage but certainly pricier for the tl;dr crowd - so let's dive into some of the other key staples of Thanksgiving 2022 in terms of inflation and supply chain impacts. Starting at the dinner table, sides are just as important if not moreso to many feast participants, so how are they looking this year? No matter how you prepare them, potatoes are a pretty vital Thanksgiving ingredient, however, inflation has them up 17.5% over last year. Another typical side dish is corn, which is up 11%. If you supplement your turkey (or replace it) with ham, that's up about 8%. As far as other ingredients, butter is up a whopping 34% with other dairy up 22%, flour and baking mixes are up 24%, canned fruits (here's looking at you, cranberry sauce) are up 19% and frozen vegetables are up 17%. Some slight solace can be found on the beverage side, as wine is reportedly up under 3% and beer under 5%, so stocking up on adult drinks shouldn't be as painful. But dessert has not been spared, up an average of 20% this year. For those hosting yet looking to save, some recommend having friends bring over the pricier stuff to spread out the cost. And another recommendation to save money - or at least time and energy -  eat out, as restaurant prices have risen slower than inflation and may be comparable to the cost of eating at home without the hassle. Inflation is a catch-all explanation for the cost increases year to year, and one of the drivers can be complications of supply chains, whether they be higher shipping costs, transportation delays or issues with raw goods availability among others. In the case of these food items, while shipping costs have been coming down (and freight movement problems with them), there are residual effects especially for those products that source ingredients from overseas. Also at issue is the ongoing invasion of Ukraine which has impacted grain supplies and is at least partially responsible for the jump in oil prices that continues affecting suppliers and consumers alike. 

What is the Thanksgiving transportation outlook?

Moving freight from a shipper's perspective has generally improved with capacity up and prices down across the board from pandemic-related peaks, making the Thanksgiving transportation fairly positive. However, since another piece of the Thanksgiving transportation pie is getting people together, the picture is not all rosy. Airfares are up over 40%, and as mentioned earlier, gas prices - while down from their peak - are still on average $0.36 more per gallon than this time last year. On the positive side, as the automotive supply chain has improved, so have rental car prices receded, down 3.5% from November 2021. Are there any looming complications for freight and/or human transport? It doesn't appear so, though the railroad industry bears watching in the days following the Thanksgiving holiday. The threat of a strike is very real with two of 12 labor unions voting down a new contract - but both have agreed to extend a cooling off period to at least Dec. 4, meaning freight and people using trains for transportation will continue unabated through Thanksgiving. However, if the remaining railroad unions also fail to ratify the agreement and absent additional concessions related to paid sick time, a strike could occur in December without Congressional intervention. 

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