is cooking at home still a bargain?

[rosey7415]

After 2011's Grocery Price Surge, Is Cooking at Home Still a Bargain?
By Bruce Watson
Posted 6:45AM 01/06/12 Retail, Family Money, Food

Everybody knows the basic rules for saving money on food. Don't eat out. Ditch the steaks in favor of ground beef. Stick to the staples, like milk and potatoes. But a recent USDA report shows that, in 2011, some traditional money-saving guidelines proved useless as food prices went through the roof.

On average, increasing global demand and rising commodity and fuel costs drive grocery costs up by about 2.9% per year, but in 2011, they rose by an estimated 4.25% to 4.75%. And while prices went up across the board, the cost increase on staples was especially sharp. For example, prices for ground beef -- one of the classic economizing ingredients -- went up by a staggering 10.2%, as did the price of eggs. Meanwhile, turkey, another classic source of cheap protein, went up by 10.5%.

And those were hardly the only groceries whose costs went through the roof. Milk prices rose by almost 10%, and ice cream went up by 10.3%. Apples cost about 9.6% more, and potatoes rose by a shocking 12%. Prices on fats and oils also went crazy, with a huge 11.1% increase.

Some Good Deals

It wasn't all bad news: In terms of proteins, fish and pork are comparatively good options. Seafood, for example, rose a mere 5.9% in 2011, while the price of pork went up by 6.9%. Cereal is only 3.5% to 4% more expensive than it was at the end of 2010, and prices on nonalcoholic beverages -- including sodas -- have only risen by 4.4%.



One major reason that grocery items -- particularly staples -- went up so sharply in 2011 was because of increasing demand. As Richard Volpe, a research economist with the USDA's Economic Research Service, notes, that high unemployment, low wages, and other economic pressures have pushed many consumers to save money by eating at home. As families have tried to economize by buying cheap ingredients, they have increased demand. Ironically, prices of luxury foods like steaks and fresh fish -- which consumers have been eschewing in favor of cheaper fare -- went up by less.


Restaurants Becoming a Bargain?

For that matter, the cost of eating out -- a classic luxury expense -- rose much only half as much cost of eating in -- between 2% and 2.5%. Part of the reason, Volpe points out, is that restaurant managers "were reticent to pass on price increases to consumers."

This worry isn't surprising: While restaurants and grocery stores are both affected by rising food costs, it is still more expensive to eat out than to eat in, and price hikes can be a deal-breaker for many families. As Mike Lubansky, a senior financial analyst at Sageworks, a financial information company, puts it, "If restaurants pass along all their cost increases to consumers, it will make them less competitive." As a general rule, food costs are supposed to range between 25% and 38% of overall restaurant costs; the rest comes from labor, overhead and other expenses. Lubanski points out that restaurants can "save costs in other areas to make up for increased food costs."

The USDA estimates that the price gap between eating in and eating out will narrow even further in 2012: Grocery prices are predicted to rise by 3% to 4%, while menu prices will likely go up 2% to 3%. Eating at home will still be cheaper than going out, but it's worth asking how long the narrowing trend will continue -- and how many restaurants will survive the sluggish consumer economy.



See full article from DailyFinance: http://srph.it/xGPEpy

[frugalfranny]

What has been surprising here.........our beef prices have
skyrocketed........but pork and chicken haven't gone up as fast.

Our eggs still continue to be "reasonable"..........for a protein and have gone up only a little bit.

For restaurants........our FAST FOOD has gone up considerably and for the 'crud and $' you may as well go to a family dining type restaurant...........but our minimum wage took a jump in Jan. too.............think we are second for min. wage.

[hmcart]

with 6 people in our house I am sure it will always be cheaper to cook at home!! we dont buy ground beef much anymore. We have started using more ground turkey. I can get a pound of frozen g turkey at Aldi for $1.49 right now!

[josantoro]

as long as I don't have to tip anyone, eating at home is always cheaper. Plus I KNOW what I am eating and who has handled it .

[oheoh's momma]

prices have really hit us hard... we don't eat ground turkey and grandma has to have meat at every meal. so everything in this house is bought on sale and in bulk...

[mndtrp]

If you are using everything you purchase at the store, yes, it's still cheaper than a comparable meal at a restaurant.

You obviously can't compare a nice homemade burger to a McDonald's $1 cheeseburger, just like you can't compare your Select steak and mashed potatoes to a $60 Prime steak and truffle green beans.

[mauimagic]

Love hearing the food prices on the mainland - reality is of course quite different here..... and it is still soooo much cheaper to eat at home - for me, planning continues to be the key!!

[bunnys]

I spend about $15 making a meal and I eat the same thing for 4-5 nights until it's gone. There is no way eating out would ever come close to the bargain cooking at home is.

Plus, I like my cooking better, I use better ingredients and like Josantoro said, I know where my hands have been.

[ncarr]

another thing to keep in mind is that ingredients like spices and flour last more than once-- you make tons of meals out of them.

[shoiji]

I will keep cooking at home. This always makes eating out more special. Plus I have so many foods I can't eat there is usually very little I can eat at a restaurant.

[Spirit Deer]

Is this a trick question?

[krbshappy71]

Good article!

Rice and beans are still serving me well here at home, though.

[rosey7415]

spirit deer.....not a trick question..........just a conversation starter. can you tell by how many posts i have today that i am bored.....lol

[Spirit Deer]

I was just being facetious, Rosey.

[brennasmom]

Interesting...

We are seeing prices on the climb. DS and I bought some ice cream at the store today for $5.49 (and that was a sale price!).

I think the key is being selective in what you are buying (and cooking). If there is something on sale that we use a lot I will go at the beginning of the week and the end of the week.

It is getting more difficult to find good prices I think. I bought wild salmon from Zaycon about a month ago. So now I have freezer full of salmon. We bought local beef in 2011 and are no longer buying any beef at the grocery.

I was thinking about cost for the pizza I made on Friday night.

* Homemade Crust .50
* 1/2 bag of cheese bought for $1 = $.50
* 1/3 of a red pepper cost $2.00 = $.70
* 1/3 package of salmin bought for $4.00 = $1.33
* 1 can of olives (bought in bulk @ Costco) = $.90
* 1/4 container pasta sauce bought for .68 = $.22

Total cost for one pizza homemade = $4.15... pretty good deal for a yummy homemade pizza