US Fourth of July barbecue to hit record high prices, finds Rabobank
27 Jun 2024 --- The cost of hosting a 10-person barbeque on the Fourth of July this year will hit US$99 — the highest on record. Beef, beer, soda and lettuce will make up 64% of the total cost, according to Rabobank figures.
Rabobank’s yearly BBQ Index, which measures the cost of staple ingredients for a Fourth of July barbeque, shows an inflation gain of 32% since 2019 for the annual celebration.
The bank's findings reveal particularly interesting retail and consumer behavior regarding certain products, such as beef, where prices have hit unprecedented levels in the US. In an effort to adapt to prolonged food inflation, many retailers are prepared to take a loss on beef sales as they know customers may be willing to buy other items.
Hitting historical highs
Lance Zimmerman, senior beef analyst at Rabobank, says: “Beef prices may be at historical highs, but many store owners are willing to take a loss by putting various cuts of meat on sale knowing shoppers will fill their carts with other menu items — beer, burgers, hot dogs, sides and salads. They want to boost foot traffic and win loyal customers.”
In its index, the bank highlights tighter US beef supplies pushing the market higher. Severe drought and challenging business conditions have forced US cow-calf producers to liquidate cows over the last five years.
It adds: “Higher US prices have caused beef exports to shrink, but domestic beef demand has held up well. Trading down to different cuts and grades of beef — like switching from steaks to burgers — can offset the pinch consumers are feeling from inflation and economic hardship.”
Despite the price surge for beef, Zimmerman believes the quality of meat available has never been better. ”In the past 20 years, we’ve seen the availability of USDA prime and choice meat increase 60% as improved cattle management has created more marbling. Those fatty flecks pack a lot of tenderness and flavor while making it easier to grill. Even if you overcook quality meats a little, they won’t turn into shoe leather,” he says.
Demand in other areas
In poultry, demand for chicken has improved as consumers seek lower cost, high value proteins, with rising beef prices leading to many restaurants offering more chicken options on their menus.
Retail stores are also putting more chicken on sale. According to Rabobank, breast meat has returned to the top of the circular, while lower-cost thigh meat and legs are seen as budget-friendly protein alternatives.
”In tough times, chicken maintains its value,” says Christine McCracken, senior poultry analyst at Rabobank. “Right now, dark meat is gaining popularity. Consumers are finding that thigh meat can be just as tasty as breast meat — and it’s less challenging to grill.”
Elsewhere in its findings, non-alcoholic beverages have become a new revenue stream for brewers, with a 31% rise in sales across non-alcoholic adult drinks last year.
