Food price increases can show up in subtle ways

If you've been grocery shopping lately, you've probably noticed that prices are rising. In fact, the Labor Department reported in July that U.S. food prices rose by 4.2 percent during the last 12 months ending in July. The prices of all goods and services rose an average of only 2.4 percent during the same time frame. The price of milk, eggs and other basic items actually rose by double digits, pushing the average increase higher.

For example, according to the report, the price of eggs went up by 33.7 percent, whole milk was up by 31.1 percent and navel oranges were up by 13.6 percent. Other dramatic increases included fresh chicken up by 8.4 percent, apples up by 8.7 percent and dried beans up by 11.5 percent.

Experts report that the price increases are partly due to the congressional mandates to increase ethanol production. This has reduced the amount of corn available for animal feed which has effectively doubled the price of corn as compared to two years ago.

None of these factors is likely to change anytime soon, so we can expect prices to continue to stay at high levels or increase even more.

Dramatic price increases like these require shoppers to be more strategic than ever. Fortunately, eggs and dried beans are fairly inexpensive food choices and are still affordable options for shoppers.

Smart shoppers can stock up on chicken when it is on sale for half price by freezing it. With increased milk prices, shoppers may need to stock up on two weeks' worth of milk when it is on sale at a nearby store in order to fight the price increases. Look at the back of the shelf for the milk with the longest sell-by date. Buying seasonal produce on sale or local produce may be a smarter approach than buying higher-priced apples and oranges out of season.

You can also try to reduce the price you pay for other grocery items to allow for higher prices on grocery necessities. Pay attention to prices and compare before you buy the same items you always buy. By combining store promotions, coupons and sales shoppers can save 50 percent or more on nonperishable items like cereals, crackers, snacks, canned items and personal care products.

Consider being more brand-flexible, and try another name brand if it is on sale or has an attractive coupon. If you don't have the time to clip coupons, take the easy approach of switching to store brands if you haven't before and take advantage of store-brand guarantees if you are not satisfied with the product. Pay attention to special store promotions that give extra savings automatically when you buy multiple items.

Another key to saving money on groceries is to pay attention to unit costs when comparing prices. Contrary to popular belief, the larger size does not always offer the lowest cost per unit. Use a calculator when you shop if your store's price tags do not show the cost per ounce or pound.

You have probably noticed, as I have, that some food manufacturers are choosing to shrink their product sizes to hide their price increases. The 1-pound can of coffee is now 13 ounces, which is equivalent to a $3 pound of coffee raising its price to $3.69 (a 23 percent price increase). The half-gallon of many ice cream brands is now 56 ounces. That would be equivalent to a $5 a half gallon of ice cream raising its price to $5.71 (a 14 percent price increase). And just this week I noticed that the 32-ounce jar of mayonnaise shrunk to 30 ounces. At this rate, I wouldn't be surprised if the next carton of eggs I buy has only 11 eggs!