This Fourth of July, Americans will pay more for their backyard barbecues than ever before. The inaugural 2014 Rabobank BBQ Index examines the composition of a ten-person barbecue and how rising commodity prices have impacted the cost over the years, showing an overall price increase from $ 51.90 in 2004 to $55.62during the financial crisis in 2007, to a total of $66.82 in 2014.
Based on data from the Bureau of Labor Statistics, the Rabobank BBQ Index tracks the price of typical barbecue ingredients, from main dishes of grilled chicken or a cheeseburger on a bun topped with lettuce, tomato and pickles, to chips and ice cream on the side and soda and beer to wash it down.
"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% 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."
BBQ Index Breakdown
Meat: Combined, beef and chicken make up one-quarter of the Index and they each tell a different story. While beef has seen the large increase of 71 percent in five years, including 14 percent over last year, chicken prices have remained fairly flat, up just three percent over five years and one percent since last year. According to Rabobank analysts, cattle herds in the United States are the smallest in 63 years and exports have grown substantially, using a larger share of U.S. production, which has driven up the cost. Meanwhile, chicken exports have also expanded, mainly for dark meat. While export prices have increased, domestic white meat demand has remained steady, maintaining stable prices in the U.S.
Dairy: Retail cheese and ice cream prices have both jumped 15 percent in the past five years. Most of the gains in cheese have occurred in the last year, with prices up 11 percent. While U.S. demand for dairy has slowed in recent years, growing demand in China and other developing markets has kept prices rising. U.S. milk typically used for cheese and ice cream is now increasingly shipped overseas as powder. In Q1 2014 U.S. dairy exports rose 26 percent*, and 13 percent of milk produced in the U.S. is now shipped internationally. And with a recent study** saying dairy fats are not bad for you, U.S. prices could go even higher if demand grows both at home and abroad, putting pressure on supplies.