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Food Prices At 20 Year Highs: No Relief In Sight

Cruising the aisles of your local supermarket, it’s hard not to notice the rising prices of staple goods.  Farmers market shoppers aren’t immune either, as farmers fighting bad weather and rising demand for scarce high-quality produce jack up prices.  Worldwide there’s no price break either, as the United Nations has declared that food prices are at 20 year highs.  Unfortunately, those looking for relief from rising food prices have a hard road ahead of them.

The world is not designed to keep cheap food available forever.  The first signs of strain are already starting to make their mark on your supermarket shelves.  The demographic future of the world is also shaping up to push the limits of global resource constraints.  As a result, you have to shift your spending now to keep up with future price hikes or start planning to take the necessary steps to seize control of your food future.

Consumers Pay The Price

The local grocery store is turning into a testimony to the world’s poor fiscal and resource management choices.  Inflationary pressures from international monetary policy are eroding what you can buy for your dollars.  The emphasis on crops that require irrigation, fertilization, and mass production over heirloom seeds and organic produce has led to depleted soil production levels and vulnerability to famines and other weather pattern changes.

As a result, consumers need to prepare to pay the price for worldwide choices.  Over the next year alone, consumers can expect to see average price increases of five to seven percent on their typical basket of goods, according to Kenrick Jordan, a Canadian economist at BMO Capital Markets.  These price increases are only what retailers think the market will be able to bear, and don’t truly reflect the sharp run-up in commodities prices that have been seen this year.

Most staple goods, such as basic grains and cooking oils, are up more than 35 percent year over year. The price increases over 2010 levels are forcing manufactures to start passing costs onto consumers, despite fierce competition from discounters like Wal-Mart and others, notes Jeff Wilson of Canadian bread-maker George Weston, who recently announced price hikes of five percent across the board.  Though producers often eat minor price shifts for raw goods in order to maintain price stability and market share, most can no longer afford to refrain from boosting end-user prices if they want to stay in business.

Demographics To Consider

These price increases are not just temporary hikes in response to current food shortages caused by famines in Russia, floods in Australia, and earthquakes in Japan.  They are also a reflection of emerging demographic trends.  By 2050, the population of the world is going to rise from the current seven billion to over nine billion, according to the United Nations.

Most of the growth is going to take place in the resource-constrained areas of Africa and Southeast Asia, notes John Bongaarts of Population Council.  They will be fighting the rest of the world to import enough grains and meat to feed all the new mouths, and it will be a brutal fight.  To meet the food demands of the next 40 years, the world will need to produce as much food as it has in the last 8,000 years, states Jason Clay of the World Wildlife Fund.  In the gap between present food production levels and rising populations, even higher food prices are going to emerge.

Take Control, Or Plan To Spend

Looking at these facts, it is clear that going forward you will need to have a plan to take control of your food future.  There are two main options to the plan.  You can either budget now to spend more on food in the future, or you can take steps to secure your own sources of food and not have to pay the inflated prices of others.

From a budgetary standpoint, it is hard to know how much you might need.  In resource constrained countries, food prices can account for more than half of a family’s weekly budget.  Since inflation can eat into purchasing power, you will want to plan to save ahead in tangible wealth forms to preserve your ability to put food on the table.

On the other hand, there is the option to grow your own food.  Secure a plot of land for yourself, and get started now with planting and cultivating crops.  This will make you comfortable as a food producer, and help you cut free from supermarket dependency at your own speed well before things reach a crisis state.

The world isn’t designed to provide you with affordable food forever.  Rising food prices aren’t temporary, especially in light of current demographic trends.  Choose your food future now based on the facts, and either set aside funds or start working on food independence to be ready for what’s ahead.

Update: The Labor Department has just released new statistics that says food prices rose dramatically last month, the largest spike since 1973. Many factors are contributing to this. We recently sent out an email to our regular subscribers with a link to download our latest report Food Shock: Why 2011 Could Be the Single Most Important Year in American History to Plant a Family Garden. Check your email inbox for instructions on how to download your copy. If you’re not a regular subscriber to Off the Grid News, please go to to sign up for the newsletter and download your free copy.

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