Gosh, I'm spending barely $450-500 for a family of three.
As for examples, pork belly is still very cheap, even since it came into fashion a few years ago, and is much more flavoursome than other cuts. Chicken legs are much cheaper than chicken breast, despite the former having more flavour. Rump steak is more flavoursome than Sirloin. Offal can be delicious, too, and despite its cheapness it is used in the very best restaurants without compunction. You simply have to know what you're looking for.
Not everything needs to be organic. Some foods usually have low levels of pesticides. And while Whole Foods has high quality food, it is usually pretty expensive. You can get high quality food for less money elsewhere.
That said, at least your food is probably healthy and high quality.
In any case, agreed that you don't have to spend an arm and a leg to get healthy food. Expensive often doesn't even indicate better food, just more aggressively marketed at suckers that'll pay more.
Vegetarianism is not healthy.
http://www.ncbi.nlm.nih.gov/pubmed/10627874
There is much more research on the topic.
It has also been shown that the same benefits arise from "flexitarianism", or limited meat consumption.
One of the first things here is to be smart when you shop. It takes time to find good places, and I'm even commuting 20 miles every two weeks for some grocery shopping, but I can buy high quality food very inexpensively. 20 miles sounds like a great deal, especially, when you'll think about the average total in the receipt (rarely less then $150-200).
And the second thing, organic is a buzz. Buying organic doesn't automatically mean you are buying healthy food. Buying non-organic labeled stuff, doesn't mean you're buying crap.
Whatever, eating habits are eating habits, and I'm not here to change minds. :) I still think that $500/month for a family of three is pretty much enough. However, I can't argue with the fact, that you can spend unlimited amount of dollars on food -- sky is the limit.