Why Your Fourth of July BBQ Costs More Than Ever

Welcome to FinTech TV.

America is turning the big 250, and nothing says Happy Birthday USA quite like firing up the grill.

But before you throw those patties on the fire, you might want to brace your wallet.

Now, According to the American Farm Bureau, this year's Fourth of July cookout for 10 people will cost a record breaking $73.82.

Yet believe it or not, there are actually some sneaky bargains hiding in your grocery cart that might just save your.

Well, joining us now to break it all down is Faith Parnham, an economist at the American Farm Bureau Federation.

Faith, great to have you here.

Thank you so much for joining me.

Well, at nearly $74 for a party of 10, this is technically the most expensive Fourth of July spread on record.

But when adjusted for inflation, is this summertime sticker shock, or are consumers right to be grumbling in the grocery aisle right now?

Yeah, just like you said, the basket cost is just around $74 for 10 people, but when we adjust it for inflation, it's holding pretty consistent to last year.

That being said, general inflation in the US economy has gone up about 4.2% in the last year, and so consumers are feeling that higher price tag not only in groceries, but other staples.

And so of course we know Americans across the country are paying more for groceries, and you'll definitely see some of that in Fourth of July this year.

Yeah, and Faith, when we look at the all-American cheeseburger, it is costing us a pre ground beef hitting an all-time high.

So what is happening out on the nation's cattle ranches?

Yeah, this year in our survey, we found an increase in ground beef, which is making hamburger prices go up, and we know that around the country folks are paying more for ground beef and beef products, but that's because America's cattle ranchers and farmers are facing a very low cattle herd size.

With a historic drought a few years ago, production expenses that are skyrocketing.

Farmers and ranchers have really downsized that herd, which means, you know, in practicality there's just less beef supply out there, and that's causing that price to go up.

However, in time, the herd will rebuild and we'll see beef prices come back to normal.

It'll just take some time for, you know, farmers and ranchers to grow those herd sizes, and then we'll see those prices resume.

Well, Faith, looking at the survey, something stood out to me, and while strawberries as well as lemonade are spiking, good old fashioned potato salad has plummeted almost 18% in price.

So tell me what has actually rescued my favorite side dish from the claws of inflation this year.

Yeah, potato salad is definitely my favorite on the plate too, so we are thankful to see that go down this year.

We actually saw a decrease in potato chips, about 1%, and potato salad, that 18%.

For potato chips, you know, potatoes are down a little bit.

That helps a little bit on the potato salad side, but on potato salad specifically, we're really seeing a decrease in the egg price that is used to make.

That potato salad.

So the last 3 years we've had historic egg prices due to high path avian influenza, which is a disease that affects chickens.

As we have gotten that back under control in the United States, we've really seen those prices of eggs drop drastically, and that's really going to help things like potato salad or, you know, any other things you use eggs and be a little bit cheaper this year.

Well, Faith, it's interesting you mention uh potatoes being some of your favorite foods because whether it's potato salad or even french fries or potato chips, I do have a weakness for potatoes.

Now it does turn out that where you light your sparklers does actually dictate what you pay.

So why is the west of the country getting slapped with the ultimate barbecue premium compared to the rest of the US this year?

There's a few different factors.

One is just there are more high cost of living areas in the West in the Northeast, so those sometimes cooler averages up a little bit more.

But also where you're located, so where some of these goods are produced, you know, the longer transportation to get some things out to the west or to states like Alaska or Hawaii, make those prices go up.

And we know that fuel prices have been really expensive this year.

So that's really driving some of that increase as we talk about regional differences.

And finally, Faith, before I let you go, our grocery bills are indeed currently feeling massive, but farmers are taking home less than 6% of every dollar we spend today.

So if the farmers aren't making a pretty penny from our cookouts, then who exactly is gobbling up the profits before the food even hits our plates?

So there's a lot of steps from, you know, the farm gate all the way to your flight, and so the rest of that dollar is spread out through there.

So maybe it's, you know, turning that wheat into a bread loaf.

There's a lot of different steps there that's taking up some of that, uh, profit, you know, farmers are only getting that 6 cents on the dollar, and they're also dealing with.

Historic inflation, you know, both on their grocery bills to feed their family, but also in their production expenses to grow the crops to raise the livestock.

And so we're really seeing a down farm economy.

In fact, our farmers are facing their 4th consecutive years of losses, meaning, you know, they're spending way more to grow this food than they're ever getting back for it.

And so, you know, as we look at the supply chain, that food dollar or that 6%, the other 94% is going to things like food marketing, food processing, maybe the labor in the grocery store, all of those other steps it takes to get the food from, you know, a farm into your house to eat.

Well, Faith, as we head into the holiday weekend, a lot of food for thought.

So I appreciate your time this morning.

Thank you so much for joining us and thank you so much for weighing in on this survey and have a happy Fourth of July.

Thank you so much.