Falling Food Prices Trim Turkey Day Costs

BOSTON (TheStreet) -- Consumers filling their stomachs on Thanksgiving might leave the table with more money in their pockets, as falling commodity prices shrink the costs of holiday staples.

Retail prices for apples, potatoes, and corn have fallen as much as 25% in the past year, according to the U.S. Agriculture Department. Wholesale prices for chilled and frozen turkeys have dropped 9.2% in October from a year earlier, while those for wheat declined 31%.

Soft commodities, such as fruits and vegetables, have been losing value this year as a rainy growing season led to large harvests, and a strengthening dollar made these goods less appealing to investors. And domestic turkey production is down, but falling exports have created a glut of birds in the U.S.

While recession-weary consumers will welcome lower food costs, investors might also stand to gain. Falling wholesale costs are helping some food companies and retailers prosper even as customers cut spending.

Wal-Mart (WMT Quote) is looking to get into the T-Day profits. The world's largest retailer announced last week that it will offer a "turkey dinner for eight" for $20. It will include vegetables, rolls and turkeys priced at 40 cents a pound, down from $1.19 last year.

Last week, Sara Lee(SLE Quote) reported a 23% increase in its fiscal first-quarter profits. Its earnings of $284 million, 41 cents per share, jumped from the $230 million reported for the same quarter last year despite a 7% decrease in revenue ($2.59 billion). Lower commodity costs helped bridge the gap caused by slowed sales.