‘As I See It’ by Gary Truitt: Don’t Blame Farmers for Grief at the Grill

This Fourth-of-July holiday, Americans by the millions will be gathering in back yards, parks, and campgrounds for a staple of summer holiday celebrations: the cookout. With family and friends, in large groups and small, animal protein will be sizzling on grill while a cornucopia of vegetables, fruit, and dairy products stand ready on a table nearby. Don’t forget the ice-filled cooler with beverages of every kind.

This year, however, the price tag for the traditional feast will be significantly higher than it has been in decades. However, the reason for the price hike has little to do with what happens on the farm and is more about the current state of mind of American consumers.

The 2023 Rabobank BBQ Index, which measures the cost of staple ingredients for a ten-person barbecue, shows that it will cost $97 to host a cookout on Independence Day this year, up from $73 in 2018. Indeed, inflation has been running hot, particularly in food prices, which have risen 31% in the past four years, marking the largest four-year spike since the 1970s oil crisis.

The biggest price hikes, however, are in areas you might not expect. While the cost of beef and chicken are up, the big hikes are in hamburger buns, potato chips, and sodas. The forces driving these increases include the war in Ukraine that has dramatically impacted the price and supply of wheat, storms in the western U.S. that cut the potato harvest hast fall, and the cost of labor and fuel that have pushed the cost of soft drinks higher.

Traditionally, when food prices rise, consumers cut back or switch to cheaper cuts of meat and less processed foods. That is not the case this Independence Day. In the wake of a protracted pandemic which ushered in an era of economic hardship and social distance, many consumers — particularly those under 40 — are now prioritizing experiences over goods. Consumers have placed a premium on socializing and fostering relationships. Despite the sticker shock at the grocery store, cost isn’t the primary concern when looking to bring people together or celebrate a milestone.

“Consumers have taken some heavy punches, but they’re still standing,” said Tom Bailey, senior consumer foods analyst at Rabobank. “They’re being shrewd in areas that don’t enrich experiences, while giving in to the urge to splurge where it matters most. With that mindset, look for spending to heat up this summer on quality meats and drinks — the recipe for a memorable barbecue.”

This is evidenced by what consumers spend the most on when buying food for a cookout. Beef and beer top the list, with 27% of the total barbecue bill being accounted for by beer. While cheese price increases have been moderate, cheese consumption has skyrocketed. The average American consumes 40 pounds of cheese per year. Ice cream has not fared as well, with total demand dropping 18%. Another cookout staple that has seen big price hikes are pickles. Bad weather impacted the cucumber crop and caused a shortage in pickles.

According to economists, these price hikes will continue throughout the summer.  With consumers putting experience before economy, demand for these high value items will remain strong. While everyday shopping patterns may be different, this willingness to splurge for special events may carry over into the Thanksgiving and Christmas dinner season.

Have a great celebration this Independence Day!

That’s how I see it.

Gary Truitt

The opinions expressed in this article are those of the author and not of Hoosier Ag Today, its employees, advertisers, or affiliated radio stations.