That is a ridiculously large amount to be spending on groceries, even if you eat every meal at home. For comparison, I think I eat quite well and I spend well under $300/month (my goal is $50/week). A lot of this depends on your area, but I highly recommend checking out any ethnic[1] grocery stores in your area. The supermarket I shop at is, large, clean, and has comparable produce for 1/2 the price or less as the conventional supermarkets in the area. This is in Southern California, but I had a similar experience in Austin, TX and south-eastern Michigan, so I think it applies to most places in the US.
Also, organic foods are nutritionally equivalent to conventionally grown foods according to the most recent research; you may want to reconsider your budgeting on that front.
[1] I've been told this is not the politically correct term, but I'm not sure what the right one is; suggestions welcome! What I mean by this in reality is usually something like "Indian/Chinese/Mexican grocer."