The price of food rose again in September. At this time, the Food and Agriculture Organisation (FAO) estimates that prices are up 10 percent year on year. The rise on August alone was 2.9 percent. While the outlook suggests the food market will be stable, it is important to be prepared to adjust to fluctuating prices.
Most of September’s rise is attributed to a shift in the price of one of the commodities they track; sugar. Other commodities included in the analysis include items like meat, dairy, cereal and vegetable oils. The products are designed to represent the food market as a whole. In the month of August, the price of meat, dairy and vegetable oil increased, but sugar made the most notable jump at 6.7 percent.
What This Means for Consumers
Food makes up a large portion of most household budgets. Some estimates suggest families spend between 15 and 20 percent of their budgets on groceries and dining out. If prices continue to rise, food budgets will take up a larger portion of monthly salaries. This means that there will be less available for other expenses. In cases where money is tight, these small shifts can have dramatic results.
When prices right in certain commodities, like sugar, a range of products increase along the way. Sugar is in a large number of processed food products, such as breads and sauces. That means the costs of those items may rise as their cost of production goes up.
How to Manage the Shifts in Food Prices
Households with fewer debt obligations often weather these changes easier than those currently stretched to the limit. However, even if your budget doesn’t have a lot of space, that doesn’t mean you can’t make small changes to offset the shifts. One of the easiest changes is to stop dining out, or at least doing it less often.
You can also reduce your spending by going to the grocery store less often. When people shop, they often spend more than they originally intended. By making fewer trips, you lessen the number of unnecessary purchases you make. Following a shopping list can also help, as long as you don’t purchase anything unplanned. Meal planning can also make things easier to manage.
If you want to make the foods you enjoy more affordable, consider adding certain low-cost staples to expand them. For example, rice or pasta, beans, and potatoes compliment a wide variety of meals. This means you can still use higher quality ingredients, but in smaller quantities.
Planning for the Long-Term
To position yourself more favourably in the future, work on lowering your debt obligations. By having less money being directed towards those expenses, you can create more room to adjust to changing prices. If your debt is under control, make an effort to add to your savings. That can provide a cushion to help you make it through challenging times without having to sacrifice to the point of discomfort.
Most people understand that prices are more likely to rise over the long-term than fall. By planning for these changes, you can make them easier to manage. If you expect your food budget to increase, and plan accordingly, then you will have what you need available when you need it. If prices don’t rise, or don’t rise as much as you planned for, you will have extra money available for other costs or savings.
Either way, by anticipating costs to rise, you will be in a better position regardless of what actually happens. While it can feel a bit pessimistic, you’ll be thankful you planned for the worst if it does happen, and relieve if it doesn’t.