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Get Ready for More Food Prices Inflation

One of the trends we saw through the end of 2010 — and one that is continuing in 2011 — is food prices inflation [3]. 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 [4] 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 [5] 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 [6] 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 [7] 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:

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