The other day I was listening to the radio in the car and caught an interesting story that I had to dig in a little deeper. According to data released this week by the US Department of Agriculture, the price of food is anticipated to increase about 3.5% in 2012. This is on top of the average 4% increase in the cost of food that we saw in 2011. The actual amount of the expected increase hinges on a few macroeconomic factors like the price of fuel, weather conditions, and the value of the US Dollar.

Basically, our economy is so tight right now that there is no buffer or reserves to smooth out any shocks in the system. For example, flooding in the Midwest this year has caused the price of grains to rise and we’ve seen breads and cereals increase 6% in price over this time last year. In talking to one local baker, the price of flour has been her biggest pressure point this past spring and summer.

Beef, pork and poultry prices are up 7.5 – 11% from this time last year due to reduced livestock herd levels caused by price inflation in the meat markets in 207-2008. Dairy and eggs are seeing similar price increase this year; as farmers reduce their livestock herds in order to keep up with the price of fuel and feed.

Wausau bulk food organic produceHow do these doom and gloom numbers relate back to us, the consumer? Our grocery bills are getting bigger, and restaurants are seeing similar pressures to increase their prices. Unfortunately with the soft employment market and stagnent wages, we aren’t seeing our income keep in line with the cost of living.

I have put together a few tips that will hopefully help you eat better and keep the cost of food in check.

  1. Shop Local. It may seem like the easiest way to reduce your food bill is to head to the super-mega mart and fill up your cart. While the big stores may have key items on sale, my research in local shopping has shown that their non sale items are often more expensive than in the locally owned store. Also consider the cost of your own time, I can get the weekly shopping done in half the time at a smaller store. If time is money, my savings really increase by shopping local.
  2. Buy in Bulk. Bulk food stores like the Planted Seed offer higher quality products at a competitive price buying in bulk and eliminating the excess packaging. So what if the spices don’t come in a fancy container, they’ll get poured into containers that fit my spice rack anyways.
  3. Avoid processed foods. This is an easy crutch for when the price of food pinches our wallet. Highly processed, packaged foods may seem cheaper than their individual fresh components, but this is a false economy; filled with fat, refined grains and sugars, and sodium, these foods are bad for you health. Consider an evening meal of Macaroni and cheese. A family sized box of process Mac and Cheese may cost $2.50, while you can make your own Macaroni and Cheese out of fresh cheese and milk for under $4.00.
  4. Organic doesn’t have to be expensive. Organic and locally produced foods have an advantage of less processing, additives, and pesticides. They are also grown in a sustainable method and provide a living wage for the producers. But organic foods sometimes are at a higher price point than their non-organic counterparts. But you can still buy organic and save money by buying produce in season and avoiding the nonseasonal items. Look for locally produced foods that don’t have to travel 1500 miles from farm to table. Buy in bulk when the price is right and preserve the bounties of the season. With a little bit of work on my part, I’ve canned enough applesauce and tomatoes to keep my family happy during the winter months.

Do you have any tips to stretch your food dollar and combat the rising prices of food? Please feel free to share them in the comments section.