Drought: 5 money-saving tips to avoid food inflation

Marion Kujawa looks over an ear of corn picked from one of his fields on July 16, 2012, near Ashley, Ill. / Scott Olson/Getty Images

(MoneyWatch) Severe drought across much of the U.S. is likely to produce steep inflation for a wide array of goods, from gasoline to beef, says Steve Cunningham, an economist with the American Institute for Economic Research.

Pictures: Severe U.S. drought by the numbers

That's because corn -- a crop that has been decimated by drought -- is used as feed for beef and poultry; is manufactured into ethanol, a gasoline additive; and is cooked into corn syrup, a sweetener in everything from cereals to ketchup. And, of course, that doesn't count corn's simple uses, whether to be eaten alone or made into anything from chips to tortillas.

However, a few swift moves by government and consumers can help sidestep most of the inflationary pain,  Cunningham says. Roughly 40 percent of the nation's corn crop is used to produce ethanol. This corn-based fuel has been a legally mandated additive to the nation's gasoline supply in most states for more than a decade.

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Getting government to ease that requirement would free up millions of bushels of corn to use as food and feed, alleviating the worst of the drought's inflationary impact. However, if government fails to ease the ethanol requirement, consumers can still avoid taking too much of a hit stemming from the scorched corn harvest. And some of the moves may even make you healthier.

"We spend about 35 percent of our everyday expenses on food," Cunningham says. "Even the price of wheat and wheat-based products could be affected as people substitute wheat products for corn."

With the drought expected to continue at least until November, here are five money-saving tips for avoiding the impact of inflation:

Stock up on beef and chicken now, because farmers may slaughter more livestock in the next few weeks to avoid the higher prices of feed. That could create a temporary drop in beef prices before prices start to soar this fall.

Avoid processed foods, many of which include high-fructose corn syrup as an additive. Not only is the additive fattening, it's likely to become increasingly expensive, pushing up the costs of all sorts of processed foods.

Eat fruit. The hot temperatures that have damaged the corn crop have been great for fruit farmers, so eat grapes. 

Substitute. Oatmeal makes for a healthier breakfast than Fruit Loops, and it's a fraction of the cost. Fish is a healthier alternative than beef, and it's completely unaffected by the drought. Other foods that use simple sugar, instead of corn syrup, are also likely to avoid the big hike in cost that could result from a corn shortage.

Go local. If you don't live in the drought-plagued areas, buying fruit and vegetables from local farmer's markets -- and even livestock, poultry and eggs from local farms -- can save a bundle.

[randeg]

Thank you so much for helping us save a bundle. The author has carefully chosen what to save on for in most cases there is the added bonus on becoming healthier while saving for the coming drought. This is the kind of post we love because it helps families at the time when they need it the most.

Evelyn Guzman
http://www.debtchallenges.com (If you want to visit, just click but if it doesn't work, copy and paste it onto your browser.)

[buckyc100]

Just so you know, the type of corn (field corn) that is used to produce ethanol or feed livestock is not the same type of corn (sweet corn) that we eat or use to make tortillas. The advice you provided is spot on.

[steve-1953]

Not going to happen. Silly article
a simple Google search reveals in all.
http://www.huffingtonpost.com/2012/08/24/ethanol-mandate-corn-drought_n_1826740.html

[JeffP7]

Silly response to an article. My simple Google search produced several news sources that confirm everything that this author has pointed out in this OPINION piece...

[Shadeburst]

What a stupid Huffpuff article. Just because repealing the ethanol mandate won't bring immediate results doesn't mean it's not idiotic legislation. An extremely simplistic opinion piece written by Wall Street experts not agricultural and food science experts.

[arreis001]

I already avoid corn fed beef and the many foods made from corn or that have additives derived from corn since I recently learned about all the GMO (Genetically Modified Organism) corn on the market. Corn, in some form is used in most of the foods we buy so no wonder food prices are expected to rise from the drought. We have no idea all of the additive terms made from corn so it will be really hard to avoid products made from corn. If you substitute oatmeal for Fruit Loops like the artical suggests, check the ingredient list on your oatmeal...if it is an artificially flavored oatmeal it probably has corn in it in some way. Look for pure, whole foods like "steel cut oats" if you want to avoid corn.

[DeclanSh]

Spot on article. In 2011, the United States converted 39 percent of its corn crop into fuel which has disasterous global consequences. As a matter of fact it takes 1.25 gallons on fossel fuel to produce 1 gallon on ethenol, so the whole premise is completely flawed.

[patricia1148]

It's always refreshing to read your articles,as always thank you for the great tips and advise.

[steve-1953]

http://www.huffingtonpost.com/2012/08/24/ethanol-mandate-corn-drought_n_1826740.html

[est-aier]

From the folks over at AIER.org, thanks for the great article.