How to Offset Food Inflation

Food is necessary for survival, but the cost of eating is rising. According to the Consumer Price Index, grocery prices have risen 2.7% from June 2011 to June 2012. Though a slight change of inflation rate seems to be lower (2.3%) when comparing prices from January through July 2012, research economist Richard Volpe warns of serious impacts caused by severe drought.

In addition to drought impacts, flooding in Australia earlier this year and concerns over Egypt are affecting the global commodities market. Prices of corn and soybeans influence the cost of several areas in the food-making process. Be prepared to open your wallet wide in the months ahead as food costs climb unless the following steps are taken to offset inflation.

1.  Create a home food storage:

Buying now will help to reduce the need to buy in the future when prices are higher. Take advantage of sales and promotions to buy in bulk. The use of coupons coupled with sales can net savings of up to 50% on current prices. Certain staples will keep for many years if stored properly. Items such as dried corn, beans and fruit can last more than 10 years. Flour stored in an airtight container will last 10 years, and dried fresh vegetables such as onions, carrots, and peas will last for several years as well. Canned fruit and vegetables will last three or more years.

2.  Reduce processed food expenditures:

Because the cost of development, packaging, and promotions are passed on to the consumer, the cost of processed food can be double that of homemade. For instance, depending on the type of bread being purchased, prices may range between $1.99 and $4.99 per loaf. A homemade loaf of the same kind will cost between $.85 and $2.50. Investments in bread machines, ice cream makers, and pasta machines can end up saving you some serious cash.

3.  Beware of packaging:

Food corporations are camouflaging price increases by putting less product in smaller packages while continuing to charge the same price. Make sure to check shelf labels for the unit price. One product may appear to cost less due to packaging, but an inspection of unit prices will reveal the deception. This is equally important when choosing whether to buy a larger size of the same brand. The days of getting more for your money by buying larger is past. Though bulk prices are usually better, when it comes to individual packaged foods, the smaller size can yield better price points.

4.  Forget pre-packaged snacks:

Instead of buying lunch box sizes of chips and pretzels, buy larger bags and fill your own small plastic baggies. Invest in some low cost plastic containers for transporting homemade cupcakes, brownies, and jello.

5.  Know your meat prices:

Meat prices fluctuate. The price of ground beef has risen almost 7% in the last year but pork prices have dropped 1%. Knowing the per pound cost and comparing the differences can help you make decisions about substitutions.

6.  Buy seasonal and local:

Buying produce from local farmers when it’s in season can save you a ton of money. Transportation technology has made it possible to buy just about everything at any time of the year but those costs can increase the price by as much as 3.4 per dollar.

7.  Buy generic:

Being loyal to name brands can increase your grocery bill by up to 30%. Substituting store brands can save as much as 60% on individual items, according to the Private Label Manufacturers Association. The secret is that many national brands also produce store brands, but there’s no added cost from advertising and promotional expenses.

8.  Eat at home:

The home meal vs dining out debate has been being waged for years. Those opting to dine out often cite the time factor when making their determination, but unless the time saved is being used to generate substantially more income than that spent, eating in wins hands down. If you choose to dine out, there are ways to reduce the cost. Order “specials” that are reduced from their regular menu price. Use coupons that can be found online or in your local newspaper. Websites like Groupon and LivingSocial offer considerable deals that can be printed out. While online, search for gift certificates to your favorite restaurant. Often these certificates are offered at 80-90% less than their face value.

9.  Make the most of leftovers:

Besides freezing for another day or brown bagging leftovers for tomorrow’s lunch, become creative. Many leftover items can be combined to create a hearty stew or one dish meal that won’t result in your family groaning, “Oh, no! Not again!” Delish.com offers ideas for leftover make-overs and more than 100 recipes designed for cooking on a budget.

10.  Plan ahead:

Before heading out to the grocery store, plan your meals for the week. Having a list of specific items for purchase will help cut back on impulse expenditures. While meal planning, make sure to design meals around local sales and coupons.

Following these outlined tips will result in big savings. There’s no reason eating has to take a giant bite out of your family budget.