Analysts predict where consumers might feel the burn at the grocery store
Here’s some food for thought.
As the economy improves, Americans are putting their money where their mouth is. According to the latest data from the Bureau of Labor Statistics, consumer spending on food was up 2.6% from 2015 – 2016, and up 3.9% from 2014 to 2015. Americans now spend more than $7,200 per year on food.
Some foods are likely to take a bigger bite out of your food budget than they have in the past. Here’s what analysts predict may cost you more this year and/or next.
Eggs. Consumers will likely see the price of eggs tick up slightly this year or early next year, says Dewey Warner, a research analyst at Euromonitor. The reason? In 2015, farmers had to put down millions of egg-laying hens amidst a bout of avian flu. That reduced supply and sent prices up to nearly $3 for a dozen Grade A large eggs, according to the Consumer Price Index. But in the past few years, farmers — trying to make up for that — have oversupplied the market with eggs, leading to a 31% decline in egg prices in 2016, he explains. Now, predicts Warner, those egg volumes will start stabilizing and consumers might pay more. The government predicts that egg prices — now about $1.33 for a dozen — will rise 1-2% in 2018.
Fruits like peaches and berries. Andrew Alvarez, lead analyst at IBISWorld, notes that “fruits and vegetables — such as peaches, cucumbers, tomatoes, berries, and nectarines — all typically experience an uptick in price over the fall.” This, he says, is due to seasonality and the locations where the fruits or veggies can still be grown come fall. “The harvest has a finite run, and the yield over this small period can significantly affect pricing and availability,” he says. Prices don’t always rise, but you often see a rise of at least a few cents or more through fall and into winter, he explains.
Chicken wings. Americans ate more than 1 billion chicken wings at restaurants over the course of a year, and they ate them at home more too, with frozen wing sales rising 12%, according to data cited in The Wall Street Journal. This has already sent prices up — wholesale wing prices jumped 20% this year — and that will likely continue, according to some. Indeed, popular wings restaurant Wingstop said they expected prices to continue to rise through year-end, according to the Journal. While some restaurants and stores may absorb the higher cost of wings, many will pass them along to consumers. Buffalo Wild Wings will replace it’s half-price wing Tuesday deal with one for boneless wings, which aren’t having such a price surge, the Journal notes.
Bakery products that use wheat. Now may be the time to be gluten free. A big drought in the Dakotas and Montana is hurting wheat crops, and Warner says that could impact prices on things that contain wheat, from pizza crust to muffins. In 2018, the government predicts a 3-4% uptick in cereal and bakery products, in part because of the wheat prices; and already this year we’ve been some fluctuation.
Tuna. Tuna prices have been rising — you may have noticed your spicy tuna roll is pricier now — and you’re likely to see more of that, says Warner. Tuna companies are starting to enact more sustainability measures — and this is something Warner says it likely to increasingly become industry standard. For example, Thai Union, which makes the popular tuna brand Chicken of the Sea, has promised Greenpeace it will reduce the number of tuna it catches using big aggregation devices (think huge nets that catch tons of fish at once) by 50% by 2020. Moves like this may lower the supply of tuna and thus raise prices for consumers both because they will likely lead to lower numbers of fish caught and also because of the higher costs of labor associated with implementing these measures.
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