There are a plethora (I've always wanted to use that word) of stories in the media concerning food prices and their inevitable rise. Most recently, rice was the subject of many panic-ridden articles and I myself felt compelled to go out and buy a couple of pounds. However, we in the U.S. are very lucky to have a stable, consistent source of food. People in some countries can't even find the food on store shelves, let alone complain about the prices. Is it really time to start stockpiling?
A Wall Street Journal article recently suggested that, in fact, it IS time to stockpile food. The author posits a fairly unique argument for this. He indicates that loading up the pantry now is tantamount to an investment. That food prices are increasing so rapidly that keeping our money in a savings account at a mere 3% might be less beneficial in the long run than purchasing a case or two of canned corn now, before the prices go even higher. This is because food prices are rising, on average, 4.5% for most American families.
"Stocking up on food may not replace your long-term investments, but it may make a sensible home for some of your shorter-term cash. Do the math. If you keep your standby cash in a money-market fund you'll be lucky to get a 2.5% interest rate. Even the best one-year certificate of deposit you can find is only going to pay you about 4.1%, according to Bankrate.com. And those yields are before tax."While I do agree with the author's basic premise, that buying what we can now before prices rise even further is a good thing, I have some hesitation about filling my crawlspace with cans of tuna and beans, rather than putting my money into my emergency fund.
First, I think we can easily lower grocery bills by simply choosing a less expensive store. I used to shop at Fred Meyer, because it was convenient. Then I created a price book, and realized that the store across the street is 10-20% cheaper. I see many, many people in the parking lots of the more expensive grocery stores in town; clearly, they're choosing to pay more for their groceries. Rather than stockpiling, people who are concerned about food costs might benefit more from doing a little research on the grocery stores in their areas.
Second, buying the store brand can save even more money. Most popular items are available in a store brand, even at the more expensive grocery stores. The products are identical in most cases, with the exception of the price. I used to be a snobby shopper: only the 'best' would do, and the 'best' was defined as a name brand I recognized. Then I tried store brands, and for the most part I've been satisfied. And, more importantly, I've cut my grocery bills in half.
Third, the prices of certain items are increasing more quickly than others. For example, corn and rice (two of my favorite food items, unfortunately) seem to be getting much more expensive, much more quickly than other items. This has resulted in my not eating as much corn or rice. Instead, I've begun baking my own bread, am growing more varieties of vegetables this year, and have rediscovered the joys of Top Ramen (the price of which has held steady since roughly 1992, if my memory serves me).
And finally, consider buying in bulk. Many times you'll save more money than even buying the store brand! And, as an added benefit for those who care (as I do), there is far less packaging for the trash bin---or the recycling bin.
Tomorrow, I'll share a post about the (completely unscientific) research I just completed about the differences in price found in the bulk section of my grocery store versus the store brands. Twenty minutes with my pen and notebook got me some odd stares from other shoppers, but it also served to confirm what I had already suspected. Buying in bulk can---in most cases---save money!