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