Lately, I have been hearing that based on the commodity futures, prices on items will be going up on some of the staples that we buy at the grocery store. I've always been intrigued by this market and decided to look into these more as a way to save money.
There are 7 sections of the futures market: Currencies, Energies, Financials, Metals, Grains, Meats and Softs - I'm going to look at the Softs area as a way to save money while shopping. I figure that even knowing a month in advance that prices are going to start to climb, then I want to pick up the good deals now instead of waiting.
Taking a snapshot of this Softs list we have: Cotton, Orange Juice, Coffee, Sugar, Cocoa and Lumber
Cotton has a price that is going up for December and I'm thinking that anything made with cotton is going to be going up in price for the new year. That would include clothes, bath towels, some tennis shoes, bedding, cotton swabs/balls, furniture and rugs.
For those bigger purchases that are put off in the hopes that prices might go down, with cotton prices contracted to go up, buying sooner than later may help in the decision making. January is already considered a good time to buy furniture, carpet and bedding with the white sales and new styles coming in for the new year. You would be able to pick up good deals on clothes at the thrift stores, as always.
Orange Juice or rather orange growing season appears to peak in the winter months. Normally when produce is in season the prices go down, but perhaps there is a mini orange juice bubble on the horizon and people are putting money into the industry which is making it go up higher than it has in the last 2 years. So if you see a good price on oranges and orange juice concentrate, grab it and stock up.
Coffee looks like it has a nice jump with a 13-year high and Starbucks and McDonalds have already announced their plans to pass the coffee increases to customers. And based on a few items I have read, the prices don't appear to be stabilizing anytime soon. So if you have wanted to wean yourself off of high priced coffee and learn to make it at home, now is a good time.
Sugar has two sections, they are sugar #11 and sugar #16. Sugar #11 is the raw sugar, before processing and before what we buy in the store. And sugar #16 are the prices given to processors, consumers and merchants.
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Cocoa has had a huge jump, but is still lower than a year ago. With the prices at their lower end right now, I'm stocking up on dark chocolate powder and making my own mocha coffee at home.
Lumber is the last Softs futures commodity on the list and they appear to be remaining high and stabilized. Obviously not much building is done in the winter and the price isn't as high as it has been in Feb - April of 2010, but again a good way to help make decisions on whether to build the deck to the house now or later.
With many of these price increases impacting the staples in our daily life, not mentioning the grains futures, you may want to begin cutting costs, if you aren't already. And for the eating-out-at-lunch crew, restaurants and fast food chains will be passing on the increases to consumers as well.
* Switch to Generic brands
* Clip coupons to items you already buy
* Consider warehouse membership or splitting one with a friend/family
* Freeze your bulk purchases
* Pack your own lunch
* Brew your own coffee
* Set aside money to stock up on staples (grains, coffee, orange juice, sugar, milk)