Talking Turkey

A Thanksgiving look at how efficiency and inflation drove Turkey prices over a century

It’s Thanksgiving week here in the US, and so many shoppers have gone out to their grocery stores in search of a turkey to cook — a purchase they probably only make one or two times per year.

If you’re like me, and pricing and history are two of the things that fascinate you, this might get you thinking about how the cost of buying a turkey has changed over time.

Luckily, there are a number of other people also interested in this question, and so there are multiple sources of data. The US Farm Bureau does an annual survey of Thanksgiving dinner costs. The Bureau of Labor Statistics also provides some historical data. And various sources have compiled historical prices for turkey and other Thanksgiving staples based on newspaper ads running back to the beginning of the 20th century.

Sifting through it all, I compiled a quick historical trend of the price per pound of whole turkeys available to Americans preparing for their Thanksgiving dinners.

As you can see, the price per pound for a whole turkey has increased by just over 3x since 1910. You might at first think that’s a pretty significant increase. But given that we’re talking about 114 years, with a significant amount of inflation which has gone on in the meantime, it’s actually not a very big increase at all.

There are a number of ways that we could calculate an inflation adjusted turkey price. If you simply drop $0.30 into an inflation calculator, it will tell you that $0.30 in 1913 is worth $9.57 today.

But the longer the period you’re trying to bridge, the less useful an inflation calculator is in making specific judgements because the overall structure of how much people pay for different parts of their lives has changed over time. For instance, people spend a much smaller percentage of their income on food today than they did 100 years ago, while the percentage of their income which goes to housing has remained steady or even increased. Clothes have become a smaller expense, while cell phones… Well, in 1910 the average American didn’t even have a landline.

I thought an interesting way to think about how the real cost of a turkey has changed over time would be to think about it in terms of how many hours the median US worker would have to work in order to purchase a Thanksgiving turkey.

While the story is about Christmas rather than Thanksgiving, many might be familiar with Charles Dickens’ story “A Christmas Carol” in which Scrooge is shown the Christmas dinner being prepared by the family of his clerk, Bob Cratchit. Scrooge comments on the small goose that the Cratchit family is eating (in Victorian England, geese were a cheaper option compared to a turkey) and is told that it’s all that Bob Cratchit can afford. As a result, when he has his big change of heart, Scrooge buys a huge prize turkey from his local poulterer and has it delivered to Cratchit.

By comparison, although the total cost of a basket of groceries has grown increasingly painful over the last few years, the cost of the thanksgiving bird itself is not particularly hair-raising. We picked up our turkey this year at Kroger (and didn’t even get the extra digital coupon because of Kroger app problems) for $0.99/lb, which means that a bird able to generously feel 10 people costs just $15.

Wage data from the earliest part of this period is harder to come by, because in the first few decades of the 1900s a large percentage of American workers were employed in agriculture, and the data collected on farm wages was spotty at best. However, I used a St. Louis Federal Reserve paper looking at wages before, during, and after both world wars and used the basic hourly rate for manufacturing as my reference. From 1975 on, data on median personal income is easy to find.

Putting it all together, in 1915 an average manufacturing worker would have made $0.22/hr and a Thanksgiving turkey cost $0.28/lb. That means he would have worked for 19 hours just to buy his family a 15lb Thanksgiving turkey.

By 1946, the cost of a turkey had increased to $0.61/lb, while manufacturing wages were at $0.90/hr, so a worker would have spent ten hours earning his Thanksgiving bird.

This year, median personal income sits at $20.30/hr, and we bought our turkey for $0.99/lb, so that median worker would spend just 45 minutes earning enough money to buy his turkey.

In terms of wages, turkey is cheaper now than it has ever been. It’s worth thinking for a moment about why that is.

One fascinating trend in that turkey price data is that after rising from 1910 to 1946, the price of turkey actually drops from 1946 to 1970. What happened?

That was a period during which the green revolution made many agricultural products cheaper. One of those products was the commercial feed given to farm turkeys. Cheaper turkey feed means it costs less to raise a turkey, which in turn means you can sell the turkey for less.

Just as fertilizers and genetic selection were being applied to crops, selective breeding was also applied to the turkeys themselves. The result is not only that modern turkeys have massive breast muscles (satisfying the broader appeal of white meat) but also that modern turkeys mature faster than their ancestors. Modern commercial turkeys are ready for slaughter just 14-20 weeks after hatching, while heirloom turkey breeds took 23+ weeks to reach the size for slaughter.

It was also a period during which farming was increasingly mechanized. This means that modern turkey raising and harvesting takes fewer man-hours per turkey than traditional methods. Indeed, so powerful have these trends towards automation been that turkeys are cheaper to raise now even though the cost of human labor has gone up nearly 100x over the last 100 years, from $0.22/hr in 1915 to $20/hr today.

This serves as a remind that the prices of a turkey is determined by a host of factors: how much is the feed, how much space is given to the turkey, how much work does it take to raise and slaughter and prepare it, how much does it cost to store the turkey and how long can it be stored without spoiling

All of this is interesting from a historical perspective, but I’d also like to bring it around to a business perspective that can help you in thinking about how to run your business now.

I’m in the middle of working on the company budget for 2025, and if you run a business or work in Finance, you may be in the same boat. One question I’ve seen is: “If economists expect 2.5% inflation next year, how should we take our 2.5% price increase?”

Inflation is a measure of price levels, to the question is not crazy. But imagine if a turkey producer had looked at the inflation rate every year from 1910 to the present and tried to take a price increase equal to inflation. He’d be out there trying to sell turkeys for more than $9/lb right now. And he wouldn’t have any business!

Instead, what a business owner and a pricing leader needs to do is think:

1. Are my costs changing in a way that affects all of my competitors as well as me? If so, this is going to create a general market pressure on prices. If you change your prices in a way which reflects the general movement of costs affecting both you and your competitors, it’s likely your competitors will move with you and you will continue to compete for business on the merits while maintaining the same relative price position.

2. Do I have savings (or costs) due to efficiency, technology, etc. which would potentially allow me to change my price relative to my competitor in a way that would increase my market share? For instance, if you have invested in some technology which makes your manufacturing process (whether it’s turkey feeding or widget making) more efficient in terms of labor than your competitors, you might be able to increase your market share by undercutting your competitor on price.

3. Have I improved my product or my service in a way which allows me to increase my price relative to my competitor because I am now delivering more value?

Over the course of 100+ years, it’s farmers and other participants in the turkey supply chain asking themselves those kinds of questions each year which have on the one hand provided us with turkey which in unprecedentedly cheap in terms of real wages, and also a flowering of specialty options who would like to buy (and pay a premium for) a sustainably raised turkey that has never seen the inside of an industrial slaughter house.

2.5% inflation is a general measure of prices in the wider economy, but it’s possible that your particular market will see a larger increase than that or a smaller one. It’s always essential to be guided by your business and your market, not by general economic indicators on the news.

Whatever sort of food graces your table this Thanksgiving, thanks for reading this newsletter. One of the things that I am grateful for is the growing community of people interesting in reading what I write about pricing and business.