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Get Ready for More Food Prices Inflation

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One of the trends we saw through the end of 2010 — and one that is continuing in 2011 — is food prices inflation. Food prices have been rising. From floods in Pakistan to drought in Russia to rising demand for food in emerging market countries, it seems as though higher food prices are inevitable. The USDA reports that food prices increased 0.8% in 2010, and that they could rise 3% to 4% in 2011. That means you had better be ready for what’s coming.

Among the foods expected to see an increase in 2011 are grains like wheat and corn. Wheat is used a great deal in cereal and other staples. Corn (or corn syrup) is used in a number of food items as well. On top of that, corn is used in livestock feed, and that means the cost of raising different animals for consumption is on the rise. Retail prices for beef rose 10% between February 2010 and February 2011, and pork prices are up as well. While meat prices rose in 2010, they are expected to increase at a faster rate this year. Because of the increased cost of feed, and the fact that a rising middle class in China and India are looking to add more beef, pork and poultry to their meals, meat prices are expected to rise at a fairly rapid pace.

Dairy prices are creeping up as well. CNBC recently reported on month over month inflation, finding that butter, coffee, potatoes and bread are also on the rise. Commodities in general are seeing an increase in price, and recent events can’t be helping, especially in terms of global supply chains. Even produce is starting to catch up. According to some news outlets, lettuce has doubled in the past few weeks, and other produce is rising as well.

What can you do?

Of course, with food prices rising, you need to be ready to come with strategies to help reduce your costs. Rising food prices can really affect your household budget, and you probably need to take action. There are some things you can do to help reduce your risk from food prices inflation:

  • Stock up: Buy some items in bulk. We buy meat on sale and freeze it. Depending on the meet in question, it can last six months to a year in the freezer. There are many food staples that can be frozen, bottled and bought by the case and stored. When something is on sale, buy more of it, and store it for use later. You can use a leftover calendar to help you use up items.
  • Grow your own: Consider which items you can grow in your garden. Seeds — and even starter plants — are fairly inexpensive. You can grow your own produce, and eat fresh foods for less. You can use container gardens if you have limited space. If you have you have more space, and a bigger garden, you can bottle or freeze your produce. If you are feeling really adventurous, many towns will allow you to raise your own poultry. You can save by butchering your own chicken, even if you don’t raise it.
  • Less processing: Look for foods that aren’t processed as much. While some foods might be cheap, there are a number of processed foods that cost more — and processed foods are likely to increase in price this year at any rate because many processed foods are made from corn. Plan your meals so that you can make more without relying on prepackaged foods. There are many 30-minute recipes, as well as slow cooker recipes, that can be used to help you prepare healthier meals when you have a tight schedule.

Food prices inflation is coming. With a little creativity, you can reduce your food costs, and protect yourself — at least a little.

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17 Responses to “Get Ready for More Food Prices Inflation”

  1. Echo says:

    Along the same lines as stocking up – another thing to do is just watch for the sales in your weekly flyers a bit more closely. I missed out on a sale on coffee, if I just waited a day I could have paid $8.99 for a large tin rather than $12.99 at regular price. The same store also had cereal on sale that I recently paid full price for.

    • skylog says:

      this is so true. if one has/is willing to spend the time, one can really cut food costs via weekly specials and coupons. i do not do nearly as much as i should, but i certainly help my bottom line by spending the time i do.

  2. freeby50 says:

    3-4% increase in 2011 wouldn’t be bad at all. 3% is average inflation rate.

  3. If you package meat using the FoodSaver you can actually extend the time in the freezer for quite a bit longer than with conventional wrap. My FoodSaver manual says beef and poultry can be stored 6 months in the freezer, but 2-3 years when using the FoodSaver. Fish will last 2 years. Vegetables last 8 months conventionally and 2 years with Foodsaver. Well worth the investment and you need a large freezer, and a method for rotating stock so that you don’t forget what you have stored. In my area they have a vegetable box program ($10/box for up to 60 pounds) called Market on the Move and I recently blogged how I processed 60 pounds of vegetables. Much of it went into the freezer. I also make use of my dehydrator to store excess vegetables. That is actually my favorite way because if the electricity went out for too long I might lose the frozen foods, but dehydrated foods would be okay.

  4. Many experts believe the USDA reports severely understate the correct (or real) inflation rate. As you point out many of the staples that make up our food are rising at much higher rates and are now making their way through the food chain. I would prepare for food inflation closer to 7-10% in 2011.

  5. Emilio P says:

    Some Starbucks coffees went up about $ 1 in the past 3 years or so; from around $ 3.5 to around $ 4.5; which to me is becoming more and more an occasional indulgence, and can’t really rationally justify paying that much for a cup of coffee.

  6. zapeta says:

    We stock up on when things are on sale and try to match up our coupons to keep our grocery spending low.

  7. Shirley says:

    My pantry/laundry room has shelves, built floor to ceiling on half of one wall, specifically for canned goods. They are two quart jars deep and one jar high. They seldom see mason jars of home canned foods any more, but work great for canned foods and are usually full. When an item falls to less than four, it is added to (usually with four more) at the next available sale.

    The top shelf is built to hold clear plastic gallon jars and spans the full wall and over the doorways. They hold dry beans, grains and pastas. Very seldom do I pay full price for canned, dry or baking goods.

  8. Strebkr says:

    It just seems that prices never go down.

  9. claro says:

    Watch out for smaller package size, which is a form of food inflation usually accompanied by a higher price.

    • Strebkr says:

      Speaking of smaller package sizes….Did I really get less Girl Scout Thin Mints in my little green box this year? I swear those boxes used to be bigger. Does anyone know?

  10. billsnider says:

    Most of you here are to young to remember the 1970′s inflationary days. Not fun. Hope food does not go up as fast as it did then.

    One side story. One year bread more than doubled. The reason was that the Russians had a bad growing year. They came in and bought most of the wheat futures before anyone realized what was happening. The result was stagering for about a year.

    Bill Snider

  11. Karen says:

    Today Hershey Chocolate Co. said it will have to raise the price of Candy Bars, it will be going up 10%, it’s due to their sugar, cocoa and the rising cost of gas to transport their products to the stores.


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