Dive Brief:
- The cost of a Fourth of July cookout will be more expensive this summer than last year, according to a new report from Wells Fargo’s Agri-Food Institute. The price of various holiday staple food items that will cost more at grocery stores than last year include: sirloin steak (2.9% higher), processed cheese (10% higher), bread (22% higher) and ice cream (9% higher).
- The banking giant suggests consumers opt for hamburgers, as ground beef prices are less than a percent more expensive than last year, and chicken breasts, which are roughly 2% lower than they were in July 2022.
- The Wells Fargo report comes after food inflation has cooled in recent months, which indicates that consumers will continue to heavily weigh prices in their food purchasing decisions.
Dive Insight:
Consumers have become used to inflation interfering with their holiday plans ever since grocery prices began ascending in early 2022. Last year, a Fourth of July cookout cost consumers roughly 17% more than in 2021, an American Farm Bureau Federation survey found.
In this year’s annual report, Wells Fargo’s Chief Agricultural Economist Michael Swanson said consumers face higher costs of cookout items in a variety of categories, from meat and poultry to desserts, beverages and snacks. The cost of potato chips, up 15% year-over-year, has been impacted by the climate in growing regions — which is simultaneously driving up the cost of dips by 9%, according to the report.
“Last year’s drought in key growing regions of Idaho and the Dakotas sent potato prices soaring, and this eventually ends up being the consumer’s problem,” Swanson said.
Soft drink producers are passing along high labor and packaging costs to consumers, the report said. When purchasing beverages like soda, Swanson recommended consumers buy a 2-liter bottle as opposed to a pack of 12-ounce soft drinks, which cost 14% more compared to 2022.
When it comes to alcoholic beverages, Wells Fargo said wine may be an affordable option this year after seeing no major change in prices compared to beer, which currently costs 9% more year-over-year.
The picture looks brighter for one staple item that has seen high prices this year — eggs. As producers have worked to rebuild their supply of laying flocks after last year’s avian influenza outbreak, prices of the protein are 7% less expensive than they were last year, Wells Fargo found. Egg prices fell 13.8% in May alone, according to the Bureau of Labor Statistics’ Consumer Price Index.
Government officials have expressed a mixed view of the inflation picture for the year ahead. The White House Council of Economic Advisers said in a blog post earlier this month that it expects grocery costs to continue to decline but remain elevated compared to pre-pandemic levels.
