Prices fall as economy slows

By Matt Lindner
Staff Writer

People will be pleasantly surprised when they head to the supermarket to shop for food items for their annual Thanksgiving feasts.

Food prices for Thanksgiving staples such as pumpkins and turkey are running at prices significantly lower this year than last year. Turkey in particular is selling for 6 to 8 cents per pound below last year's prices.

Also, pumpkin production has expanded this year as it has annually for the past two decades, which has helped decrease the prices of pumpkins.

Joseph Uhl, professor of agricultural economics, attributes this to a greater supply of turkeys than there is demand.

"There are plenty of whole turkeys in stock for the upcoming holiday season," said Uhl, "For one reason or another, people just haven't been consuming as much turkey recently."

However, while prices for turkey and pumpkins are decreasing, the prices for other Thanksgiving staples such as cranberries and sweet potatoes have jumped drastically over the last year. Prices on those items are running between 9 to 12 percent higher than they were last year.

Other items that are seeing a price jump include beef, pork, sugar, grapes, bananas and peaches. Uhl attributes the jump in prices to a combination of factors involving both the consumer and the farmers.

"Last year not as many cranberries and sweet potatoes were consumed, so conversely farmers decided to harvest less acreage of both," said Uhl. "The smaller the demand for these items is, the less the farmers will provide in order to maximize profit. Also, the costs of marketing, energy, transportation and packaging of these items has increased, which will also lead to more expense to the consumer."

In addition to the increase in prices, the slowing economy has also had an effect on food shopping and the consumption of food. Ray Kavanaugh, head of the department of hospitality and tourism management, said the effects of the slowing economy are being felt throughout the restaurant and tourism industry.

"While travel is still down in the wake of the Sept. 11 attacks, restaurants have been consistently strong," said Kavanaugh. "However, not all of the decrease in business is due to the attacks. The economy was slowing down before the attacks occurred and, as a result, people were starting to evaluate how they spend their money and what they are spending it on."

Even though business is down in the restaurant and tourism industry, Kavanaugh said restaurant and hotel chains are coming up with programs to help counter the slowdown.

"What we're seeing now is that many hotels are offering special rates and incentive programs in order to help promote travel," said Kavanaugh. "While the cost of food is going up, restaurant chains are dealing with this effectively. One of the ways they are doing this is by charging less money per meal and then not serving as much food on the plate. By doing this, they are able to maximize their profits and satisfy the consumer at the same time."

Holiday travel effects are being felt on Purdue's campus as well. Jerry Day, manager of the Union Club Hotel, said business has decreased as a result of people's fears of traveling.

"Overall, we've seen a decrease of about 10 percent in our normal business because people just aren't doing as much optional travel as they were before," said Day. "We are running a special for the Thanksgiving holiday for faculty and students that have family coming into town in hopes of bringing in more business. While we've had a few bites on it so far, it's not what it would have been at this time last year."

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