10 Things That Will Be Cheaper During the Summer of 2016
Shoppers have grown accustomed to the fact that prices generally only head in one direction—up—especially during the summer, when businesses know that people are more willing to open up their wallets. But for a variety of reasons, this summer consumers should catch a break on prices for groceries, travel, and more. Here are 10 purchases that will be cheaper during the summer of 2016.
Milk prices have dipped sharply, not only in America but around the globe. In Wisconsin, for instance, wholesale milk prices have reached lows not seen in at least six years. At supermarkets, the average price for a gallon of whole milk was down 7% compared with the year before, according to the Bureau of Labor Statistics (BLS). Prices have dropped especially precipitously in Europe, as Reuters reported, with raw milk prices decreasing an average of 11% year over year. In places like Germany, milk is now sometimes cheaper than mineral water at supermarkets.
There are several reasons for plummeting milk prices, the simplest of which is oversupply. A few years ago, when the combination of drought and surging demand caused beef prices to soar, farmers focused on increasing their cattle supplies. They've now caught up and then some. The surge in the cow population not only affects the supply (and therefore, price) of milk, but as you'll see below has an impact on a wide range of other grocery staples.
As the Wall Street Journal put it so colorfully, America is currently sitting on such a huge glut of cheese "that every person in the country would need to eat an extra 3 pounds this year to work it off." That's a lot of cheese. The cheese oversupply is closely related to the milk oversupply—farmers have to do something with all that milk—and a strong U.S. dollar has made it difficult to export the excess cheese. The market research firm IRI reported that retail cheese prices are down 4.3% over the past year, and prices are expected to keep dropping in the months ahead.
For essentially the same reasons cited previously, beef prices have been dropping throughout 2016, with the retail price of a pound of ground beef down to $3.82 in April, according to BLS data. That's a drop of nearly 10% year over year, and dirt cheap compared with the going rate of $4.71 per pound in February 2015.
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Legalized recreational marijuana is no longer a novelty in states like Washington and Colorado. Both states approved legal non-medicinal weed in 2014, and as studies cited by the Washington Post demonstrate, suppliers and sellers have increased their efficiencies to the point that prices have steadily dropped. In Colorado, recreational marijuana prices decreased as much as 40% during the first 18 months of legalization. In Washington, prices dipped from $25 or $30 per gram when it was first legalized in July 2014 to around $10 at the start of 2016, and $9.32 in March.
Prices are expected to keep getting incrementally cheaper for the foreseeable future. One expert estimated that prices have been decreasing about 2% per month, meaning that this summer marijuana could cost as much as 25% less than it did the year before.
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A year ago at this time, a bird flu outbreak was wreaking havoc on the nation's chickens, with egg-producing hens the most likely to be affected. As a result, egg prices soared. After hitting record highs last August, however, the chicken supply has recovered and egg prices have tumbled 75%.
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Yes, consumer gas prices have been rising week after week since hitting a national average low in the $1.70s in February. And yes, prices are projected to keep rising at least into early summer. Even so, in a historical sense prices at the pump should be incredibly cheap this summer—likely 40¢ to 50¢ per gallon less than the year before, when most drivers considered gas to be a bargain. As GasBuddy analyst Patrick DeHaan put it recently, "It should be made abundantly clear: this summer will likely be the cheapest summer at the pump in the last decade or longer."
Whole Foods has periodically rolled out some lower prices in order to try to convince shoppers its "Whole Paycheck" reputation was unwarranted. But for the most part, the stores' prices remain high and consumers consider it a high-end supermarket—in some cases, one that overcharges people above and beyond already-high prices. To expand beyond the prototypical wealthy, health-focused customer, Whole Foods is launching a new low-price, millennial-friendly grocery model called 365 this summer.
The first 365 by Whole Foods location opens in greater Los Angeles on May 25, and though the store will have a much smaller size and a more limited selection than a traditional Whole Foods, it will feature much cheaper prices as well. Whole Foods hopes that shoppers view 365 prices as competitive with Aldi, the ultra-low price grocer that just so happened to expand into California last year. Though only three 365 by Whole Foods locations are scheduled to open in 2016, the company has a total of 19 new stores in the works.
Thanks to cheap fuel prices, the airlines have been able to decrease flight prices while still making monster profits. The flight search app Hopper estimates that domestic airfare prices will be down 12% compared with the summer of 2015 and down 20% versus 2014.
Though pork prices aren't declining quite as significantly as beef or eggs, cheap prices for grain and corn used to feed pigs have led to decreases of 3% to 5% for most pork products, according to the BLS. The one exception is bacon, which has been hit with slight price increases because, well, people really love bacon.
Thanks to the strong U.S. dollar, American travelers can take advantage of increased spending power almost anywhere outside the national borders this summer. Travelers can expect to save 25% to 30% in Canada on most purchases, while a GoBankingRates.com study shows that countries like Argentina, Australia, Brazil, and most of Europe will also feel like virtually everything's on sale for American visitors.
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