With inflation at a 40-year high, Americans are feeling the pinch in their wallets ahead of the Fourth of July weekend. The cost of a family cookout for 10 has gone up 11%, according to a new report from Wells Fargo Food and Agribusiness Industry Advisory Group.
Inflation is a "real pain point" for Americans, Karol Aure-Flynn, Wells Fargo sector analyst and co-author of the report, told Yahoo Finance (video above).
Protein prices are the leading "pain points" for consumers, Aure-Flynn said. Ground beef prices are up 11.8% year over year. Prices for chicken wings and chicken breasts are up 38% and 24%, respectively, while drumstick prices are up 12%. Poultry-based hotdogs are up 15.3%, and beef franks are up 6.3%.
"Price inflation has two components," explained Aure-Flynn. "One is the cost inflation part, where the producers, processors, and manufacturers have to pass on some of just really rough waters that they've had to navigate. And the other part is demand."
For example, she said, "Chicken producers have been dealing with some disease issues. So the supply is down. And with demand up, then you're going to still see prices high." For beef, it's a herd issue. "Herd size (think beef cattle) cannot increase on a dime, and therefore, with a constrained supply and without a decrease in feed cost, consumers are likely to see elevated protein prices for some time," the report states.
Ways to save
There are some ways to rein in costs though. "So we're looking for shrimp on the barbie, pork tacos, my favorite, shrimp tacos," Aure-Flynn said.
"Shrimp and pork are relatively good buys, along with tomatoes, and all serve well in tacos. Average prices for pork are up 3.1% from last year, versus 12-15% for other proteins, making it a relative bargain. Shrimp is in the same boat. Current prices are still below the 5-year average of $4.21. Tomatoes will make great taco-toppers, up only about 1% this year. BBQ pork ribs are a traditional favorite and great alternative – or addition – to tacos," the authors found
Aure-Flynn recommends being on the lookout for "deals," with retailers looking to keep products moving off shelves. "A slowdown in demand, despite higher prices overall, may create “specials” that offer bargains for consumers. Plan ahead to seek longer shelf-life items (frozen patties, for example) that can relieve some of the sticker shock. Reserve last-minute shopping trips for perishable fruits and vegetables."
Another tip: Shop the frozen section. "Although prices for fresh ground beef are up by 11.8%, demand for pre-formed beef patties has fallen off a little this year versus previous years, so look in the frozen section for advantageous pricing," the report notes.
But skip the ice cream aisle. Ice cream prices have bounced 6% since this time last year. Instead, opt for nondairy desserts, such as sherbet, gelato, and popsicles, which have declined in price by 4.5%.
Avocado prices to moderate
There is some good news coming for avocado lovers, however.
From 2018 to 2021, retail sales for avocados have nearly doubled, while prices increases in 2022 have contributed to a 24% year-to-date increase in sales volume by dollar, however, overall unit volume increases continue, according to the report.
Aure-Flynn told Yahoo Finance consumers will likely "see some moderation price wise" as California producers get into their "very heavy season" which occurs from mid-April to mid-July. This means there will be better supplies to improve offerings.
The report also encouraged shoppers to look in the frozen food aisle for "innovative new avocado offerings" like frozen guacamole and avocado dips and cubed fresh frozen avocados for salads and smoothies.
"Consumers really need to be looking and be mindful of seasonality" which could lead to better deals overall, Aure-Flynn said.
Another way to cut costs—make it from scratch! "One thing we really had fun with was ... homemade alternatives are. Fourth of July, who doesn't have that wonderful memory of making ice cream with their grandparents? You know, this may be the time for us to start going back to some old-fashioned options on that front."
Brooke DiPalma is a producer and reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at email@example.com.