Up, Up and Away!

May 7, 2008

I am positive that you are well aware that the cost of food is rising, and quickly! According to recent figures from the Bureau of Labor Statistics figures show that during the 2007 calendar year, U.S. food prices increased by a whopping 4.9% – .8% higher than 2007 inflation rates and 2.8% higher than food prices increased in 2006. And most food folks would agree that we ain't seen nothing yet!

In the past, agricultural commodity prices tended to be volatile, with an overall decline trend, because they were supply-driven. Technology and productivity improvements in farming increased agricultural yields to meet supply, keeping prices down. Today, higher fuel prices are increasing the cost of transporting commodities, while various weather conditions and trade issues are currently contributing to lower supply. The result is higher prices across the board.

In the U.S., staples like milk, cheese and bread experienced especially marked hikes, with poultry, fruits and vegetables, cereal and meats following close behind. Internationally, increases in the prices of dairy and grains pushed the food price index used by the Food and Agriculture Organization of the United Nations up by almost 40% over the last year. By comparison, in the previous year period, the food price index was up only nine percent.

With global commodity stocks at historic lows, a growing demand for food, feed and fuel, tight supply, and no plan for increased agricultural productivity, this higher price phenomenon is likely to continue. The International Food Policy Research Institute estimates that global cereal prices will rise 10 to 20% by the year 2015.

So what can you do?

Here are my 5 basic tips to keep on budget:

1. Make a shopping list and stick to it.
Create the ultimate shopping list by taking receipts from the past month, list all the groceries you regularly buy by name on a spreadsheet. Then go thru the fridge, freezer and cupboards and look at what you have, then cross off the week's list what you don't need. You'll cut your spending by 15 to 25 percent by not buying more of the same.
2. Use coupons.
Don't think you're above clipping coupons from the newspaper, magazines or even online. The average coupon value is almost one dollar! Also, put your kids in charge of coupon cutting and gathering, since it teaches valuable lessons about money, and be sure to give them a percentage of what you save as their allowance.
3. Sign up for frequent-shopper cards.
You will end up giving up brand loyalty because you'll be going for whatever is on sale. But there is no doubt you'll save money.
4. Buy the store's own brand.
Most stores offer a 100-percent, money-back guarantee on their products and most of today's store brands are of the same quality or exceed the quality of name brands – this alone can save you 15% or more.
5. Buy produce in season or from local growers.
It's tastier, more nutritious (as it had a longer growth cycle and was picked when ripe) and less expensive. For those fruits or veggies that are not in season, head to the frozen food case. Frozen and canned fruits and veggies are picked and processed at the height of flavor and can be up to 50% less than their out of season imported counterparts.

Share your tips on how you can save $$ on your grocery bill and we will select 5 people at random and send them a SupermarketGuru canvas tote bag as a thank you!

Posted on Thursday 5/8 by bob
Phil, these are terrific! Thanks. Like to add one more - leave the kids at home!!!! Bob