However, there is one notable exception to the rising cost rule. While you pay 21% more for turkey than you did 12 months ago and a whopping 69% more for diced stuffing, the pop of color from fresh cranberries is 14% cheaper.
The most encouraging thing about this change is that nothing remarkable is happening. Far from being an exceptional season where optimal weather conditions helped produce record crops, last year was just… mediocre.
Cranberries evolved in frigid swamps, so love cold winters that kill off rival plants. They also like a lot of rain to grow a fruit so well adapted to the moisture that farmers harvest them by flooding the fields to make hollow, buoyant berries float off the vine.
That does not correspond to the circumstances of the past year. The 2021-2022 winter was unusually warm in Massachusetts and Oregon and just normal in Wisconsin, the top three growing states. Droughts are still prevalent in most of the US, increasing as you move west. The current research for the 2022 crop suggests it would still be the smallest since 2010 if last year’s performance wasn’t even weaker:
The market has found other ways to adapt. Exports of preserved berries have been about 10 million pounds below normal levels over the past 12 months, according to data from the US Department of Agriculture, making more product available for the domestic market. Imports of frozen and prepared fruit rose by a further £10 million in the nine months to September, about a quarter above the four-year average. (It is still too early to know what will happen to fresh berries, 90% of which are imported in October and November).
Apart from that, however, we are witnessing the normal cycle of agricultural markets shifting with the seasons, as autumn becomes winter and winter becomes spring. If the world is short of petroleum or metals, getting prices back to normal can take years of experience. Oil companies and miners need to change their mind about whether money is better spent rewarding shareholders or developing new stocks. Resources must be discovered and developed. Consumers must find new ways to use a limited product economically. This requires drastic shifts in capital allocation across industries.
In the world of soft commodities it’s a lot easier. As long as farmers do not give up the eternal work of tilling, feeding and harvesting, all it takes to turn a year of scarcity into a year of plenty is a modest improvement in weather conditions. Within a few years, the rebuilding of stocks and the addition of new acres planted when prices were higher will return the market to abundance, driving prices to the bottom.
Cranberries on their own won’t do much for anyone’s hip pocket. They make up just 4% of the cost of items on a Thanksgiving table, where half of the spend this year goes to the bird and the stuffing inside. Still, you can see them as a barometer of the direction the entire agricultural complex is heading as we turn the page on an exceptional three-year La Nina climate cycle that brought drought to the Western Hemisphere and floods to Asia.
Since the spike in the immediate aftermath of the invasion of Ukraine, prices of many agricultural products have fallen. Wheat, cotton, palm oil and timber have all fallen by about a third in the past six months. Rubber, soybeans, maize and lean pigs are between 10% and 20% cheaper. Even crop inputs cost less: U.S. Gulf Coast potash is 32% cheaper and urea is down 10%. Globally, the United Nations Food and Agriculture Organization’s food cost index is likely to fall this month for the first time in more than two years.
Much of the world will continue to struggle with higher food costs for years to come, as the amounts people pay are affected more by the weakness of non-dollar currencies and local supply chains than by the price of commodity futures traded in Chicago and London. Last year’s food price shock has shown us once again how vulnerable our agricultural systems are to an increasingly chaotic climate.
Still, the cheaper cranberries on your table are a little reminder of an old lesson: even in the depths of desperation, a decent harvest can be the first sign of a brighter future. That is something we can all be thankful for.
More from Bloomberg’s opinion:
• A truly unfathomable darkness in the heart of Thanksgiving: Amanda Little
• Which food crisis? Deflation is now on the menu: Javier Blas
• Food prices are falling. Why is there still a hunger crisis?: David Fickling
This column does not necessarily reflect the views of the editors or Bloomberg LP and its owners.
David Fickling is a Bloomberg Opinion columnist on energy and resources. He previously worked for Bloomberg News, the Wall Street Journal and the Financial Times.
More stories like this are available at bloomberg.com/opinion