Beef prices buoyed by cutthroat competition in meat market

(Copyright/Wavebreak Media)
(Copyright/Wavebreak Media)

If the Fourth of July just isn’t a holiday without a burger on the grill, you’re in luck.

The latest survey of food prices in Arizona shows that shoppers can find ground chuck at just two-thirds the price it was two years ago.

Not interested in red meat? Chicken breasts also are far cheaper now than they were as recently as last year.

And if you like egg salad, a glut on the market is also driving down prices.

“It’s hamburger time for everyone,” quipped Julie Murphree, spokeswoman for the Arizona Farm Bureau Federation which conducts the quarterly surveys.

So what’s driving down prices?

Murphree says some of that involves the normal laws of supply and demand.

That’s the particular case with eggs, she said, citing conversations with the Hickman family which is a major egg producer in Arizona.

“They have said that prices have been way too low,” she said.

“We are overproducing right now,” Murphree said. “And in summer, sometimes, demand is not quite as high as it is, especially in the fall when we’re starting to ramp up a lot of baking and stuff.”

As to those beef prices, Murphree said there’s a good supply on the market. She also said that ranchers are figuring out ways to deal with the high feed prices which had driven the cost of red meat into areas where some shoppers were choosing alternatives.

But there’s also something else at work.

Murphree said Arizona has one of the most competitive — some would say cutthroat — competition in the grocery industry. Even with the consolidation that’s occurred during the past few years, she said supermarket chains feel the need to keep prices as low as possible to retain customers.

That competition played out during the past few days on the stock market.

Kroger Co., owner of the Fry’s grocery chains that have a major presence in Arizona, saw the price of its stock drop by about 25 percent. And that wasn’t helped at all by the decision by Amazon to purchase Whole Foods, setting the stage to make that much smaller chain a major competitor.

The bottom line is the survey found the cost of a market basket of 16 typical items this quarter was $46.06. That compares with $49.26 for the same quarter last year.

Of note is that prices generally remain below where they were two or three years ago, even with the effects of inflation.

The survey is done by Farm Bureau volunteers who check local grocery stores and look for the best prices on the list. The costs reflect sale items but do not take into account other bargains that may be available to shoppers, either from using digital or printed coupons or being a member of a store’s “affinity” network which provides further discounts.

Item | 2nd quarter 2017 | 2nd quarter 2016:

Red delicious apples (pound) | $1.59 | $1.33

Russet potatoes (5 pounds) | $2.39 | $2.81

Ground chuck (pound) | $2.86 | $3.77

Sirloin tip roast (pound) | $6.76 | $6.98

Sliced deli ham (pound) | $3.61 | $3.51

Bacon (pound) | $4.74 | $4.49

Boneless chicken breasts (pound) | $3.21 | $4.36

Whole milk (gallon) | $1.96 | $1.95

Shredded mild cheddar cheese (pound) | $4.49 | $3.81

Grade A eggs (dozen) | $1.43 | $1.69

All-purpose flour (5 pounds) | $1.98 | $1.86

Orange juice (1/2 gallon) | $2.62 | $2.89

Vegetable oil (quart) | $1.82 | $2.65

American salad mix (pound) | $2.79 | $2.79

Toasted oat cereal (8.9 ounce box) | $2.50 | $3.13

White bread (20 ounce) | $1.31 | $1.24

— Source: Arizona Farm Bureau Federation

Market basket of 16 selected basic items:

2017: 1st quarter – $49.16; 2nd quarter – $46.06

2016: 1st quarter – $51.20; 2nd quarter – $49.26; 3rd quarter – $48.72; 4th quarter – $47.07

2015: 1st quarter– $50.29; 2nd quarter – $50.88; 3rd quarter – $54.57; 4th quarter – $51.15

2014: 1st quarter – $52.40; 2nd quarter – $52.64; 3rd quarter – $50.88; 4th quarter – $53.02

2013: 1st quarter – $49.75; 2nd quarter – $47.97; 3rd quarter – $50.87; 4th quarter – $51.62

2012: 1st quarter – $50.79; 2nd quarter – $51.19; 3rd quarter -$49.25; 4th quarter – $50.54

2011: 1st quarter – $47.85; 2nd quarter – $51.31; 3rd quarter – $50.71; 4th quarter – $51.39

2010: 1st quarter – $45.96; 2nd quarter – $48.84; 3rd quarter – $46.48; 4th quarter – $45.44

2009: 1st quarter – $54.43; 2nd quarter – $50.89; 3rd quarter – $46.02; 4th quarter – $45.89

(All figures in actual dollars at the time, not adjusted for inflation)

— Source: Arizona Farm Bureau Federation

Food prices up from a year ago

Photo courtesy U.S. Department of Agriculture
Photo courtesy U.S. Department of Agriculture

Pork getting expensive?

Blame the Chinese.

That’s not the official position of the Arizona Farm Bureau Federation which on Tuesday reported its quarterly prices of a typical market basket of items.

But the organization’s Julie Murphree said the fact remains that the swine flu is killing large numbers of pigs in China even as pork remains the most popular meat there.

And yes, she said, it is true that the trade dispute between China and the United States is resulting in that country looking elsewhere for its pigs. But Murphree said that demand remains high and that’s going to force China to keep buying what is produced here.

“It’s kind of the global market,” she said.

The result shows up when Arizonans go shopping.

A year ago a pound of sliced deli ham was selling for an average of $3.38 at the stores sampled by Farm Bureau staffers and volunteers. The most recent survey puts the price tag at $5.36, a whopping 58 percent increase.

Bacon also is becoming more dear, with shoppers finding the average price a $6.17 a pound, up nearly 32 percent from a year ago.

Those big increases, coupled with higher prices on beef, sent the cost of the 16 items sampled up to $52.29, 13 percent higher than the same time last year.

Still, Murphree said it could be worse.

She said Arizona benefits from a highly competitive grocery market, with many major players competing for shoppers’ dollars. Murphree said residents of many other states have more limited choices.

The prices reflect what Farm Bureau shoppers found at grocery stores around the state who took advantage of advertised sales when available. But it does not include other discounts some stores make available to those who have “affinity” cards connected to the chain.