That sounds pretty cheap to me.
Are you including household items, like lightbulbs, tp, cleaners, laundry detergent? Perhaps if you post the sorts of meals you make and what you make from scratch, others could help with more suggestions. I agree that buying things like baking soda, flour, sugar, vinegar, organic peanut butter, loaves of bread, and some produce can be well done at Costco or Sam's Club.
The next thing you might want to do it learn about couponing. hotcouponworld.com is a really informative place. You really can save money, even buying basics.
Pay attention to your weekly grocery flyers and buy stuff when it's 2-for-1, freeze multiple meals, etc.
I think that most families who spend less than $200 a month supplement with things like WIC and footstamps.
For more cheap meal ideas, you might want to check out this thread:http://www.mothering.com/discussions...d.php?t=520224
or the $5 dinners blog:http://www.5dollardinners.com/2007/01/recipe-index.html
A lot of people also supplement with gardening. Or join a CSA (community supported agriculture group) and get your produce organic and cheaper, generally.