2011 May See Higher Food Prices Due to Corn Surplus Shortage

If you have visited your local grocery store lately you have probably noticed that prices are going up, up and up. Get used to it. According to a United States Department of Agriculture, the U.S. corn reserves have hit the lowest levels that the country has seen since the lowest recent surplus level in 1996.

What does this mean for the average consumer? Dig deeper into your pockets because it means food prices at the grocery store will go up during 2011. This surplus shortage is due to an increase in demand for corn from the ethanol industry which has put in an order this year for 13.01 billion bushels of corn. That 8.4 percent increase means that the corn surplus left over at the end of 2011 will be 675 million bushels--a level that is the lowest since 1996.

The price of corn has continued to go up over the last few months--doubling from $3.50 per bushel to $7 per bushel. The rising cost of grains and shortages has a broader effect on other food industries, such as the meat industry where corn is used as a feed product for livestock. When the price of feed grain goes up due to higher demand and lower surplus, the price of the final product--meat in the grocery store--goes up. Pet food prices will also be affected by rising costs of corn as many pet foods rely upon corn as a staple ingredient.

While these rising costs won't be seen immediately and in fact may not be noticed at the checkout lane by consumers for several months, it is important for consumers to prepare in advance for higher food costs. How are many consumers already saving on their grocery bills and how are they planning to meet rising costs?

Michigan resident Larry Poupard cuts out quick trips to nearby convenience stores to save money for his family and shops at lower-priced grocery stores like Aldi while Illinoisan Beth Riley is planning to expand her garden and intends to preserve her homegrown food. Riley is also considering getting a few chickens for the eggs.

Maryland resident Kim Remesch is a proponent of coupons and cost-sharing as a means of saving money at the grocery store. "My mom lives alone, as do I. I belong to Costco and I love their fruit, but you get a bajillion apples. We split things. Go in on the cost with someone else, and several benefit."

Angie Mohr advocates stocking up on food items and keeping close tabs on prices. The Georgia resident suggests that "knowing 'normal' prices versus true sales prices will be key. If your local grocery store has pork loins on sale for half price, put six month's worth in your freezer. If canned tomatoes are buy one get one, calculate how many you'll go through in a year and stock up. Sale prices and what you can grow in your own backyard are the remedy to escalating food prices."

Whether you plan to grow your own food, stock up, use coupons or combine all of these methods for saving money on groceries, it looks like 2011 will be a year in which consumers won't have a choice but get creative in their means of saving money at the grocery store.