High Food Prices - Here's how to save

By Liz Pulliam Weston

Prices for eggs, milk and flour have soared in the past year, rising faster than other staples. Experts share their secrets for stretching your food dollar.

Every trip to the grocery store seems to bring another shock. Bread. Butter. Eggs. Milk. Cheese. Even beer hasn't escaped the sudden resurgence of food inflation.

As painful as rising gas prices have been, big jumps in food prices are worse because we spend so much more of our budgets feeding ourselves (12.8%, on average) than we do feeding our cars (3.4%).

To help you cope, I consulted the Bureau of Labor Statistics, which tracks the Consumer Price Index, to find the five foods that had soared the most in price between March 2007 and March 2008.

Then I turned to a trio of seriously smart shoppers to find out how to save money on those particular items.

And the winners of the most inflated foodstuffs are (drumroll, please):

• Flour, up 37%.
• Eggs, up 34.8%.
• Sweet peppers, up 29.2%.
• Milk, up 23.1%.
• Dried beans, up 21.6%.

That last one is particularly painful. I can't count the times I've told some debt-addled reader to reduce expenses by "eating beans and rice if you have to!" Oh, yeah, and rice is up 10% in a month; some warehouse stores are starting to limit bulk sales because of stockpiling.

The causes of food inflation are many, with the importance of each dependent on which expert you quote. Among the most commonly cited:

• Speculation in commodity markets.
• Bad weather.
• Rising global demand, particularly in China and India.
• The weak dollar.
• Higher transport (fuel) costs.

There's not much you can do about any of those factors, but there are plenty of ways to control and trim your food budget.

For help in reducing these particular food costs, I turned to Amy Bergin, the creator of the Couponizer, a coupon organizing system; Stephanie Nelson of The Coupon Mom; and Julie Parrish, the owner of Hot Coupon World.

Here's what they had to say, item by item, along with some reader tips and general bonus advice about the best ways to bring down your food bills.

Flour

You can count on it: Every year before the big baking holidays -- Thanksgiving and Christmas -- flour goes on sale, usually for about 99 cents for a 5-pound bag.

Except last year it didn't happen, Parrish said. And it didn't happen again before Easter either.

"Flour, sugar, butter -- those are the loss leaders that get people in the stores," Parrish said. "But we didn't see (sales on those items) at all. (It was) $3.49 for a 5-pound bag."

Whether you noticed depends on how much you bake. If the answer is "not much," then you probably see the rising cost of flour most clearly in the increased cost of bread.

Either way, here are some suggestions:

Treat it well. Store flour in airtight containers or in the freezer, Bergin recommended, to keep it usable as long as possible. (If you have problems with your flour getting infested with bugs, freeze it as soon as you get the bag home. Refrigerated flour picks up odors over time.)

Don't bulk up unless you'll use it. Yes, those huge sacks at the warehouse store will cost less per pound, but they're not a bargain if some of that flour goes to waste.

"I checked flour prices at Costco, and the smallest quantity was 25 pounds," Nelson said, "which is more than the typical family would want to buy."

Flour's shelf life is about six months if kept in airtight containers and somewhat longer if you freeze it. If you use only 10 pounds in a year, you'll wind up throwing away the bulk of your "savings."

Check your alternatives. You may be able to save with a smaller bulk purchase by checking health-food and discount stores that sell flour out of bins.

Buy the house brand. This works for flour as well as bread. The nutrition is the same as with name brands; save the premium stuff for special occasions.

Leverage your coupons. Coupons for flour aren't all that common, but coupons for name-brand breads are easy to find, and they may knock the price below that of the house brand.

Of course, several readers on the Your Money message board say they save money baking their own bread. Even with higher flour prices, they insist it's better and cheaper than what they find in a store.

A poster named "what to buy" follows the recipe on the back of the King Arthur flour label.

"It was super easy to make (and) barely required any prep time, only 'rise' time," the poster wrote, adding, "I figured it out to cost 59 cents a loaf vs. the normal $2.50 I was spending in the store, and it tastes much better!"

Other tips for saving on bread:

• Shop at discount bakeries that sell bread near its expiration date.
• Stock up and freeze the excess when you find a good sale (double-wrap with another bread wrapper to avoid freezer burn).
• Ask your grocery manager to start a discount rack for bread and bread products if one isn't already available.

Eggs

The good news: Many grocery stores are treating eggs -- and milk -- as loss leaders, hoping you'll come in for the deal and spend more on other items.

Parrish said she regularly sees stores across the country offering a dozen eggs for 99 cents. So check grocery store circulars for deals. Otherwise:

Buy bland. Buy the store brand instead of name brands, Nelson advised, and white eggs instead of brown. Though brown eggs have gained a mysterious cachet as being healthier, they simply come from different-colored chickens (brownish ones, like Rhode Island Reds) than those that lay white eggs (such as White Leghorns).

Get closer to the source. You may get a better deal at a farmers market, although that depends on your area. (Where I live in Los Angeles, farmers markets tend to feature brown eggs from organically fed free-range chickens that mate at the full moon after their yoga classes, so they tend to run more than the white eggs in the store.)

Bergin likes farmers markets in general as a source of food and a fun family outing: "Your kids can meet the farmers," she said. "Not only is it a great way to save money, but it's a lesson in the food chain."

Check out the warehouse deals. On her recent Costco run, Nelson checked egg prices and found that a box of 18 was $2, only slightly more than the $1.79 charged for 12 at her local store. "However, you have to buy two 18-count cartons of eggs at Costco for that price," she noted, "so you could split the purchase with a friend or eat a lot of eggs."

Stock up within limits. If you find a good deal, buy more than you typically would. Eggs have a pretty long shelf life for a fresh food. Though the American Egg Board recommends keeping eggs no longer than three weeks after purchase, Parrish said she's kept eggs six to eight weeks past their expiration date in a colder-than-average fridge she keeps in her garage. You also can freeze eggs by breaking them into freezer bags and thawing them later for baking or scrambling.

Or simply keep your eye on the expiration date and plan to have more egg dishes as the third week approaches. Poster "go bucks 123223" is a big believer in use-it-up cooking. "If milk is about to go bad, we make pudding," go bucks 123223 wrote. "If eggs are just about up to their date, we have breakfast for dinner."

And remember, even when they're more expensive, eggs remain an inexpensive source of protein compared with meat, poultry or fish.

"Frittata is still a cheap dinner," Nelson said.

Sweet peppers

Sweet green, red and yellow bell peppers aren't a staple in most people's diets, which means it's fairly easy to substitute another vegetable. But if you're a die-hard fan, a $2.50 yellow bell pepper may have dulled your appetite. One option: Consider growing your own.

"We got 20 bell peppers off one plant last year," said Parrish, who lives near Portland, Ore. She said peppers are easy to grow in containers, making them a good choice for novice gardeners.

Parrish also suggested looking for vegetable mixes that include sweet peppers as an ingredient. Frozen foods are generally cheaper than fresh and typically frozen within hours of picking, which helps preserve nutrients.

Milk

Shop hard for this staple, the women advised, because sales vary, and some stores that have great prices on other foods still charge a lot for milk.

In a recent price check near her home in Atlanta, for example, Nelson found a gallon of skim milk cost $2.69 at an Aldi discount market, $2.99 at Costco, $3.99 at her local supermarket and $4.49 at Wal-Mart.

"Be flexible about which grocery store you shop at each week," Nelson advised. "If two or more supermarkets are an equal distance and your family uses a lot of milk, shop at the store with sale prices on milk. . . . However, making a special trip to save on 3-4 gallons of milk doesn't make sense when gas costs just as much."

Other tips:

Skip the name brand unless you have a coupon. The store brand is less expensive and may even come from the same dairy. Coupons may help knock down a premium price, though, and coupons for organic milk seem to be particularly plentiful right now, Parrish said.

Buy skim. "Skim milk is usually 10% less expensive than 2% and better for you," Nelson said. Don't like the taste? Mix it with the milk you like, gradually increasing the proportion of skim.

Cut it with dry. Many frugal types insist you can't taste the difference if you mix reconstituted dry milk with an equal amount of fresh milk. Or try adding a little vanilla extract. If nothing else, consider using dry milk in baking and other cooking.

Go long. Grab gallons from the very back of the shelf with longer expiration dates. Also, milk in plastic containers can be frozen; just make sure to drink a glass first to allow for expansion.

Or go short. "If your family goes through milk quickly, look for markdown gallons that will be expiring in the next day or two," Nelson advised. "Dairy products last one week after their expiration date. Last week I bought a gallon of markdown milk at less than half-price, $1.69."

Look for co-sponsored offers. Cereal and cookie manufacturers, among others, may offer coupons for discounts on milk if you buy their products, Parrish said.

Offer water. Many parents are delighted their kids drink milk rather than sugary sodas or juices -- that is, until their teenage son shotguns a gallon of it after basketball practice. Three servings a day of milk are usually sufficient (check with your pediatrician, of course). After that, serve water.

Dried beans

The bottom line: Cheap plus 20% is still pretty cheap.

So dried beans are still a bargain, typically costing around $1 for a 16-ounce bag that can feed a whole family. Rather than cutting back, consider buying in bulk (health food and discount stores often sell dried beans out of bins) and making bean dishes more often. Recipes abound on the Web.

Some other ideas for saving on groceries:

Figure out your own food-budget killers. The cost of eggs or milk may pinch, but the real dent in your wallet is made by more-expensive items. What you need to pay attention to are the items on which you spend the most and figure out ways to save on those.

The easiest way to do that? Save your grocery store receipts for a month or so. Identify the five or six items that cost you the most -- meat? beer? diapers? -- and figure out ways to cut back, rethink or find bargains on those. Need help? Check out the Smart Spending blog.

Consider substitutes. When prices get tough, the frugally tough eat something else.

For example: Apples, oranges and bananas are all fruits, Nelson pointed out, but apples typically cost close to a dollar each, oranges about 50 cents and bananas a quarter or less.

"If everyone in a family of five ate a banana instead of an apple every day, the savings would be $1,400 a year," she said.

That might get a bit boring, of course, but it does illustrate how the savings from easy substitutions add up.

Reduce waste. One U.S. Department of Agriculture study estimated that one-quarter of the food bought by consumers and restaurants is wasted, spoiled before it can be served or scraped uneaten off plates. Check your refrigerator daily, your freezer weekly and your pantry at least monthly for foods about to go bad so you can use them up. Eat leftovers for lunch the next day. Serve smaller portions and encourage big eaters to ask for seconds, rather than risking waste.

Reproduced with permission of MSN Money.com, from High food prices? Here's how to save, Liz Pulliam Weston, 2008; permission conveyed through Copyright Clearance Center, Inc.