Cheese

Food Inflation, Threatened Tariffs: What Is The Effect On Super Bowl Snack Tables?

Mon, 03 Feb 2025 20:18:39 GMT

Whether it’s chicken wings (up 7%) or vegetables for the snack tray (broccoli is down 7%), Wells Fargo Agri-Food Institute Economist Dr. Michael Swanson says consumers shouldn’t expect every snack food category to increase their budget for a traditional Super Bowl party. And he doesn’t think President Trump’s latest trade talks with Mexico, Canada and China will have a direct, immediate effect at the grocery store by Sunday’s big game.

“It’s unlikely that changes in tariffs will impact prices headed into the Super Bowl, however, we’ll see how it plays out in the coming weeks. This is certainly the year for consumers to stay food fluent,” Swanson says.

For the past four years, he’s led the team at Wells Fargo to look at popular categories for game day watch parties and analyze the pricing trends. His research aims to help consumers stay “food fluent” to find alternatives, substitutions and bargains when they can.

“We started in 2021 when we saw the first spike in food inflation. And the past three years, everything has been up—it was a question of how much a category was up that year,” Swanson says. “But for 2025, some categories are up, and some are not. Some are way up; and some are way down.”

Swanson says it’s demand keeping prices elevated—not supply.

“Take chicken wings. Did the avian influenza knock out the chicken wings? The answer is, no, it didn’t–it was mainly the egg laying flocks. We have almost more chicken wings than we did last year, but prices are up 7%. Why? It’s consumer demand,” he says.

For dairy products, the Super Bowl is one of the top three demand events.

“Between the nachos, pizzas and sundry cheese-based snacks, the industry knows that and prepares well in advance making sure all the fans have what they need,” he says. “Dairy as a category was up 1.3% from a year ago, but it has been a relatively flat pricing environment for the last 18 months. Consumers and producers have found a good balance overall.

Specific to ongoing trade developments and tariffs discussions, Swanson says the dairy industry is staying keenly aware.

“Exports are a key element for balancing U.S. dairy production and demand. The industry is preparing to see what happens with key markets like Mexico and Canada in the near term,” he says.

He says the same could play out for avocados, which is notable given the tariff discussions on Mexico—our No. 1 source country for avocados.

“The question is, is the supply substitutable. With avocados, we’re seeing a push to grow more in Ecuador, Peru, and Colombia,” he says.

While longer-term supplies may be diversified, it takes years for trees to bear fruit. And for now, per the Wells Fargo Super Bowl Report, avocado prices are up over 11%.
Two other vegetables up year-over-year are red bell peppers (up 7.4%) and prepared carrots (up 3.4%)

So what categories went down in year-to-year pricing?

Notably, some vegetables are down including celery (down 8.4), broccoli (down 7.2%) and cauliflower (down 3.8%).

A more robust supply of potatoes has yielded a decline in potato chips prices, which are 5.1% lower. Also when it comes to overall pre-packaged foods, the container prices have come down, so increases in transport costs aren’t being passed along to the consumer as they have been in the past.

If you’re looking for a “bargain” Swanson points to store brand frozen pizzas.

“Some of those carbohydrate-based components are down through competition. Something like frozen pizzas, for example are down from a year ago. And especially you look at those store Brand pizzas are way down. They’re down about 8% versus just 2% for the national brand. So if you really want to save money, competition is your friend.”
As for protein, the biggest price decline has been in shrimp with a 4% lower price this year than last.

Retail beef prices remain elevated.

“It’s not that we have poor supply of beef. We’re doing some interesting dynamics right now, exporting a little bit less, importing, a little bit more, putting more pounds on those cows,” Swanson says. “We have a decent supply of beef, but the price is still up 3.5% to 4% as a category from a year ago. The consumers love it, and they’re going to pay for it.”

His advice overall in this food economic environment is to stay a smart shopper.

“We’re entering a competitive situation right now–we’re seeing things go up and things go down. If a product matters to you, get out the on the web, shop a couple of stores, because one of the things we do find is promotions are back in the game.”

Corn Falls But Soybeans Hold Together: Did Cattle Top?

Thu, 12 Dec 2024 22:19:46 GMT

Grain and livestock markets close mixed Thursday.

Bryan Doherty, Total Farm Marketing, says corn ended lower on a combination of profit taking and farmer selling after running into chart resistance in the March around $4.50.

Weekly exports were a bit disappointing at only 37.3 million bu. which was down 45% from last week and 32% from the four week average.

The weakness in corn pulled the wheat market lower, plus wheat saw some technical selling and profit taking.

Weekly exports for wheat were also disappointing at 10.7 million bu.

Soybeans managed to hold their own despite lower feed grains, still holding chart support and with some unwinding of corn, soybean spreads.

He says support also came from USDA reporting another 12.3 million bu. flash export sale of soybeans to unknown destinations.

Weekly exports for soybeans were below last week at 43.1 million bu. but Doherty says commitments are still 12% ahead of last year showing solid demand.

Doherty says traders also realize that South America’s record crop is not made just yet and won’t be until January so its holding slight premium.

Live cattle futures made new highs for the move with sharply higher cash and cutouts but then failed.

The volume of fed cash trade has been steady to $3 higher.

However, Thursday dressed sales in the North ranged from $302 to $312 in the North and there were live sales at mostly $194 to $196.

Cutouts were also sharply higher at noon, yet futures ended lower.

So is this reversal a sign the market topping?

Doherty says it may be too early to tell.

Milk futures soared on Thursday with January Class III milk closing up $.73 at $20.25 per hundred weight with the February contract $.65 at $20.14.

Doherty says it was a combination of short covering and higher cheese prices.

However, he isn’t confident the rally has much upside as he thinks the market will be capped by increasing cow numbers and milk production.

“When milk prices hit their highs earlier in year it was due to perceived production losses due to H5N1 in the dairy herd. The only way we could retest those areas is with a big surge in demand,” he explains.

Food Inflation Makes Your Super Bowl Party Cost More

Fri, 23 Sep 2022 21:14:16 GMT

The economists at Wells Fargo, led by Dr. Michael Swanson, have some insights on how this year’s snacks for the Super Bowl are reflecting the trend of food inflation.

“Food inflation is a hot topic,” Swanson says noting that overall prices in the category are running at 6% higher than a year ago, whereas typically year-to-year food inflation is 1%.

The economists pulled data from USDA, Bureau of Labor Statistics, Nielsen data at the supermarkets, and insights from the bigger team at Wells Fargo.

Broadly, the categories more dependent on packaging and general logistical resources show the highest increases comparing at-store prices this year to last year.

By category here are some key takeaways from their findings:

Chips are only up 1%.

“We’re a great potato growing country, and so we have a good supply of potatoes this year. The chip manufacturers are very efficient at turning them into potato chips. And so even though they’ve had challenges with their packaging and their labor and their freight, they’ve kind of kept a lid on the potato chip and chip prices,” Swanson says.

Two popular dips, two different stories.

Guacamole is only up 1%.

“Avocados and guacamole have become really popular. Most people should know but maybe they don’t that most of our avocado is coming from Mexico and Peru. And we’ve seen a lot of expansion down there. They’ve found it profitable to grow avocados and turn them into guacamole,” he says. Salsa is up 6%.

“It wasn’t so much in the tomato and chilies, but it’s the packaging and labor and transportation that caught up with salsa prices,” Swanson says.

Go for bulk packaged vegetables

Swanson shares as a category you can evaluate vegetables as either bulk goods or the pre-package convenience options. He shares to save a bit on the inflationary costs, go with bulk carrots and celery and wash and chop them yourself so you are only exposed to 2 to 3% higher prices. He says the packaged salads and other such products are seeing higher cost increases.

Proteins are more expensive—some showing double digit higher prices

“We’ve seen almost every protein jump up,” Swanson says. “This is where we’re starting to see some double digit, you know, between 15 and 25% type increases depending on what protein and cut you’re talking about. So far pork has really been the bargain, in terms of increases. You can still find some really good values in the pork category,” he says.

And popularity has propelled one poultry product very high.

Wells Fargo economists quote USDA data showing prepared chicken wings are up 14% to 26% (bone-in and boneless respectively). The IQF (individually quick frozen) chickens are up 26%. So IQF wings are $3.57 per pound, and $7.24 per pound is the average for prepared wings.

Double dip on cheese, perhaps

“The American dairy complex and American dairy producers have really stepped up,” Swanson says. “We’re actually seeing about a 7% decline as a cheddar cheese from a year ago. Dairy is a category where it’s actually helping control the budget, without any runaway inflation.”

Some beverage categories quench your thirst with less inflation

(Farm Journal)

Swanson’s team evaluated the costs of soft drinks, beer and wine. The report shows how packaging and logistics have swelled soft drink prices by 14%. However, market dynamics have kept beer and wine inflation more in check. He says beer prices have only increased 4%--mostly due to diversification in the market with more craft breweries in production. Wine prices are up only 3% thanks to a global market supply of products from Australia, Chile, South Africa and Europe.