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Food Prices Headed Higher: What You Can Do

Carnivores, brace yourself for even steeper food price hikes this year than originally forecast. The unholy trinity of rising feed prices, spiking oil costs -- it takes money to transport food from farm to table -- and increased global demand has pushed the U.S. Department of Agriculture to ratchet up some of its 2011 food price forecasts, with beef and pork prices getting the most costly upward revisions.

Here's how you might want to rethink your food intake/grocery shopping to deal with the expected price increases:

  • Stick with chicken. At the start of the year, the USDA said it expected beef prices would rise 4.5 percent to 5.5 percent this year. The new forecast is for a price jump of 7 percent to 8 percent. And it's not like you haven't already been paying up, as beef prices are already 12.2 percent higher than they were a year ago. If you've got a yen for pork, that's going to cost you more as well. The USDA has changed its 2011 forecast of a 6 percent price hike for pork to a new expected range of 6.5 percent to 7 percent. Over the past 12 months, pork prices have already increased 11.2 percent.

In news that the chicken lobby is no doubt already plotting an ad campaign around, though, the price hike for chicken remains quite benign: the 2011 forecast stays unchanged at 2.5 to 3.5 percent. If going with chicken doesn't appeal, it may be time to load up the garage freezer with beef and pork; at least you can lock in today's prices for at least a few months.

  • Steam, rather than sauté or fry: The USDA also raised its estimate for inflation for fats and oils by a full percentage point to 6 percent to 7 percent. Butter's not much help either here, as its cost has spiked 31 percent in the past year.
  • Anyone for tea? Coffee prices rose more than 3.9 percent in March alone and are now 9.4 percent higher than a year ago, according to the USDA. But I'm not sure what USDA statisticians are looking at when tabulating these increases; certain high-end coffee beans have doubled over the past year, and coffee futures are now trading at a 34-year high.
  • Mom was right: eat your fruits and veggies. If not for health reasons, do it for your budget. The USDA adjusted its price forecast slightly upward, but at an expected hike of just 3.5 percent to 4.5 percent, prices for fruits and vegetables are forecast to rise at half the rate of those for beef and pork. But you might want to hold the tomato and lettuce, as they have already had price hikes of 27 percent and 10.6 percent, respectively, over the past year.
  • Pull out the omelet pan. Egg prices actually fell slightly in March and are just 1 percent higher over the past 12 months.
  • The season's right for a veggie garden: Maybe this is the year you start growing some food in the backyard. Urban dwellers who have at least a 3'x3' outdoor space can park a raised-grow bed on top of the patio or deck.
  • Food for thought? The USDA says overall grocery costs will rise an average of 3.5 to 4.5 percent, while the cost of eating out is forecast to rise a smidge less, at 3.0 to 3.5 percent. Also, I imagine this might not go over too well, but I thought I'd mention that the recent spike in food prices follows an extremely benign time for food inflation. Overall food prices increased just 1.8 percent in 2009 and 0.8 percent in 2010, according to the USDA.

Photo courtesy Flickr user muhawi001
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