Wednesday, February 06, 2008

Food Inflation

I just got a letter in the mail yesterday from the Food Bank in our area. Because a neighbor works there, we've been donating both food and money to the association. From talking with her, she thinks the increase in people using the food bank has spiked in our area.

From the letter, it appears that more people are using the Food Bank because of rising costs. But I don't think that's the whole story. Where we live, people will pay for heat first, then go to the food bank for food. Since last year there was a 40% increase in natural gas, which translate to an appropriate raise in that budget category. Where to cut? Food.

But food prices according to this letter have skyrocketed. The letter says that in 1 year food prices in our are have gone up 5.7%. The largest 1 year increase in years. Milk is now $4/gallon and eggs are up nearly 50%.

I was pretty sure that food prices had risen since January 2007. But seeing it calculated in black and white mad me worried. A 5% increase in food is a lot when you consider other budget areas are rising faster. Usually food is the first place people try to cut, but what happens when they are not able to cut because the prices have caught up to their cuts?

Do you think you'll be able to cut your food budget by 5%/year? If this keeps up, and budget areas like heating, fuel, health insurance increase 10-20%/year where would you cut from?

My goal this year is to keep our food costs about the same as last year. We spent on average $300/month, but so far this year I am trying to get us down to $250/month. I have no idea if this is realistic or possible. But last year I started coupon shopping again, and while I saved $50/month in toiletries, cleaning supplies, etc, I feel the $50 went straight back into the grocery budget.


MorethanMom said...

One of the things that saves me money is couponing and combining this with drug store reward programs. I pay next to nothing for shampoo, cleaning supplies, toilet paper, detergent,make-up,soap, etc by shopping CVS with their ECB bucks. Most drugstores have something similiar, and if you combine a sale with coupon with ecb, this will save you money.

Also, I volunteer at as well as purchase from a food co-op. This is brand name food at a 40% discount. It's not a food bank, but as food prices have risen there has been quite an increase in the number of food packages ordered. Some of the major food co-ops are Share, ServeNewEngland, and Angelfood. I believe they all take food stamps, as well.
But yes, between rising oil costs, gas, and food prices, hard choices are being made.
There are options out there for people who make too much for Gov't assistance, but not enough to live well. The problem seems to be that many don't know of them, or are too proud to take what is wrongly seen as "charity" or "welfare".

Jim said...

I think people always try to cut back on food first, but food should be considered first before anything else. If you can't afford to feed yourself, how can you go to work to earn money just in order to pay the bills? I have noticed an increase in food prices but I am also a savvy shopper and a coupon person. It is not a problem for me to buy $200+ worth of groceries and pay less than $100 at checkout.

I think the partial reason food prices have increased is due to the issue of importing foreign oil which is causing gas prices to go up. The result was developing more ethanol and other biofuels. The impact of burning something normally used for food is causing an increase in everything else. Meats, milk, eggs, even bread, some of the most basic staples are getting very expensive. I think fast food also drains people of their money more than anything else.

Regarding food pantry I think the idea is good as long as people don't abuse it. If you have the same people going shopping there all the time, it has become a dependency. Some people by nature want someone else to solve their problem, which doesn't go away until they deal with it. Food co-ops are good too and similar to the bent and dent stores you can get canned stuff for a dime. I like bulk buying stores like Aldi and Sams Club.

Living Almost Large said...

I already use CVS for all non-food products. I no longer buy anything non-perishable and some perishables from there. But the problem I see is definitely people are going to become dependent.

I am not that fond of the angel food packages, because it's mostly processed foods. If I were desperate I'd take it. I don't buy most of the food, except veggies/fruits in the package.

I think there are tons of hard choices to be made.

minimum wage said...

Many food banks have limits on how often you can get food from them, so people might go there two or three times a year but not every month.

A lot of people don't have an Aldi's or Sam's Club nearby - last I checked, the nearest Sam's Club was a few hundred miles away. There was an Aldi last place I lived but not where I live now.

There is a Costco in town, and I haven't been there, but I've heard that Costco is enjoying booming business these days.

Living Almost Large said...

I hope that's not true about the food banks.