Hot Dogs Over Steaks This 4th of July in Bad Economy

Americans will be throwing more hot dogs and hamburgers on their backyard grills rather than higher-priced meat like steaks this July 4 U.S. Independence Day holiday as the recession and high unemployment crimp celebrations.

"It will be the cheaper cuts that will take the majority of the business," said John Kleist, analyst with the McHenry, Ill-based advisory firm Allendale Inc.

"We would do well to say that meat movement over the holiday was decent. That is the best we can hope for," said Kleist.

High unemployment and the recession are controlling people's spending decisions, and as a result the cost and size of holiday meals will be down from years past.

"I think the expectations are rather low after the mediocre Memorial Day," said Jim Robb, agricultural economist at the Livestock Marketing Information Center.

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Celebrations during the U.S. Memorial Day weekend at the end of May, Independence Day, and the U.S. Labor Day weekend in early September are often good for meat sales, but this year that business will likely be down.

"I think the economy is going to have a negative effect," said Len Steiner, a principal with the retail consulting firm Steiner Consulting.

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Beef and Pork Sales Have Struggled

Beef and pork sales, which are normally robust in the spring and summer for barbecues, have been slow as consumers either have less cash to spend or worry about their jobs.

The slow meat sales have been particularly bad for cattle and hog producers.

They have struggled with high feed costs for nearly a year and now, because of the slow meat sales, cannot get profitable prices for their livestock.

The U.S. unemployment rate hit a nearly 26-year high of 9.5 percent, with the Labor Department on Thursday reporting the loss of 467,000 jobs—100,000 more than Wall Street economists had expected.

"The unemployment rate that came out was not good at all," said LMIC's Robb.

Auto companies, banks, and newspapers have laid off thousands of workers. In Chicago, the Public School District said recently it will lay off 1,000 administrative and clerical staff.

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"Until the economy improves, we are going to see pressure on the quality meats. That is keeping pressure on livestock prices," said Ron Plain, agricultural economist at the University of Missouri. "People are just wanting to eat cheaper."

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