Super Bowl inflation: Tips for keeping food costs low

Wells Fargo Chief Agricultural Economist Michael Swanson joins Yahoo Finance Live to discuss rising food inflation as well as tips to save ahead of Super Bowl weekend.

Video Transcript

- Well, while inflation is still up over 11% for at home food and over 8% for away from home food, consumers have a few bright spots to focus on for their Super Bowl parties this year. Wells Fargo Chief Agricultural Economist Michael Swanson joins us now, alongside Yahoo Finance's Brooke DiPalma. So a big welcome to you.

A lot of people wondering, chicken wing prices going down, but when you look at poultry prices a different story, though. Obviously, we know about the avian flu. But break down the differences in the type of flocks and how that's affecting poultry prices versus egg prices.

MICHAEL SWANSON: Well there are two different supply chains. You know, the egg producers have their birds, they're in the barns on a constant basis. And the ones that are producing the chicken wings, the chicken tenders, the ones we love for the chicken sandwiches out there, are different flock. They rotate very quickly. So they have not been hit by that avian influenza as much. And so it's really been a completely night and day type operation.

BROOKE DIPALMA: And let's just talk about quickly the price of those chicken wings. According to the report out this morning, they're down 22%. What would you say is the largest driver of that decrease in price?

MICHAEL SWANSON: Well, you know, there's a lot of opportunity to make money at the prices last year. And so we saw supply grow. We saw the cold storage, the frozen supplies really ramp up in anticipation. And so that extra supply is taken a lot of that fear premium out of the market. Plus transportation is a big deal. We've seen freight rates across the country drop.

You know, some of the softer economic activity, lower diesel prices have allowed us to get the food to different places at a much more economical rate.

- And I want to talk about things that consumers are not pulling back on. When you look at things like tortillas and potato chips, it's not pulling back on that despite what they saw with price increases last year, and even the double digit price increases that we saw in 2021. Why do you think we're not really seeing the needle move there? Why is demand still so high?

MICHAEL SWANSON: You know, it's kind of interesting. There's kind of a pricing dynamic where last year some of the things we almost see across the board on this report is things that were low last year. I've seen a catch up phase this year as the market is kind of filled in behind it. So we are seeing, you know, packaging, it's up across the board.

We're seeing some of the grains, particularly, you know, things that are like tortillas, which are corn-based have had a higher basic cost. And so we're seeing that catch up go in those markets as well. So it's kind of interesting how we have this two-step process going on.

BROOKE DIPALMA: And also to let's talk about some of those side dishes that have to go with those chips. Of course, guacamole, avocados, a top hit for Super Bowl weekend. Break down how much less they'll cost. And if consumers will see that in stores for this Super Bowl weekend.

MICHAEL SWANSON: Yeah, they're down 22% again. I just pulled the data this morning from the USDA, and they're down 23% from this period a year ago. And so it's interesting when we think about that last year, we were dealing with a snafu at the border. There was some back and forth between Mexico and the United States.

Once again, the higher freight rates. So this year coming to our rescue is a bigger crop down in Mexico and Peru and better transportation without that kind of uncertainty at the border. So we're seeing a much better supply and the retailers and the wholesaler have to pass that along because it's very competitive at this point.

- So then when you think about the top tips really keeping your Super Bowl food prices low and your drinks as well. We're seeing obviously that increase in prices when it comes to soft drinks. What's the best way to sort of navigate this space?

MICHAEL SWANSON: You know, it's kind of you have to spend money to save time. So one of the things we're seeing this year is kind of a change in the retail dynamic. you know, for the last few years, they've been struggling with supply chain and talking about stock outs. This year, we're back to full supermarkets. And they're kind of focusing on what do they want to feature.

And so I think if you're a careful shopper and look across two or three supermarkets or places to shop, you'll find some things featured here and not featured there. So spend your time, do a little prechecking, and you can probably find bargains in different spots at different times.

BROOKE DIPALMA: Let's talk about some of the drinks that people will be consuming next weekend. You noted in the report that beer prices have jumped dramatically compared to wine and spirits. But where can consumers get a discount when it comes to drinks this Super Bowl weekend?

MICHAEL SWANSON: Well, you know, spirits and wine, two different categories are only up 2% and 3%, respectively. And it kind of speaks to that global nature of some of those markets. The wine market in particular, we know is very global-- Australia, South America, Europe, all are great producers. And so we're dealing with the fact that strong dollar has brought in more wine. So maybe it's Sangria this year. I mean, it's going to be in Arizona. So let's put a little southwestern spin on the celebration.

- And I want to ask you about brand loyalty. Obviously, a lot of people were sort of trying to price compare when inflation was at its highest, starting to see it tipped down a little bit, not necessarily flowing all the way though, down to consumers. What are you seeing there?

MICHAEL SWANSON: Well, you know, it's just one of those timing issues, as you point out, is that, you know, it takes a while. There's three stages of getting food to us when we want to enjoy it, you know. there's the producers, the wholesalers, and the retailers. And what we're seeing is sometimes, you know, even though we see pretty dramatic drops at the wholesale price or producer price, it takes quite a lag to get that to drop at the supermarket. I mean, so we're really kind of watching that very carefully.

But once it starts, it's kind of an avalanche. And so it's kind of working. We're looking forward to 2023 being a much better food environment for everybody across the categories.

- It's certainly welcome news for everyone. Wells Fargo, their Chief Agricultural Economist Michael Swanson, and Yahoo Finance's own Brooke DiPalma, thank you both.