Top 5 Summer Price Increases Include Ice Cream and BBQ Favorites

June 21, 2011 — -- Today's summer solstice could lead not only to a higher sun in the sky but also to higher prices for ice cream and four other popular summer treats. Families might just run from ice cream trucks instead of chasing their melodious jingles.

Jim Conway, vice president of Mister Softee, one of the country's largest and oldest franchises of trucks that sell soft ice cream, said prices for the company's dairy ingredients have increased 20 percent since April.

"There's been an increase in prices in all the general dairy commodities, not just milk and cream but butterfat also," Conway said.

Ricky Volpe, research economist at the U.S. Department of Agriculture, said it's not just ice cream that is pricier. Overall, the cost of groceries could increase 3.5 to 4.5 percent this year.

"There's no retail food item for which I can say prices will not go up in 2011 relative to 2010," Volpe said.

Volpe said that's mainly because the weakened dollar has made U.S. food exports more attractive to other countries, which has increased international demand and consequently decreased some food supplies in the U.S., leading to higher prices here.

Prices for the following top five summer staples will increase:

1. Ice cream

While Conway said most of the owners of Mister Softee's 700 trucks have absorbed the increase in dairy costs, franchises set their own prices to cover their increasing costs.

"You can't expect mom, dad and two kids to come regularly to your truck if your prices are out of hand," Conway said.

To the dismay of the lactose-tolerant and advocates of June as National Dairy Month, dairy products are predicted to increase 5 to 6 percent in 2011 compared with 2010, according to the USDA Food Consumer Price Index.

"Dairy is a production-intensive industry, and it's one of those commodity groups in which every factor will have increased in price," Volpe said.

The increased price of corn that stems from the demand for corn ethanol fuel, for example, has affected dairy prices. Corn is a primary component of cow feed.

Conway said higher fuel prices and cold weather in the spring hurt Mister Frostee's business, with higher costs and fewer customers on the street pining for ice cream.

Extremely hot weather in the summer can also negatively affect demand, because many customers stay indoors in their air-conditioned homes, Conway said.

Mister Softee trucks, found in 18 states along the East Coast, sell ice cream from $2 to $3 per cone. Conway said except for the small percentage of Mister Softee trucks in tourist areas, the vast majority of franchises rely on regular customers.

2. Hamburger patties

Brace yourself, barbecue lovers. Beef and veal are expected to show the largest price increase this year of all the foods in the USDA's Food Consumer Price Index: 7 to 8 percent compared with last year. This year's forecast is noticeably higher than last year's actual increase of 2.9 percent compared with 2009.

Volpe attributes the rise in beef prices mostly to an increase in beef exports from the U.S.

"Any product that has beef in it will see an increase in prices," Volpe said, including summer steaks and filets.

Stephen Wyss, partner at accounting and consulting firm BDO, said the price pressure on beef may lead to more popular substitutes of beef, such as turkey, chicken or even bison.

"You'll also see various price points at which beef is sold in terms of quality," said Wyss, who is also a member of BDO's retail and consumer products practice group. "Previously, consumers may have been willing to spend more for a good cut of beef. Now they might shop from the lower end, or buy less prime cuts."

3. Hot Dogs

Ballpark dogs and bacon are no safe haven for meat lovers on a budget. The price of pork is predicted to rise 6.5 to 7.5 percent this year, the second highest increase behind beef.

The same factors affecting beef prices -- higher production costs and foreign demand -- have also affected pork price increases. Packaging and transportation costs can also affect food prices, Wyss said.

4. Fruits and vegetables

Summer watermelon, grilled bell peppers and other barbecue party favorites are expected to show price increases of 3.5 to 4.5 percent.

Despite major flooding across the U.S., Volpe said domestic supplies of crops remain healthy. However, fuel prices and foreign demand still affect the produce section of the grocery store.

Volpe said freezing in California and western Mexico late last year through February may have also contributed to an increase in the price of fruit and vegetables. Vegetable prices will increase even more than those of fruit. Broccoli, spinach and other veggies are expected to increase 4.5 to 5.5 percent from last year compared with 3 to 4 percent for strawberries, cherries and other fruit.

5. Soda

Quenching your thirst may be more expensive this summer.

Nonalcoholic beverages are expected to increase 2 to 3 percent this year compared with a 0.9 percent drop in prices last year. Sugar and sweets alone have risen 2.5 to 3.5 percent this year.

And artificial sweeteners, such as high fructose corn syrup, a major component of many sodas, could rise further with the increase in corn prices.