Food prices have spiked to record levels since bad weather in many parts of the world led to millions of tons of crops being damaged. In 2010 there were floods in Australia, droughts in Russia followed by record snow storms in Canada and the United States. Add to that record high gas prices which are expected to continue to rise and we have the perfect storm for high food prices.
One of the basic things that I learned in economics was how supply and demand affects prices. This year we will have reduced farming yields and high food transportation costs with a growing population competing for food. My economics professor would be drawing curves all over the place, but there is a human consequence to these conditions.
Not only are food prices rising, but many people can not afford these new prices. According to the World Bank, the rise in global food prices may have already driven 44 million people below the extreme poverty line which the World Bank defines as living on $1.25 a day. That’s half of the price of a one way subway ride here in New York.
The World Bank goes on to say that a rise of just 10% in food prices will push an additional 10 million people below the poverty line. This rise in food prices affect not just people outside of the U.S., but right here in our own back yards. I know that I have seen the lines at my local church growing longer and longer every month for the past year or so.
Even though you think that you might not be personally affected by rising food prices, or if you think that your local food prices have not risen, think again. While prices have remained the same, have you looked at the average package size of the products that you buy?
Shrinking Ice Cream
Manufacturers have been making things smaller but charging the same price. I’ll give you two very easy examples: two liter was the standard size of a soda, it’s now fallen to 1.5 liters; ice cream used to come in standard half gallon containers but the size has fallen to between 1.5 to 1.75 quarts. I’ve seen cucumber prices rise from 3 for $1 to $0.89 EACH in the space of two weeks. According to the grocer, they are being charged more for delivery and must pass the increase on the customers.
What can you do to combat this rise? Try to buy products that were grown closer to your area, grow some of your own food, shop in bulk, avoid brand names, and use coupons.
Is there anything that your family does to combat rising food prices?
This post was included in the Carnival of Personal Finance #305 hosted by Financially Digital.
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I grow my own garden because I love veggies. Now with the prices starting to get outrageous, I will save a lot this summer.
That is a good scheme by the Manufacturers to charge the same price but just make things smaller. I am sure that a lot of people aren’t going to catch that!
The shrinking package phenomena is growing. Lots of things now come in slightly smaller packages and people don’t notice. Can you imagine if you paid the same but your gallon of milk was missing a few ounces or your dozen eggs was missing one?
In the last six months or so I have started 1) Keeping a price book 2) Watching for sales and 3) Combining sales with a coupon whenever possible. Doing this has allowed me to cut our grocery bill significantly, but it has also caused me to see just how much less we’re getting for our dollar – just as you pointed out.
I’m not a gardener, but I love going to farmer’s markets and roadside vegetable stands in the summer. This year I might also try participating in a CSA for the first time.
Julie – support your CSA! We had one and LOVED it, and now that we’re off food stamps I’m going right back to it. Small farmers (understandably) often don’t take food stamps so we couldn’t participate during that time. It’s a bit ironic that we’re dropping the program just as food prices spike!
We eat a lot of rice and beans, and buy in bulk whenever possible. That helps. I also hit up the bread outlet store once a month and freeze bread for the rest of the month, which is a great way to get extra free loaves at our outlet.
CSA’s are an awesome way to get some very fresh fruit and support your local community. I have a small garden so I don’t use a CSA but from what I’ve seen they do a good job.
I do loads of things to shave expenses and hold costs to a minimum.
– Coupon & stockpile some items in 12 week cycles (when groceries are on sale)
– Never pay full retail for ANYTHING
– Cook rollover meals — Cook once and prepare meals 3 ways out of a roast or chicken.
– Freeze leftover veggies for soup
– Pay cash and only use credit when there is 0% financing
– Do maintenance on house/car etc so that there are no major surprises
– Barter/trade knowledge, skills, abilities with others
– Cold water wash full loads of clothes
– Hang/line dry clothes as much as possible
– Run dishwasher only when full
– Recycle/reuse/garage sale or donate for a tax deduction
– Grow a garden. Freeze excess or trade with others to have wider variety.
– Unplug everything when not in use
– Keep coils on freezer and refrigerator clean
– Keep dryer lint cleaned out of dryer and vent hose
– Use GasBuddy.com to shop for best gas prices
– Keep car washed, tires inflated, engine tuned for best gas mileage (empty out excess cargo too!)
We have found over the years it is a combined effort across the board to hold down expenses that works the best. It is a choice of lifestyle that you live over the course of time that has helped us get out of debt, stay out of debt and prepare for our retirement. You end up learning that the shift in savings in one area will help you achieve your goals in another.
Ginger
AttentionDealShoppers.com
What an awesome list!!! I might print this out and check things off.
Seems like a perfect storm for food prices and I don’t think our week dollar is helping the situation either. Switching to generic food brands, utilizing coupons as much as possible and food portioning are a few things I can think of.
Rising food price is one of the factor behind all the unrest around the world right now. Their food price have gone up 30 – 50% and people are sick and tired of it. Here in the US, the cost of food in the grocery store are comprised mostly of transportation, marketing, and other non raw food cost so our total price is less affected.
Personally, I barely notice the increase so far, but we try to buy on sale as much as possible.
The price isn’t up, but the packages are smaller. It’s a sneaky way of rising the prices because you won’t notice it.
Yes, the increase in the food prices globally is a matter of concern. Higher prices of daily using commodities will strike the common man heavily and thus poverty will be on the rise. The suggestion of growing vegetables and other pulses (if possible), in the back yard or terrace will reduce the cost of food. But I was wondering how far this is possible.
My family has been practicing frugality even before the global hike in food prices. It is our contribution to the movement of living simply to save the environment and to create a healthier and better life than the one offered by a consumeristic society.
One of the best things we did was to organize friends and neighbors into a group so we can practice collaborative consumption. We buy our supplies in bulk and split the cost. We share some durable equipment like a lawnmower. Since we use an online tool called SplitStuff splitstuff.com organizing a project or a purchase is very easy.
Yes, the price increase created the impetus to practice cost-cutting and frugality. But I hope that these become part of our lifestyle rather than just temporary solutions to a problem.
The best thing I like to do is eat less. I lose weight, feel more fit, and therefore run faster and win more on the tennis court! It’s a win-win!
Sam