'More pluck than chuck' this barbecue season
NEW YORK – Rising commodity costs have pushed the price of a barbecue dinner for 10 people to $66.82, according to a Rabobank analysis.
In its inaugural BBQ Index, Rabobank uses data from the US Bureau of Labor Statistics to track the price of typcial barbecue ingredients, such as grilled chicken or a cheeseburger with all the fixings, potato chips, ice cream and soda and beer. Rabobank found that prices of the ingredients for a 10-person barbecue meal have increased from $51.90 in 2004 to $55.62 during the financial crisis in 2007 to a current total of $66.82.
The inaugural 2014 Rabobank BBQ Index examines to composition of a barbecue meal for 10 people and how rising commodity prices have impacted the cost over the years. Click for larger view.
(Graphic: Business Wire)
"While commodity price fluctuations are not always passed on to retail prices, American consumers will feel some significant market changes this Fourth of July," said Bill Cordingley, head of Food and Agribusiness Research at Rabobank. "The beef market has exploded this year and retail ground-beef prices, the heart and soul of the American barbecue, are up an astonishing 71 percent over the last five years. We think there will be more pluck than chuck this year as some consumers lean to chicken sandwiches over burgers."
Beef and chicken combined comprised one-quarter of the index, according to Rabobank. Chicken prices have climbed only 3 percent over five years and 1 percent since 2013. But beef prices have jumped 71 percent in five years, and 14 percent over year-ago prices. Rabobank said that while export prices for dark-meat chicken have increased, domestic white meat demand has remained steady, keeping prices stable in the United States.
Another part of the story involves prices for dairy products. Rabobank noted that retail cheese and ice cream prices have jumped 15 percent in the last five years. Most of the gains in cheese prices, as much as 11 percent, occurred within the last year. Demand from China and other developing markets has spurred steady increases in dairy prices, although domestic demand for dairy products has slowed, according to Rabobank.
Beer, a favorite pairing with barbecue, comprises 28 percent of the total cost of the barbecue meal. Prices of 20 beers climbed 10 percent over the past five years, driven by the popularity of more expensive craft beers, according to Rabobank.
"The two weeks leading up to holidays like Memorial Day and the Fourth of July are some of the biggest in beer sales, regardless of price," said a Rabobank beverages analyst. "However, companies will still heavily promote their products and consumers typically load up on beer at home during these key weekends."
Weak consumer demand for soda has kept price increases small — only 4 percent over the last five years, Rabobank noted. Soda prices were down 1 percent year-over-year.
Declining grain prices, driven by rising global production, have kept prices for breads and snacks relatively flat, according to Rabobank analysis. Consumer demand for better-for-you snacks has contributed to a 3 percent year-over-year decline in prices for chips.
Despite rising prices for vegetables such as tomatoes and avocadoes, vegetables account for the lowest percentage of the BBQ Index, Rabobank said.