Five Money-saving Tips to Avoid Food Inflation

(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.

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....

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.

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