What has the Drought Done to Food Prices?
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If you’ve gone grocery shopping lately, you’ve probably noticed prices creeping up. In fact, the U.S. Department of Agriculture estimates that the average family of four with a 2- to 3-year-old child and a 4- to 5-year-old child on a moderate-cost plan spent about $861.60 on groceries in June 2012, compared to $836.20 last year.
But Teri Gault, CEO and founder of grocery savings website TheGroceryGame.com, says we haven’t seen the worst of it yet. “Some experts are saying they believe grocery costs are going up 10 percent across the board,” she says. “There’s a six- to nine-month lag. Rather than raising prices suddenly, producers have talked about raising prices incrementally.”
This summer’s drought and earlier-than-usual cattle slaughtering (due to rising feed costs) could haunt us at the checkout for months to come.
Gault offers her recommendations for coping with rising food costs:
Know your sizes
Some food producers have maintained their prices but shrunk packaging sizes, so you’re paying the same but getting less food. When buying packaged foods like peanut butter, milk or ice cream, check the number of ounces on the package so you know if you’re still getting a good deal. Fortunately, though, “a lot of the store brands have not shrunk,” says Gault. “Name-brand peanut butter has gone down, but (certain store brands) have stayed the same. It’s a good option, especially when it’s on sale.”
Shop on a 12-week cycle, not a weekly basis
According to Gault, “The whole mindset of shopping each week for only what you need doesn’t work because of the 12-week sale cycle.” Rather than dashing out for butter or bread when you run out, Gault suggests buying only when it’s on sale, typically every 12 weeks, and keeping your pantry stocked. “Except for fluid milk and fresh produce, things have a long shelf life,” she adds. “Yogurt and eggs last five weeks. Think of it as an investor.” Any time there’s a limit on an item (for instance, if you can buy a maximum of 10 boxes of cereal for $1 each), Gault says that’s usually a loss leader for the store, so the price is as low as it’s likely to go.
Store food carefully
When you’re stocking up every 12 weeks, food storage becomes especially important. Gault suggests writing the date on packaged goods in permanent marker so you’ll remember to use older items first. Most foods (but notably not ham) can be frozen for later, but don’t just toss them in the freezer, says Gault. When freezing fresh berries for smoothies or pies, wash them first and lay them out on a tray or cookie sheet so they won’t freeze in clumps. Once they’re frozen, toss them in a plastic bag and store in the freezer. When freezing meats, make sure the package isn’t torn and write the date you’re placing it in the freezer on the package. With any frozen item, “if you start seeing crystallization, it’s time to eat it,” adds Gault.
Cook more and freeze extras
Cooking from scratch is often cheaper than buying prepared foods, so Gault suggests cooking a double batch of lasagna or a casserole and freezing the extras in an airtight container for nights when you need a quick meal. Also, a slow cooker can be a budget cook’s best friend because it makes quick and easy stews, chili and other items. Plus, as Gault points out, “cheaper cuts of meat will be juicy and tender” after several hours in a slow cooker.
Groceries can add up to a large part of your budget. Because food is something you can’t live without, rising food costs can eat up money you need to use toward other goals, such as paying off debt or saving for retirement. If the high price of food is making it difficult for you to stick to your budget and stay on track with your savings plan, you may want to check out these tips on how to make a personal budget.
For more information on smart ways to manage your financial needs, visit Allstate.com’s section on Managing Your Insurance and Retirement Throughout Life.