00:00So you and the team out with some research, Robin, it says the summer barbecue for 10 people
00:04will cost about $161. That's for a pretty big menu. It's for food. It's for beverages.
00:09Yet that's still up 2.4% from last year. What are the other distinctions that you
00:14noticed with this year versus last year? Yeah, well, I think you called it right
00:18out of the gate. You know, we are seeing meat and proteins really rise year over year,
00:24specifically when we talk about ground beef, which is up about 14%. As you noted,
00:28we are at record low supplies, dating back almost 75 years. So that's really causing some
00:34stress with the budget. We do see a little bit of relief and better news with chicken breasts.
00:40It's a good lean protein. That's up about 3%. Pork ribs are another option. Again,
00:45up about 3%, but really good and convenient when feeding a crowd.
00:49Well, is there any area where we've seen that shoppers are getting some relief? We've been
00:54seeing prices going up nonstop as we clearly are seeing through some of your reports.
00:59You know, it's a little bit of a mixed bag. Two areas that I can highlight would be desserts.
01:04Sugar prices have stabilized. So we're seeing cookies, ice cream, both up just only 1% year
01:11over year. I'd almost call it flat. Pies, especially, you know, in the bakery area, again,
01:16up just about 4%. But I think that lowering of the sugar cost is helping out in the bakery aisles.
01:22Another area I'd point out would be fruit. And, you know, the best way that you can find value in
01:28fruit is to really purchase whatever is seasonal. So there are some good options there. Watermelon
01:33being one, it's down about 3%. And then berries are a mixed bag, but you can probably find some value
01:39in savings there as well.
01:41Well, your report is called Stay Close, Grill Big. Are families choosing backyard gatherings as opposed
01:47to travel at all because of affordability?
01:50We are seeing more people opting to stay closer to home. And with that comes the bigger crowds. You
01:55have hopefully some more family around and friends to join you. And that's really kind of what we took
02:00into account with our menu and our planning, really thinking about feeding that crowd.
02:05We spoke to Marta Norton over at Empower earlier. I mentioned that the CME group is launching trading
02:10contracts for the beef products that are used in hamburgers and meatballs as prices surge amid a shrinking
02:15U.S. cattle herd. As we mentioned, too, at the top of this, there are political implications of that
02:20kind of both ways for the president. One is you want to satisfy the farmers without alienating them
02:25by allowing for cheaper imports. But you also want to make sure that the folks who aren't the farmers
02:29and are paying for this stuff at the grocery store aren't seeing prices rise too dramatically.
02:33Is there relief on the horizon specifically when it comes to beef prices?
02:39You know, in truth, it is going to take some time. Rebuilding the herds is not an overnight process,
02:44as you can imagine. It can take two to three years to get the calves up and ready. So we
02:49do expect to
02:50see some relief, but not until 2027, perhaps, as the herds start to come back up.
02:55What about the screwworm part of the equation here?
02:59Yeah, so the screwworm is back in the United States. It's really in the southern states. We're keeping an eye
03:05on that. At this point, we do not see that that is really disrupting beef supply or having any issue
03:12on
03:12pricing. Why do you argue in your report that ribs are taking center stage?
03:19You know, pork prices have been relatively stable, especially relative to, you know, red meat and
03:24chicken. And again, it's an option where it can be easy to feed a crowd with some of the different
03:30cuts of pork where you can really find some good value.
03:34Well, also, you know, how are you thinking about just not this holiday season, but what this means
03:40for grocery prices down the road as we're looking into the second half of the year?
03:45The grocery prices have really followed the food at home information that we're seeing coming out of
03:50the BLS. And we see that it's moderating compared to some of the increases that we saw in the past,
03:56certainly tracking back to COVID. So there's good news that the increases are not as big as they had been,
04:02but still it is costing more. I will say, you know, that when we talk about produce, fruits, vegetables,
04:08any commodities like that, it's really a function of supply and demand. The pricing is a function of supply
04:13and demand. And so with beef, we see the prices high because the supply is low. I think as we
04:19get into the
04:19growing seasons and more options are available and hopefully increasing some of the supplies, maybe those
04:26prices could moderate a bit.
04:28We're speaking with Robin Wenzel, head of the Wells Fargo Agri-Food Institute. She joins us from Minneapolis
04:33this afternoon. One of the conversations that we had over the last couple of months has been the cost of
04:40transporting the products that we buy at the grocery store and specifically when it comes to produce and getting,
04:45let's say, some produce from California to the East Coast, maybe not as important this time of the year.
04:50But the increase in diesel prices that we saw in the earlier part of this year really affecting
04:57those prices, given that we haven't seen gas prices come down the way we have seen oil prices come down.
05:04Is that still a big share of increase in costs when you're at the grocery store?
05:09You know, for the produce and for this transportation, those costs are built in. It can take some time to
05:15see
05:15that come down in the pricing. We, you know, throughout history, we see diesel prices go up
05:23and go down. And so it does moderate within the fresh produce. It doesn't always tend to be to as
05:28great
05:28a degree as we would think, although of recent, you know, we are seeing some impact. But we do hope
05:34that that will, again, start to moderate and trend down at some point.
05:37When should that trend back to pre-war levels?
05:41I don't have the answer to that. I would like to have that answer. But I think it is going
05:47to take
05:47a bit of time, as we can imagine, to kind of work through inventories and have it right size a
05:53little
05:53bit. Well, Robin, outside of beef, where else are you really seeing consumers being crunched in this
05:59moment? Earlier, we were just talking about buy now, pay later on one of our earlier shows on
06:02Bloomberg TV, and how so many consumers are trying to find ways just to finance the essentials.
06:07Don't know if we consider Fourth of July backyard grilling an essential, if you will. But
06:12curious, where else are you really seeing consumers essentially trading down?
06:18You know, with beverages, that's one of the areas. Certainly, we've seen kind of, you know,
06:23alcohol beverages flat. They're up about 1% in price. But we are seeing consumers trying to find
06:29other options out there. Part of it is consumer taste and preference, people looking for low sugar,
06:34low alcohol, no alcohol options, and, you know, switching to the sparkling waters and some of the
06:39other beverages. I would also say that, you know, dried goods, those pantry items tend to be
06:46effective with cost savings for consumers versus a lot of the fresh produce and proteins.
06:51Are we ever, or are we at this point, Robin, seeing any macroeconomic effects as a result of
06:56GLP-1s? There was so much talk a couple years ago. You know, there were folks out there saying,
07:02this is going to be a boon for airlines, because if everybody weighs less, they're not going to have
07:05to spend as much on fuel. Certainly, we've seen some CPG companies change up their formulations and
07:11add protein. And we've seen portion size commentary from companies. What are you seeing in your world?
07:17We are seeing a shift in consumers' habits and their purchases at the grocery stores. So we do see
07:22people trying to lean in on the outer aisle. Again, the fresh produce and protein when they're
07:28on GLP-1s, avoiding a lot of the processed foods, the sugary foods. So we see some changes there.
07:34Protein and fiber are the two winners from the GLP conversation. That's really where a lot of the
07:39consumers and people taking GLP-1s are focused with their nutrition, with their diet, and finding
07:46ways to supplement and add that to their menu. But what types of proteins?
07:51Proteins and what types of fiber? Lean proteins. Everything?
07:54Lean. Oh, lean proteins. Okay.
07:56Yeah, lean proteins. So your fish, your chicken, all of those. I'm really trying to pack it in. Also
08:01looking at dairy. Dairy's been a great source for protein. We've seen pottage cheese just explode in
08:06popularity, a lot of the yogurts. So that's an area in addition to a lot of the protein shakes that
08:12we
08:12see. And, you know, with fiber, it's getting those fruits and vegetables in there, getting some of the
08:16whole grains in there, and then certainly adding to it all the supplements.
08:20Are you seeing at all shoppers maybe going toward canned goods as opposed to maybe fresh produce
08:26or fruits? When we think about the produce section, are you seeing people maybe trading
08:29down from a brand name to Walmart's great value?
08:33People are prioritizing, you know, making their budget stretch, and that is certainly a way to do
08:39it. So working with private label, working with more of the dry goods, the canned goods,
08:44there's value there. And certainly a lot of the retailers are incentivizing people to shop in that
08:50area as well as some of the specials. So it is a constructive way to make your budget stretch further.
08:56UAVM.
08:56UAV.
08:56UAV.
08:56UAV.
08:56UAV.
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