Monday, September 19, 2011

Higher grocery prices

There has been a lot of discussion in the blogosphere lately about how to deal with higher food costs.  This has ranged from grocery prices in general to how to eat healthier including using more organic foods while keeping grocery costs down.  I have also had the sense that grocery costs have risen although, since I only shop for two and also buy all paper and household products as well as wine at the grocery stores we use, it was hard to tell how much of the increase was due to food costs.  So I decided to do some research.

The US Dept. of Agriculture initially estimated that food-at-home (grocery store) prices were forecast to increase 3.5 to 4.5 percent in 2011 while they only increased 0.8% between 2009 and 2010 which was the lowest annual inflation rate since 1967.  The also projected that 2012 would see 3 to 4 percent increases in food-at-home prices.  Read more about their projections and historical data starting here.

When you look at a specific months data you can see though that not all grocery prices went up by the same percentage (check out this data).  So while everything has increased (a 5.4% increase in food-at-home costs July 2010 to July 2011), your own costs will be determined by what you buy.  For example, the price of eggs increased 13.3% in 12 months (although their price had dropped 14.7% in 2009) but poultry only went up 2.7% in the same time frame.  (Does raise the old chicken or egg question in slightly different form - LOL.)  Beef & veal prices however went up 9.3%.  In the produce area, fresh fruit 7.9%, fresh vegetables 5.9% and processed fruits and vegetables 3.3%.  Cereals and bakery products increased 4.3% and non-alcoholic beverages 4.1%Of course these are averages and price increases will vary by store and probably by region of the country.  For example I find our fresh produce prices quite a bit higher than they are in areas that grow a lot of produce. Bottom line is that if you eat a lot of beef and eggs you will feel the price increases more than if you eat mostly poultry and processed fruits and vegetable.  Either way prices have increased and are projected to continue to increase at least through 2012. 

So I started wondering how food costs as a portion of income compare between the US and other parts of the world.  The most recent data I could find appears to look at relative expenditures on food for 2009 (here) but also has a helpful discussion of the average increase in food costs per household under specific inflationary scenarios.  Still, the percentage of household expenditures going to food was lower in the US at 6.9% than in any other country.  Not that this helps anyone who is struggling to pay for food out of a stretched household budget.

I already do a lot to control our food costs (shop on the day I can receive the 5% senior discount, clip newspaper coupons for items we use regularly, check out store flyers and shelves for specials, shop with a list, eat fresh foods in season mostly, shop once a week, stock up on sale items within reason, buy store brands if cheaper) and rarely throw food away.  These are long term habits that don't take much time. In the past I haven't found it worthwhile to look for coupons online or stock up in major quantities and I don't garden preferring not to deal with clay soil and many varieties of rodents (squirrels, chipmunks, voles and moles primarily) to produce my own food - again because I only shop for two.  In addition, we very rarely eat beef, although we do eat pork, eggs and chicken,  we love fresh fruit and vegetables, and buy cereal, frozen breakfast foods and bread.

So looking at the data, what else can I do to manage our food-at-home costs?  Personally, I am going to continue to buy primarily fruit that is in season and priced lowest out of the choices (exception is apples for husband's lunches), buy more frozen (e.g. processed) vegetables and fruits, limit pork purchases, and continue my other cost control measures.  If we were having a hard time paying for food I would stop buying even generic cereal and make oatmeal every day, fix even more meatless meals relying heavily on legumes and the cheaper vegetables like carrots, etc.

What new steps have you taken this year to manage your food costs?

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