Why This Will Be America's Most Expensive Independence Day Ever
NEW YORK ( TheStreet) -- You're about to consume the most expensive hamburger of your life this Independence Day.
Cattle prices rose some 9% in June as a hard freeze in the winter and two years of drought in cattle producing regions of the United States cut back on the amount of heifers that were heavy enough to go to feed and eventually to slaughter.
"It just seems like the Fourth of July barbeque is the most expensive we've probably had in history," Phil Flynn, senior market analyst at Price Futures Group, said in a phone interview. "If you're going to do steaks and you're going to do burgers, it's going to be a star-spangled headache."
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This June marked the third highest jump in cattle prices since 1970 and the biggest increase before July 4 since 2004, when the market witnessed a 10.2% pop that May, said S&P Dow Jones Indices global head of commodities Jodie Gunzberg, citing U.S. Department of Agriculture data.
USDA data show that consumers are paying about $5.36 a pound for lean and extra lean ground beef at the grocery store -- a more than 10% increase from the same time a year ago.
This means that Americans preparing for huge cookouts will have to look closely at labels. It may look like you're getting the same deals you got last year, but the amount of beef in a package may be reduced. And Gunzberg warned that some places might be adding pink slime -- a beef additive -- to offset the price premium customers would absorb if a package of beef contained, well, only beef.
Americans who insist on prime cuts of beef, including T-bone and rib eye, are certain to be paying the top price for the holiday weekend.
If the surge in beef cost is too high, consumers also have to look out for pork. Pork prices remain somewhat elevated after the so-called PEDv, or porcine epidemic diarrhea virus, wiped out 10% of the nation's pigs. Lean hogs -- the measure by which markets price pork -- remain near record highs, but have flattened since spiking through February and March.
But by year end, pork and chicken combined prices will only have risen by 4%, whereas beef is expected to rise by 6.5% in 2014, Gunzberg said.
Corn will be cheap thanks to a good growing season, and bread won't hurt individual's pocket books as the wheat market entered a bear market following its worst quarterly decline in three years.
Travelers will notice a huge jump in gas against the same time a year ago. The average price of a gallon of gasoline popped 21 cents in the final week of June from the same week in 2013, the U.S. Energy Information Administration reported. The Midwestern states have experienced the most painful gap higher by 28 cents a gallon. The West Coast is paying 14 cents a gallon more.