Here's why your July 4th barbecue may be pricier this year

27/06/2024

Miodrag Ignjatovic | E+ | Getty Images

Americans firing up their grills for Fourth of July celebrations will likely pay more for some traditional barbecue staples this year.

That's largely due to inflationary pressures in the U.S. economy and supply shocks related to specific foods like beef and lemons, according to agricultural economists.

The average cookout for 10 people will cost $71.22 this year, up 5% from 2023 and about 30% five years ago, according to an American Farm Bureau Federation estimate.

The group analyzed prices for ground beef, chicken breast, pork chops, cheese, hamburger buns, homemade potato salad, potato chips, chocolate chip cookies, ice cream, strawberries, pork and beans, and lemonade:

2 pounds of ground beef, $12.77 (+11% vs. 2023)
2 pounds of chicken breasts, $7.83 (-4%)
3 pounds of pork chops, $15.49 (+8%)
1 pound of cheese, $3.57 (+1%)
1 package of hamburger buns, $2.41 (+7%)
2½ pounds of homemade potato salad, $3.32 (-4%)
32 ounces of pork and beans, $2.49 (+2%)
16 ounces of potato chips, $4.90 (+8%)
13-ounce package of chocolate chip cookies, $3.99 (+2%)
½ gallon of ice cream, $5.65 (+7%)
2 pints of strawberries, $4.61 (+1%)
2½ quarts of lemonade, $4.19 (+12%)

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Overall food inflation has fallen dramatically, though.

Grocery prices are rising at a rate of 1% a year — their rough pre-pandemic pace — after having topped out at 13.5% in August 2022.

The worst of food inflation is "in the rearview mirror," Wells Fargo agricultural economists wrote in a recent analysis of Fourth of July food prices.

While food generally won't be cheaper at the grocery store, "you're not seeing these huge jumps in prices you saw in the last year or two," Courtney Schmidt, a sector manager within Wells Fargo's Agri-Food Institute and report co-author, told CNBC.

That said, consumers have seen prices fall for some specific barbecue items like chicken breast and potatoes, the Farm Bureau said.

Why beef and lemon prices are rising

An employee examines a side of beef inside a freezer at a butcher shop in Louisville, Kentucky, in August 2022.

Luke Sharrett/Bloomberg via Getty Images

Ground beef and lemonade are the items for which Americans will see the biggest price increases for an Independence Day barbecue, according to Bernt Nelson, a Farm Bureau economist.

Two pounds of ground beef cost $12.77, on average, up 11% from 2023, according to the group's analysis.

That's largely due to low beef supply. The overall cattle inventory is the smallest it has been in 73 years, and the amount of red meat in cold storage is at its lowest in more than two decades, according to the Farm Bureau.

"We had a really severe drought in 2022 that caused that reduction in supply," Schmidt said. "It's a long life cycle for cattle, so it takes time to rebuild that herd."

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The average person would pay $2.16 for ingredients to prepare one quarter-pound hamburger with cheese, tomato and lettuce at home, according to a Wells Fargo analysis.

Meanwhile, 2½ quarts of lemonade cost an average $4.19, up 12%.

A citrus greening disease outbreak in California, the U.S.' largest lemon producer, in late 2023 has pushed down supply, the Farm Bureau said. The U.S. Department of Agriculture estimates lemon production will fall 16% in 2024.

Average lemon prices are up 13% from last year, while sugar prices rose 11% due partly to lower global production, the Farm Bureau said.

"Overall inflation has also contributed to the increased prices for foods like chips, burger buns and many others," Nelson said.

Why chicken and potato prices are down

Adene Sanchez | E+ | Getty Images

A two-pound pack of chicken breast will cost $7.83, on average, down 4% from 2023 and 13% from a record high in 2022, per the Farm Bureau analysis. Chicken supplies have rebounded, according to USDA data, following a historic and deadly outbreak of bird flu in 2022.

Meat (including ground beef, pork chops and chicken breast) accounts for 50% of the total cost of an Independence Day barbecue, according to the Farm Bureau.

Potato salad will also be cheaper than in 2023, largely because of lower prices for its key ingredient. Two pounds of potatoes cost $1.53, down 17%, the Farm Bureau said. Crop production is recovering from weather-related shortfalls that had pushed prices to recent record highs, it said.

How to save money

Prices for dining out have increased more than groceries in the past year: Up 4% versus 1%, respectively, according to the consumer price index.

The average price of a quarter-pound burger at quick-service restaurants is $6.95, triple the cost of preparing one burger at home, Wells Fargo found. For a party of 10, party hosts would save $47.90 by cooking at home instead of buying a burger, it said.

"This is going to be another great year to break out your grill and cook the burger yourself at home," Schmidt said.

That said, for those who require the convenience of dining out, many quick-service joints are offering value options for diners, she added.

Higher costs for aluminum have fed through to prices for 12-ounce drink cans, Schmidt said. She recommended considering a two-liter shareable bottle instead of individual aluminum cans. The price for a 12 oz. can of soda is up 4.8% over the past year, while that for two-liter bottles is down 6.5%, for example.

Consumers looking to save should also do a little online research, she said. Grocery stores often run Fourth of July deals; consumers can look up weekly ads and shop around for cost savings.