Rabobank: Trade wars won’t burn your Memorial Day BBQ

Rabobank—a global food and agribusiness bank founded 125 years ago and a financier of the energy transition—released its annual BBQ Index May 20, just ahead of prime grilling season.

Rabobank’s commodity analysts found the cherished summer ritual should offer a welcome respite from trade war news. While prices for some items are up, 95% of the ingredients of the average barbecue are American-sourced. The price rises for the backyard barbecue in 2025 are driven by domestic supply and demand dynamics and inflation rather than tariffs. The all-American summer barbecue experience is closely tied to an all-American supply chain, shielding backyard chefs from the uncertainties of trade wars.

The Rabobank BBQ Index assumes a 10-person barbecue with a mix of family and friends, each consuming the same amount of food and beverages: one cheeseburger with lettuce and tomato, one chicken sandwich with lettuce, tomato and a slice of cheese, two handfuls of chips, two beers, a soda and a few scoops of ice cream. As a means of comparison, the BBQ Index parallels the Bureau of Labor Statistics as a data source. It selected the monthly data series “average price index, United States city average.”

For the first time, the average price for the hypothetical barbecue cracked three figures, clocking in at $103.

“On the whole, Americans still spend less of our wallet on food than our counterparts in most other nations, but that gap is closing across the board,” said Tom Bailey, senior consumer foods analyst for Rabobank. For 2025 the BBQ Index highlights a 10-person barbecue is 4.21% more expensive this year than last.

Prices have risen for many ingredients found in a traditional summer barbecue. However, despite the increase, the essential items for summertime grilling have not been hit as hard by inflation as some other consumer goods. For example, eggs, a small component of the overall food basket used to determine the Consumer Price Index, have recently begun to decrease in price after experiencing significant year-over-year price spikes.

Beef is beefing up
Rabobank senior beef analyst Lance Zimmerman said, “Beef supply, especially the fresh product Americans like to grill, is mostly domestic. Prices are up, but the reasons include a continued strong demand for beef despite economic concerns coupled with a years-long downward trend in supply.”

The beef cowherd has been decreasing since 2019, leading to supply constraints. However, consumers have maintained their beef purchases despite economic difficulties, resulting in higher prices due to the combination of limited supply and robust demand.

Zimmerman explained the most noticeable beef price increase happened in the first quarter, before prime grilling season began, largely due to production delays and trade disruptions over the winter. He said cattle processing peaked in 2022 and have since declined, but higher weights have mostly offset that decline in numbers.

An increase in retention of heifers for future breeding means a short-term drawdown on beef supplies that will continue upward pressure on beef prices, but that is laying the groundwork for expansion of cattle herds and price relief that should come within a few years, Rabobank reported.

One chart Zimmerman showed displayed the amount of time it takes Americans at various income levels to pay for a pound of ground beef. Interestingly, all income levels had to work longer to pay for that pound of ground beef. In beef, as with other commodities, there is an increasing market bifurcation, as lower-income consumers stressed by inflation look for value, while higher-income buyers still splurge on more expensive cuts. Altogether, it’s the best demand picture for beef since 1986, because despite price increases, retail beef is still a “relatively cheap lifestyle upgrade,” Zimmerman said, and ground beef prices are still competitive.

In response to a question in the Q&A session, Zimmerman said the recent suspension of all live cattle imports from Mexico will not have a noticeable impact on beef prices, since little of that meat was destined for retail consumers. About 82% of all beef consumption is domestic, with 95% of fresh beef in the meat case sourced within the U.S., Canada and Mexico supply about 6% each of imported beef, with the rest from Australia, New Zealand and Brazil. 

Ice cream consumption down
Dairy analyst Mary Ledman reported that while dairy prices have crept higher since 2023, overall consumption of dairy products has grown. However, consumption of ice cream per person is at its lowest level since the U.S. Department of Agriculture began collecting figures in the 1970s.

Prices of processed American cheese are up 5.5% since last year, but they could dip soon, she said. In 2023, each American consumed about 8.5 pounds of processed cheese. Cheese production is on the rise, leading to more production capacity coming online in 2025. Total cheese exports are up by 7%, but 95% of American cheese consumption is domestic.

Chicken prices remain high
Chicken prices remain high on strong demand, according to poultry analyst Christine McCracken, with wholesale prices up by 53% from a year ago. McDonald’s introduction of “McCrispy Strips,” a chicken-fingers product, and what would be a new set of “chicken wars” focused on the chicken finger/nugget space will keep demand strong. Breast meat prices will remain high, due in part to reliance on food service.

Limited production growth is also a factor, and it’s not because of avian flu alone, she said. A shift in chicken genetics has resulted in a “hatchability” problem and capacity constraints.
 

Exports of dark meat are down by 9%, but that’s partly offset by more demand from American consumers.

Beer—the most American beverage?
“Between relatively local supply chains and the ability of some multinational breweries to shift production of different brands from one location to another, beer prices for the barbecue will be less likely to be affected by tariffs, outside of some true imports,” said beverage analyst Jim Watson.

The beer supply chain typically operates on a local level, allowing major brewers to shift production of their “imported” brands to U.S. breweries in response to tariff changes. Over the years, the beer market has seen a trend toward “premiumization,” favoring upscale brands over budget-friendly options, resulting in price hikes that have outpaced wines and spirits.

Currently, consumer preferences are shifting toward hard seltzers and ready-to-drink cocktails. This could potentially lead brewers to grapple with an oversupply of inventory akin to challenges experienced by the competing wine and spirit producers, he said.

All growth in beer profits has been from beer drinkers moving up to more premium brands, while overall volume continues a slow and steady decline.

“Beer is much less a value proposition than with previous generations,” Watson said. “Volumes have not spiked even in response to price declines.” He predicts beer will lose shelf space to hard seltzers as beer distributors look to other categories. Excess wine and spirits inventory will put pressure on beer makers to lower prices. He sees no big tariff impacts on beer, but more in wine and spirits, more of which are imported.

RaboResearch Food & Agribusiness has about 80 analysts working in local teams across a worldwide network. All analysts have their own sector specializations—ranging from meat and fish to dairy, vegetables, fruit and floriculture, coffee and cocoa.

David Murray can be reached at [email protected].