Dive Brief:
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The average cost for a Fourth of July cookout for 10 people this year is $55.07, or about $5.51 per person, according to the American Farm Bureau Federation. That's down about 1% from the average cost of $55.70 last year.
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The group calculated the holiday cookout price based on a meal consisting of hot dogs and buns, cheeseburgers and buns, pork spare ribs, deli potato salad, baked beans, corn chips, lemonade, chocolate milk, ketchup, mustard and watermelon. Ninety-six volunteers from 28 states collected the retail pricing information for the informal survey.
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John Newton, the federation's director of market intelligence, noted that meat and dairy prices have dropped due to higher production, while tighter cheese supplies bumped prices slightly higher. He said U.S. farmers net about 7.8 cents of every food marketing dollar, so their share of the Fourth of July cookout meal would be $8.15.
Dive Insight:
Of the 14 items on the federation's Fourth of July cookout menu, eight increased in price this year, while six went down. In order of percentage price increase, the eight were mustard (7%), lemonade (6%), deli potato salad (5%), hog dogs (3%), baked beans (2%), ketchup (2%), American cheese (2%) and corn chips (0.3%). The six, in order of percentage price decrease, were pork spare ribs (-6%), hot dog buns (-5%), hamburger buns (-5%), ground round (-3%), chocolate milk (-3%) and watermelon (-3%).
Record production levels for beef, pork and dairy have pushed down retail prices for U.S. consumers, according to the federation. It's not clear why hot dog and hamburger buns have dropped in price, although they may be on sale due to the frequency of summer barbecues. Mustard prices have been rising due to increased demand and poor yields.
For retailers already facing tight margins on a lot of products, it might be tempting to stock more of the items with rising prices and forgo some with prices sinking due to over-production, drought or poor yields. But there are traditional Fourth of July foods shoppers will be looking for, so grocers also need to be cognizant of those and stock accordingly.
Hamburgers and cheeseburgers are seeing increasing competition from plant-based products such as the Impossible Burger and the Beyond Burger. However, since prices for those meatless items are typically higher than for beef burgers, it doesn't seem likely that consumers who aren't vegans or vegetarians will buy meatless burgers for their Fourth of July cookout.
It's hard to tell whether falling prices for some food items are a long-term trend for manufacturers, retailers and consumers since there are many variables at play when it comes to supply and demand. In general, though, Americans have it pretty good when it comes to retail food prices. According to the Bureau of Labor Statistics, the consumer price index for food was flat in May after a 0.3% increase in April. The index for food at home dropped 0.2% in May, while the index for food away from home rose 0.3% in May after dropping 0.2% in April.