Turkey Will Gobble Up More Of Your Budget This Thanksgiving

For shoppers, this holiday season will bring a lot to be thankful for, with one glaring exception: the price of Thanksgiving dinner's main course.

Turkey prices have flown higher this year because of the avian flu, which decimated turkey flocks. While costs will vary between regions and stores, shoppers may see prices as much as 20 percent higher than in 2014, according to Purdue University agricultural economist Corinne Alexander.

Turkey production is down about 8 percent in the fourth quarter, with large-scale turkey operations hard-hit by the disease outbreak, she said. The U.S. Department of Agriculture is predicting that wholesale prices for Eastern market whole turkey will be as high as $1.37 per pound during the last three months of 2015, or about one-fifth higher than a year earlier. But discounts may still be found, given that retailers often use turkeys as "loss leaders" to bring shoppers into stores.

The higher turkey cost may have "an impact on families who are facing tight budgets or are on fixed income and not seeing much of an increase in their income," Alexander said. "The good news in the rest of the meal is the only other item that's been impacted is eggs, and most people put eggs in their pumpkin pie, but otherwise the rest of the menu items will be the same or lower priced."

In July, turkey farmer Brad Moline told the Senate Agriculture Committee that he was "living the avian influenza nightmare." The National Turkey Federation earlier this year estimated 8 million turkeys were lost to the illness, an economic loss of $500 million.

As for organic or local turkey, prices are already so much higher than mass-produced turkeys that it's hard to say whether shoppers will see much of a difference, she noted. Those shoppers aren't as price-sensitive as many other Americans, while local turkey farmers probably weren't impacted to the same degree by the avian flu.

Cranberry prices are expected to be about the same as last year, while there's plenty of availability of potatoes and sweet potatoes, which means prices for those Thanksgiving staples are likely to remain stable.

Given that American paychecks are rising faster than the price of food, that's especially good news. Average weekly earnings for non-farm workers at private companies rose 2.5 percent in October, following several months of similar year-over-year wage growth.

"We expect normal food prices to rise at 2.5 percent inflation. This year it's 0.8 percent," she said. "That's very good news for families who are trying to make ends meet."