Read the latest issue of The Dairy Bar, a bi-weekly report from IDFA partner Ever.Ag. The Dairy Bar features spotlight data, key policy updates, and a one-minute video that covers timely topics for the dairy industry.
The Dairy Bar: Thanksgiving Holiday Food Costs; Pizza Chains and Cheese Consumption; and Milk Output in a Minute!
Quick Bites: Pizza Chains and Cheese Consumption
- Menu inflation is hitting pizza chain sales, with knock-on effects for cheese consumption. Among the largest U.S.-based concepts, Domino’s fared best, with third quarter domestic same-store sales up 3.0% and global sales up 0.8%. However, revenue fell below expectations.
- Weaker performance at Pizza Hut locations helped drag down overall earnings at parent company Yum! Brands. Pizza Hut’s U.S. same-store sales eased 1%, while international sales fell 6%. Company officials plan to ramp up discounts in the coming months to lure back diners.
- Papa John’s cited “a very challenging consumer environment” in its third quarter earnings, reporting a nearly 6% drop in North American same-store sales, while global sales declined 3%.
- A slowdown in takeout pizza orders likely weighs on domestic cheese usage, even if consumers are replacing restaurant pies with frozen pizzas. Consumption is already showing signs of slowing, totaling 3.4 billion pounds in the third quarter, up 1.2% compared to the same period last year.
Today's Special
- Thanksgiving food costs are expected to decline this year, and more Americans are digging in. Data by the American Farm Bureau Federation pegs the bill for a traditional feast for 10 people at $58.08, down 5% from last year, though 19% higher than five years ago. Expana’s Thanksgiving Dinner Index also decreased 3.3% on the year in October.
- Whether baked, roasted or fried, consumers are spending less on Thanksgiving entrees. Though cases of avian influenza continue to impact turkey production, Expana reported prices for 16-pound frozen Toms are roughly 14% lower versus last year. AFBF pegged 16-pound turkey costs at $25.67, down 6% year-over-year and comprising about 44% of the total Thanksgiving meal. Those who opt for pork can expect to pay about the same as last year. Bone-in ham prices averaged 84 cents per pound last month, unchanged from 2023, per Expana.
- The costs for sides, meanwhile, are more variable. Lovers of mashed potatoes and gravy are likely to spend a bit more, as pullbacks in production have pushed potato prices up nearly 8% this year. Prices also rose for cranberries (+12%), cube stuffing (+8%) and dinner rolls (+8%). On the other hand, favorable harvests resulted in lower costs for peas (-8%), carrots (-5%) and sweet potatoes (-2%).
- As with dessert tastes, pie and baking costs may also vary. Pie lovers can expect to pay 9% more for pecans this year, but 6% less for pumpkin mix and 3% less for pie shells. Those with sweet teeth can also expect price tags for sugar and vanilla to decrease 14% and 42%, respectively.
- Thanksgiving is a big holiday for dairy, particularly butter and whipped toppings. In 2023, retail butter sales averaged 36 million pounds during the week before and the week of Thanksgiving, more than double historical volumes. Butter buyers can plan to pay a bit more this year, with retail prices up 11% year-over-year in October. But reports point to heavy promotional activity during the holiday week. Tighter cream supplies and higher multiples earlier this year are also likely to make whipping cream more expensive, with prices expected to rise nearly 5% on the year.
- Regardless of cost, most Americans plan to celebrate the holiday this year. A study by Numerator showed 9 out of 10 consumers plan to observe Thanksgiving, with 89% of those respondents set to buy food.