You will pay more for a number of food items in the coming months.
General Mills has announced its plans to increase the prices on some of its cereal brands on November 15, and increase the Betty Crocker brand of baking goods in January 2011. Kraft Foods has already begun increasing their prices and McDonalds has indicated that it will raise its prices in 2011.
As big name manufacturers announce price increases on select items, other manufacturers will likely follow suit resulting in industry-wide increases. While the increases are not expected to be as steep as those taken in 2008 they will be enough to prompt a consumer response that will include comparing prices.
The economy remains shaky, and the debate about whether or not we are in a recession is ongoing, but the facts remain that the unemployment rate is high and the mortgage foreclosure rate remains high. Increasing food prices is likely to send shockwaves through the already money-strapped corners of society. Again.
So why are food prices increasing again? And when will it stop?
The prices of wheat and corn commodities are largely to blame. Demand is growing at a faster pace than supply can sustain. United States grain crops have been affected by adverse weather conditions. Russia, who exports wheat to the United States, has also been affected by drought conditions and has temporarily put a stop to exporting wheat.
Wheat and corn affect almost every single food item in the market. Cows eat corn. Wheat makes flour.
Higher food prices are not going to go away because it is rare that a price decrease ever makes its way to the consumer, but steps can be taken to avoid the shock to your budget with a couple of very simple steps:
- Use coupons. Use newspaper inserts, printable online coupons, and a loyalty shopper card.
- Switch to generic brands. Many times they are manufactured by a leading name brand.
- Read the store ads that come in the mail and newspaper, or online and make your shopping list according to the items that are on sale.
- Stock up (buy extra) when items go on sale. Baking items are usually priced low around the holidays, healthy items in January and February and condiments in June and July.
- Plan a weekly menu around the items in your stock.
Be ready, like it or not food prices are going up.
Learn more about how to save money on groceries.