How To Save On Rising Food Costs

The U.S. Department of Agriculture (USDA) released a report recently predicting an increase in food prices, especially among animal products. That's thanks to a hard crop year in the Midwest, where droughts drove corn and soybean prices up. Those two items have a domino effect on all other food prices, including meat and dairy, as corn and soybeans are used for animal feed.

Among the predictions: Beef and veal will rise by an estimated 5 percent by 2013, pork will rise 3.5 percent, and dairy will rise 4.5 percent during the same period.

Couple that with the premium health food seekers pay for Farmers' market fare and organic staples, and you're looking at one whopper of a grocery bill. So what can you do? Here are some top tips to keep food prices down and quality up.

• Look for alternatives to meat: This may sound like an obvious one, but replacing meat with vegetable sources of protein such as rice, beans, and lentils, will always help reduce costs. That goes double during this period, when the USDA specifically predicts a price hike in animal protein.
   
• Skip pre-packaged meals: Not only are boxed, frozen meals, pizzas, and burritos more likely to be processed and laden with excess sugar, fat, and salt, they're also generally more expensive, according to the EWG.
   
• Think about the nutrient you want: Want fiber? Black beans and popcorn may be the cheapest sources. Need to up your protein intake? Go for canned tuna. Thinking ahead may help you avoid buying more than what you need.
   
• Preserve! Buying in bulk is a cheap way to get a lot of food in your larder, but healthful fruits and veggies can go bad before you can eat them. That's where pickling, jarring and canning can come in handy—it's a cheap, healthful way to keep seasonal produce all year round. Check out the National Center for Home Food Preservation, a government resource that provides guides on safe canning, pickling, and other forms of preserving.
   
• Clip coupons: This is another obvious one, but so many people don't do it. Using coupons is a great way to get organic and other pricier health foods at a discount. And organic brands like Cascadian Farm, Muir Glen, and Amy's often have coupons attached to their packaging.

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Drought 2012 Costs Crop Insurers $5 Billion

Private crop insurers may face losses exceeding $5 billion if this year’s U.S. drought is worse than one in 1988, according to Standard & Poor’s.

Hot, dry weather across much of the Midwest has damaged crops, led to a rally in corn and soybean futures, and boosted insurance loss estimates. The U.S. subsidizes farmers’ premiums for so-called multiperil coverage, which protects against a loss of revenue or production as a result of drought, hail, wind, frost or other natural causes. Private insurers sell and administer the coverage in the U.S. In return, the federal government backstops the firms with payments and reinsurance.

Losses among crop insurers will vary depending on how much government and private reinsurance they use, S&P said. The companies can withstand the losses because of capital levels and revenue from other businesses, according to the ratings firm.

American Financial Group Inc., which sells crop insurance along with property, casualty and supplemental health protection, last month reduced its earnings projection for the year, saying the drought will weigh on results.

Soybeans climbed to an all-time high today, and corn reached a record $8.49 a bushel on Aug. 10 on the Chicago Board of Trade. The Department of Agriculture has slashed its corn harvest forecast by 27 percent since June, after declaring more than half of U.S. counties as disaster areas amid drought conditions that stretched from California to New York.

Losses this year may rival costs from the 1988 drought and a 1993 flood, Tom Zacharias, the president of National Crop Insurance Services, an industry group, said last month.

Federal crop insurance dates to the Dust Bowl droughts of the 1930s. The program and subsidies were boosted in 2000 as lawmakers sought to use it as a way to avoid what by the 1980s had become near-annual disaster payouts.

Drought 2012: Hot Weather and Hot Grain Markets

It's only August, but talk early harvest of corn and beans is under way. Louisiana is 11 percent harvested on the beans, Mississippi is 6 percent done.

USDA issued the first harvest report, saying that we were 4 percent done Sunday night.

The early harvest might be contributing to the old-crop/new crop spreads. Early in the rally, the nearby contracts led the markets. Recently, it has been the December corn contract.

With early harvest taking the pressure off the idea of running out of corn, we can now just worry about the new crop. At some point we will wonder if the carryout is still too high because we used some of the current crop up before the current crop year officially started.

The highs in corn prices have has a lot to do with ideas of limiting demand. Not much talked about by farmers, but noticed by the trade is the unusual importing of corn taking place right now.

Southeastern feeders have banded together to get Brazilian corn into Norfolk. Nine cargoes were booked more than a month ago. This month, the talk was of Brazilian corn coming into California for the dairy industry concentrated there, away from our mainstream supply.

It's sad to think that ocean freight from Brazil can be cheaper than rail freight from the Midwest.

The government has stopped just posturing about the ethanol mandate. The EPA has now officially opened a 30-day period for comment on whether the mandate should be waived. This would mean that refiners would not be required to put 10 percent ethanol in their gasoline blends. The consensus is that if the mandate is suspended, corn prices would drop as usage in gas would drop. 

If the mandate changes and the refiners go to less ethanol, the result would be the total stop to the rally and a retracement, looking for a demand-driven price.

Some time in the future we will look at the charts and have reasons why prices changed at a certain date. What we know is that the prices cannot just go up.

More Countries Remove Protection from Military

Germany has became the latest country to remove protections for civilian populations from Military intervention in domestic conflicts. In a new court ruling, which repealed laws created out of the Nazi era in Germany, the government can now use the military against citizens in extreme cases, joining the U.S. and other nation states who have removed the dividing line between civilian and military policing.


In America, Northcom was created shortly after 9/11 to be an military command dedicated to threats within the homeland, and instituted a discontinuation of Posse Comitatus, which had separated civilian police from military use on citizens since the end of the Civil War. Since its inception in 2002, the Federal government has expanded its influence over Americans by creating the Department of Homeland Security, and the militarization of many bureaucratic agencies, with the majority of increases taking effect since the banking crisis in 2008.


In 2010, the Federal Reserve secretly ordered five major U.S. banks to develop plans in case of an economic and banking collapse. This order coincides with several well respected economists declaring that a major economic collapse is inevitable, and could come within months.


Over the past six months, our government has been stockpiling nearly a billion rounds of ammunition for agencies that do not have a military. This growing supply of bullets questions the purpose and plan for militarizing domestic economic agencies outside their scope and mission.


Our government, along with our allies, Britain, and Germany, have increased their military and surveillance presence on their own civilian populations, even as potential and actual terror plots have decreased. The growth in domestic militarization increased due to the 2008 banking crisis and not due an increase in terror events.


The potential for economic collapse, civil unrest, revolution, and societal collapse are increasing exponentially across the West, and in other global economies. Since the credit crisis of 2008, several nations have removed longstanding civilian protections from military policing of domestic events, with Germany now being the newest country to overrule decades long legislation that assured protections for their citizens in domestic disputes.

Drought 2012: Stokes the Food As Fuel Debate

The U.S. government requires about 13 billion gallons of ethanol to be used in the nation's gasoline. To achieve this, nearly half of the nation's corn crops go to not feeding people but to powering motor vehicles.

Since 2005, the U.S. government has mandated that gasoline contain ethanol, mostly derived from corn. The policy intent was to reduce dependency on foreign oil imports and improve air quality. It has also been a boon for corn farmers.

But in the midst of the worst drought since 1934, the faults of this policy that forces nearly half the U.S. corn harvest into fuel production. And with corn prices at record highs, the ethanol requirements are fueling increased food costs and spreading it to the price of gasoline, which is up almost 40 cents a gallon since early July.

Beef and pork ranchers are slaughtering their herds at a record rate to cut their corn feed costs which have gone up more than 30% in three months. As a result, U.S. cattle herds next year are projected to be the smallest since 1952, a guarantee of more expensive food in years to come.

Th drought exposes the notion of trying to expand an industry where the economics of it don't make sense. Based on its energy content, ethanol is approximately 50% more expensive than gasoline and the acreage required to produce it distorts land prices.

Tractors run on diesel fuel that plow the fields, plant seed, harvest the crop and haul it to refining plants. Ethanol is also highly corrosive and can’t be transported by pipeline, unlike oil. Trucks or trains must carry the finished product to gasoline blenders. In short, ethanol requires more energy to produce than it actually yields, negating the environmental benefits.

Earlier this month the United Nations Food and Agriculture Organization issued a statement urging "an immediate, temporary suspension" of America's use of corn to produce ethanol, in order to "allow more of the crop to be channelled toward food and feed uses."

Natural disasters can't be controlled, but ethanol is a man-made disaster that needs to be stopped.

Drought 2012: Food Prices to Surge Higher - USDA

The drought of 2012 has sent corn, wheat and other commodity prices soaring to record or near record levels in recent weeks as U.S. crops continue to dry out.

The record drought gripping half the US will help push food prices up by 3% to 4% next year, according to the Department of Agriculture.

"In 2013 as a result of this drought we are looking at above-normal food price inflation. Consumers are certainly going to feel it," USDA economist Richard Volpe said.

Milk, eggs, beef, poultry and pork prices will all be affected by the drought, which has pushed up prices for feed.

• Beef prices are expected to see the biggest jump at 5% to 7%.
• Dairy product prices are forecast to climb 5% to 6%.
• Poultry and egg prices are projected to rise 4% to 5%.
• Pork prices are expected to rise 4% to 5%.

With farmers and others warning that prices will rise, the drought has sent corn, soybean and other commodity prices soaring in recent weeks as fields wither under the heat across much of the Midwest.

The drought is not expected to affect prices for fruits and vegetables as most of those crops are irrigated. However, the USDA is forecasting a 2% to 3% for all fruits and vegetables in 2013.

Drought 2012: Global Impact of Wilting U.S. Crops - Video

 

At least 32 states are feeling the effects of the drought as the unrelenting heat has pushed grain prices to record levels.

Corn is the major U.S. crop and a bad year drives the price up on everything from beef to cereal to fuel. As crops continue to wilt, farmers and consumers around the world are looking towards the sky, hoping for rain.

Drought 2012: Food Shortages and Global Unrest Possible

Worst Drought Since Dust Bowl

With more than half the US in the grips of the worst drought since the 1934 Dust Bowl, shortages and rising global prices which on corn, wheat and soybeans, which America is the world’s largest exporter, could lead to global unrest.

World prices for corn, wheat and soybeans have already reached record levels, and will continue to affect developing countries that rely on on agricultural imports for food.

“The drought is clearly going to kick prices up. It already has,” said NECSI president Yaneer Bar-Yam. “We’ve created an unstable system. Globally, we are very vulnerable.”

Deregulation has not help the situation. In the late 1990s, food markets were deregulated, allowing hedge funds and investments banks to speculate on prices, making markets susceptible to sudden, sometimes massive, price fluctuations.

“The drought may trigger the third massive price spike to occur earlier than otherwise expected, beginning immediately,” wrote the NECSI team. Price hikes have been credited as the cause of the Yemeni uprising in 2008 that led to food riots and widespread violence. During that same year, killings occurred in Haiti over the doubling of the price of rice, resulting in government rice warehouses being looted.

The 1934 drought and dust storms millions of acres of crops and left 80% of America experiencing food shortages. At a time when much of the world relies on the US for food staples like corn, wheat and soybean, the impact of the 2012 drought could lead to increased global hunger and violence.

Drought 2012: Nearly 1,600 Counties Declared Disaster Areas

218 Counties Added in 32 States

As one of the worst droughts in U.S. history continues, an additional 218 counties have been added to the US government’s list of natural disaster areas bring the total to 1,584 counties in 32 states that have been designated primary disaster areas, according to the USDA.

The USDA utilizes a weekly drought monitor to form its list and this week they found that nearly half of the nation’s corn crop and 37% of its soybean crop was rated “poor” or “very poor.”

Farmers and ranchers in counties considered natural disaster areas are eligible for federal aid, including low-interest emergency loans, in addition to access to 3.8 million acres of conservation land to feed their animals. Three quarters of the country’s cattle are in areas affected by the drought.

Farmers are being paid to take land out of production to prevent erosion and create wildlife habitat and are also receiving a penalty-free, 30-day grace period on their crop insurance premiums this year.

With confidence in the economy at its lowest level since the recession combined with US export orders at there lowest level in three years, food shortages and rising food prices could drive the country into another recession with impact felt worldwide.