Fire up the grill this Fourth of July, because low food prices are still favoring the consumer, according to recent reports.
For the nearly 90% of Americans planning to celebrate Independence Day this year, the cost of a cookout will be little changed from last year. The average cost of a summer barbecue rose by just over a dime in 2019, according to an American Farm Bureau Federation (AFBF) report published Monday.
The average price of meal for 10 people – including hot dogs, cheeseburgers, pork spare ribs, potato salad, chips, baked beans, lemonade and watermelon – rose 11 cents to $52.80 this year. That’s up less than 1% from last year, and averages out to less than $6 per person, the AFBF said.
To compile the data, the AFBF sent 114 members out across 34 states to check regularly-priced cookout foods at local grocery stores.
The muted price changes aren’t surprising when looking at agricultural market trends, with underlying prices for many farm goods at relative lows this year amid booming production.
“Most consumers probably aren’t aware of this, but the farm country is in pretty tough shape,” AFBF chief economist John Newton told Yahoo Finance. “We’ve seen commodity prices fall from their highs in 2014, due to a variety of factors. But most notably, really great weather across the U.S. is leading to record production of many crops and livestock. And that’s led to lower prices for the consumers.”
In late June – just ahead of the July 4th festivities – the American hog herd hit its highest level since 1943, and wholesale prices hit their lowest level at that point in the year in a decade, according to a Bloomberg report. Meanwhile, live cattle futures declined about 16% for the year-to-date through Tuesday, based on CME Group data.
Wholesale prices don’t always perfectly correlate with retail trends. But recently, similar downtrends have materialized in retail food prices among July 4th staples.
While retail beef and pork prices have edged up slightly in the last 12 months, both have fallen over the past several years, according to data from the Bureau of Labor Statistics. Average retail prices for ground beef – an input for the burgers that typically comprise Fourth of July fare – were $3.82 per pound as of May, down more than 7.5% from the same month in 2015.
‘Ample supply’
The AFBF’s data squares up with pricing trends reflected in the Labor Department’s consumer price index, which has seen muted increases over the past year even when including more volatile food price fluctuations.
Declines in prices for many July 4th staples have come as a result of supply-side effects, Harry Kaiser, professor at Cornell’s Charles H. Dyson School of Applied Economics and Management, told Yahoo Finance.
“Supply is high at the farm level – and it’s not like demand is dropping off,” he said.
Demand has held up strongly for barbecue staples around the Fourth of July holiday, and not just in 2019. During the week of July 4th, 2018, American consumers purchased $631 million worth of fresh beef, an increase of 2.1% year-over-year, according to Nielsen data. Consumer spending on hot dogs during the holiday week also rose by low-single-digit percentages last year.
That said, tepidity in food price changes this year won’t continue forever – and prices could be set to rise as soon as later this year, Kaiser said. Exceptionally wet spring weather hit a swathe of agricultural hot spots in the U.S. earlier this year, preventing many farmers from getting out into the field and putting crops into the ground. The supply pressure would impact both crop and livestock prices, given animal feed is necessary for sustaining herds.
“I’m pretty confident that we’re going to see prices strengthening,” Kaiser said.
But any of those pricing impacts wouldn’t materialize until later this year and into next, Kaiser added.
“Right now, there’s ample supply out there,” he said. “That’s why the consumer is going to have an affordable Fourth of July cookout.”
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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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