It is getting harder to put food on the table, not only for low-income households but for middle-class families as well. Prices have soared lately not just at high-end grocery stores, like Whole Foods or QFC, but also at large chains known for their price competitiveness, like Safeway, Sam’s Club and Costco. And nearly all food products are affected by the dramatic price hikes.
Since the year 2000, the last time we saw relatively low food prices, the cost of wheat has more than tripled. Corn is now twice as expensive. The price of rice has increased by more than double just in the last three years. And for dairy products, meat, poultry and edible oils you have to pay significantly more than only a year ago.
A ‘perfect storm’ scenario
According to the Consumer Price Index (CPI), these trends are expected to continue for the foreseeable future. A number of key factors behind the price increases have been identified. All taken together, they potentially form a “perfect storm” that could seriously impact people’s ability to afford quality food for quite some time.
For example, corn prices have risen due to use for ethanol as an alternative to fossil fuel. Higher revenues from corn have caused farmers to move away from wheat and soybeans, thereby reducing supplies and increasing prices for those crops.
Especially price increases for corn can have a wide ripple effect because corn goes into many processed foods and is also an important component of farm animal feed, which in turn drives up the costs of beef, pork and poultry.
Global stocks of agricultural commodities in general are depleted because of crop failures, droughts and flooding in many parts of the world where major producers are located, most notably in Eastern Europe, Russia, the Ukraine and Australia.
Higher demands for better quality foods in China and India with their mega-sized populations are putting more pressure on global food markets. The weak dollar enables many more countries around the world to import agricultural goods from the U.S., driving up costs here at home.
Ever-rising energy costs affect all industries and agriculture is no exception. Record crude oil prices force growers to spend more on fertilizers, harvesting and transportation. At the production-, wholesale- and retail levels, expenses for processing, warehousing, packaging and distribution all go up and get passed on to consumers in form of higher prices.
The healthiest foods are the most expensive
Don’t blame your local farmers (especially the small farm operators), since they don’t get rich because of higher food prices at the grocery store. On average, about 20 cents on the dollar for all foods are the farm share. It’s much less for highly processed foods where the end products bear little resemblance to the original commodities.
For instance, an 18 oz. box of breakfast cereal contains less than 5 cents worth of corn (most expenditures come from processing, packaging, advertising and distribution). That is why price fluctuations in the commodity markets can be more easily absorbed by manufacturers. By contrast, price increases for less processed items, like milk, eggs, fruits or vegetables, impact consumers much faster. Diminished or failed crops can lead to dramatic price changes over night.
If consumers respond by cutting back on fresh foods, growers can find themselves quickly in a tight spot: They either have to keep selling low (often at significant losses) despite of higher demands or risk sitting on highly perishable goods they can’t get rid of because people can’t afford them. The same is true for grocery stores. Fresh foods have a much shorter shelf life than processed items. Everything that can’t be moved before it’s spoiled must still be paid for – ultimately by consumers in form of markups.
Eating healthy without breaking the bank
Still, that is of little comfort for the rest of us who want to eat healthy – and that means including plenty of fresh produce in our diet – but have to stay within a reasonable budget. Unfortunately, the saying, “you must be wealthy to be healthy,” rings more true than ever. While there is not much we can do as individuals about changing supplies and demands on the global stage, there are a number of smart steps we can take to stretch our dollars and cents a little further. Here are a few ideas you can implement right away:
• Cut back on expenses for fresh foods by taking advantage of sales. Fresh produce is highly perishable. Whenever supermarkets are overstocked on certain items, they must lower their inventory fast by reducing prices. Unfortunately, following sales events can be a bit time consuming, but if you stop by your grocery store two or three times a week, you should be able to benefit from some of the better offers.
• Plan ahead. Try to use your more expensive items in several meals. For example, many vegetables make perfect ingredients for soups, stews, pasta sauces and rice dishes. They also go as accompaniment with any meat-, poultry- and fish dinner. So, before you shop, make a detailed meal plan for the entire week and lay out different combinations that allow you to incorporate your purchases in the most efficient ways.
• Eat out less often. Home cooking is still less expensive than eating out. Restaurants are not immune to rising food prices and they will pass their costs on to you. If restaurant portion sizes are too large for you, take half of your order home and make it another meal the next day.
• Stock up on basics. Buy staple foods, like rice, beans, pasta and other less perishable items. These are also the ones you can get in bulk and for less.
• Grow your own vegetable garden. Many vegetables, fruits and herbs can be grown at home, if you have a yard. To start your own herb garden, you need nothing more than a few pots or crates on your patio or balcony.
• Eat less junk food and snacks. You may think that fast food is cheap. But considering the small nutritional benefits you get, it is really not. Chocolate bars, candy or a bag of popcorn may sound like simple treats, but they cost money too. Even a cup of coffee or caffe latte every morning can cut a hole in your budget, even if you don’t notice it right away. It all adds up. It can be helpful at some point to calculate how much money you actually spend on snack food and other discretionary treats throughout the day. You may be surprised.
• Bring lunch to work. Eating out with colleagues and friends may be fun, but you still can get together in a nearby park and have a picnic of sorts. Making your own lunch at home instead of getting a bite to eat at a restaurant or deli is probably not only healthier, the difference in cost can also be significant.
• Use coupons and membership cards. Many supermarket chains offer discounts through membership- or club cards. Others send you coupons in the mail or make them available on certain sites on the Internet. Choose items with the steepest discounts first. However, don’t buy things you don’t really want or need, only because they are on sale.
• Buy what’s locally grown and in season. The further food products have to be transported, the more expensive they are likely to be. By buying locally grown foods, you not only get fresher groceries, you also support your community’s economy. For this reason (and many others), you should visit farmers markets near you whenever possible.
Higher prices force a lot of people who are on a limited budget to cut back on their food consumption. The temptation is to buy cheaper foods of lower nutritional value. Unfortunately, this is bound to have negative health effects in the long run.
There are no easy answers, however, when it comes to nutrition, quality trumps quantity every time. A smaller wholesome meal will give you more energy and leave you more satisfied than a large portion of empty calories. Think of it as an investment in your good health, which is all the more important when times are tough.
Timi Gustafson R.D. is a clinical dietitian and author of the book “The Healthy Diner – How to Eat Right and Still Have Fun”®, available in bookstores, at timigustafson.com and at Amazon.com. You can also follow Timi on Twitter at twitter.com/TimiGustafson.
