Hang Onto Your Wallet
Your Next Trip to the Grocery Store Could Leave It Empty
This year is shaping up to be one of the worst for food inflation that we’ve had in a long time. And that’s saying something.
Overall inflation, including food and fuel (which aren’t reported in official numbers), doubled economists’ predictions between March and April. Food prices were largely responsible for the unexpected size of the increase.
The USDA has put out even higher numbers for food inflation, anticipating that prices will rise around 3.5% in the course of the year. They admit that this number is based on normal weather patterns.
But we’re not having normal weather patterns. And we haven’t been for three years now.
Failing Crops in California
A big part of the problem is the drought in California. Extreme drought conditions over the last two (going on three) years are taking their toll on crops.
Supplies of common vegetables like lettuce, avocados, broccoli, grapes, tomatoes, melons, peppers, and more are dropping because of conditions in California. And that means prices are on the rise.
Experts estimate that lettuce prices will go up by 34%. Broccoli prices will increase by 22%. Grapes and melons will go up 21% and 18%, respectively.
These increases don’t just affect what you spend on fresh produce, either. Canned soup, jarred salsa, jarred spaghetti sauce, and frozen vegetables will all go up as a result, too.
It adds up to a rapidly increasing grocery bill … and a real pain in the wallet for consumers.
California is the largest grower of several different produce items. If drought conditions persist, that could force California farmers to abandon certain crops altogether. And that could mean some of these price increases are here to stay.
To compound the California drought, a number of factors are contributing to higher food prices:
- The record cold winter
- The lowest number of cattle in decades
- A deadly virus afflicting hog farms and killing baby pigs
- Heavy-handed government policies favoring sketchy environmental concerns over farmers
- Higher levels of food exports
We may be in for the perfect storm in terms of food prices.
Market Prices Signal Big Costs Ahead
The commodities market gives an even bleaker picture (unless you hold commodities and foodstuff investments).
Since December, the spot price for foodstuffs has increased a full 19% across the board.That signals rising prices at the grocery store for sure. If you aren’t planning to spend a bigger chunk of your paycheck on groceries, it’s time to start giving some thought to your food budget strategy. Higher prices are coming whether you’re ready for them or not.
To make matters even worse, wages aren’t increasing. So, whether you’re paying 3% more or 19% more at the grocery store— or somewhere in between— you’re going to have less money to stretch across the rest of your budget. More Americans are having to make due with less … way less … just to keep food on the table.
A Hidden Financial Opportunity
With food prices expected to rise so steeply in the coming year, you have the opportunity to capitalize on a hidden financial advantage.
If you purchase low-price foods now and take steps to store them properly, you can enjoy a significant cost savings over future prices. And, since you would have to purchase food anyway, you can enjoy this financial gain at absolutely zero risk.
Use these suggestions to help you get the most for your money:
- Look for bulk deals – if you can purchase more of something you’ll use at a lower cost per unit, that’s a good deal.
- Vacuum seal and freeze meats for up to a year. Beef and pork prices are both set for big spikes. Buy affordable cuts of meat, vacuum seal them, and toss them in your freezer.
- Vacuum seal flour, rice, pasta, and beans—these items will keep for years when stored properly. They’re cheap right now, but won’t necessarily stay that way.
- Look for deals on fruits and vegetables that are good for home canning. With produce prices on their way up, you’ll save money over the long-term.
The rising cost of food will be a disaster for many households. But with a little advance planning now, you can take advantage of the situation and come out ahead.
P.S. Given current strains, it won’t take much to upend our food supply completely. If that happens, you could find yourself waiting in line to enter your grocery store. Or facing empty shelves. Or relying on government rationing to get a meal. I have a better plan. It’s the easiest, least expensive way to protect you and your family from being directly affected with food shortages. I share all the details with you here.