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Expect higher food prices this year

USDA predicts an increase of 2% to 3%. But we're already seeing much higher prices on some items, including meat and dairy.

By Teresa Mears Jan 26, 2011 3:06PM

Have you noticed grocery prices rising?

 

Expect that trend to continue. The U.S. Department of Agriculture told consumers this week they can expect prices of food both at home and in restaurants, as measured by the Consumer Price Index, to rise 2% to 3% this year. Already, McDonald's has announced a price increase

Many shoppers say they're already seeing higher grocery prices, some of them larger than the USDA's prediction for the entire year.

 

The Tennessean newspaper in Nashville found that the prices for a grocery basket of staples had risen 12.5% since November 2009.

 

Expect to pay even more this year, especially for dairy products, pork, beef, fruits and vegetables. Post continues after video.

Shoppers are feeling the pinch. Barbara Powell, 64, who with her husband survives on disability and Social Security payments, told the Orlando Sentinel:

Things you would see for 10 cents less last Monday are 10 cents more this Monday. People on fixed incomes like I am, it's hard for us. We just have to close our eyes and get it. But it's expensive.

The rising price of gas can eat up the savings from shopping at less expensive stores farther from home.

 

USDA economist Ephraim Leibtag told The Tennessean that the rise in food prices is actually a "return to normal" and a sign of economic recovery. Over the last 20 years, the price of food has increased by an average of 2.5% to 3% a year.

 

Of course, if your salary isn't increasing that much -- and cuts in wages, hours and outright unemployment are still common -- even a 2% increase in prices can hurt.

 

The USDA reported these increases from December 2009 to December 2010:

  • Beef: up 6.1%.
  • Pork: up 11.2%.
  • Poultry: up 1.3%.
  • Eggs: up 6.1%.
  • Cheese: up 4.3%.
  • Butter: up 21.9%.
  • Fresh fruit: up 3.1%, with citrus up 9.1%.
  • Fresh vegetables: up 1.2%, with potatoes up 5.4%. On the bright side, lettuce was down 7.4% and tomatoes were down 10.5%. Prices of other fresh vegetables were up 6.9%.
  • Bread: up 1.1%.

Jason at Frugal Dad is feeling the effects:

Whatever the reason, increased food prices are putting a major dent in our household budget. Since we can't do much about the prices, we have to look for other ways to reduce (or at least keep even) our overall food expense.

He offers nine ways to reduce your grocery budget, including shopping less often, avoiding junk food, and freezing leftovers for future meals.

 

Have you noticed grocery prices rising? I certainly have. How are you coping?

 

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