The cost of food in the U.S. faces a steep rise due to increasing oil prices and war-induced supply disruptions. According to economist Justin Wolfers, while oil is the current focus, food costs are the next major issue.
Oil prices have surged over 50% since the conflict started on February 28, raising gas prices nationwide to an average of over $4.50 for the first time since 2022. Farmers are dealing with higher fertilizer and fuel costs, tariffs, and a disappearing workforce. These challenges indicate that the next significant price increase might occur at the grocery store rather than the gas pump.
Food Prices: Current Trends
Before the conflict, inflation on food staples was already a problem for American households. According to the Bureau of Labor Statistics, annual headline inflation rose from 3.3% in March to 3.8% in April, marking the highest level during Donald Trump’s terms. The energy index increased by 17.9% since April 2025, with food prices up by 3.2%. The cost of groceries alone saw a 0.7% rise in April, marking the largest monthly increase since early 2022.
Shipping disruptions in the Strait of Hormuz add to these pressures, as the strait remains largely closed despite negotiation efforts. The worst impacts on groceries are still on the horizon.
Why Grocery Prices May Rise Further
Around one-third of the world’s seaborne trade in fertilizers passes through the Hormuz Strait. Disruptions have increased U.S. prices by about 20% since the conflict began, as reported by the Green Markets Weekly North America Fertilizer Price Index. The World Bank expects global fertilizer prices to rise by 31% in 2026, primarily because of a 60% hike in urea prices, affecting farmers’ incomes and future crop yields.
Although poorer nations may suffer more, U.S. farmers are concerned, especially during the planting season. An April survey from the American Farm Bureau Federation revealed that 70% of farmers can’t afford all necessary fertilizers, compounded by a 46% increase in farm diesel costs since the war began. The Department of Agriculture has adjusted food price forecasts for 2026 to reflect these challenges, with some increase projections unchanged or lowered.
Chris Barrett, a professor of economics and agriculture at Cornell University, stated that Americans haven’t fully experienced the impacts of the fertilizer supply disruption yet. These effects will appear from late summer through winter as harvests from India, Thailand, and Vietnam diminish. By late 2026, he anticipates food price inflation to reach 11% annually, affecting families struggling to provide meals.
Agricultural economists Ken Foster and Bernhard Dalheimer emphasized that pre-conflict conditions were already raising food prices. The war’s impact goes beyond fertilizer costs, affecting diesel, petrochemicals, and electricity.
“When energy costs rise, every category is affected at once,” they said. The impact on food prices will be slow to decrease, posing a significant risk to low-income households.
Future Considerations
There are few signs that the conflict will end soon, with skepticism on both sides of the negotiations. President Trump expressed no urgency to make a deal with Tehran, although he is open to a limited agreement to reopen the Strait of Hormuz.
Foster and Dalheimer remarked that the conflict’s impact on food prices heavily depends on the duration of the waterway’s closure to commercial shipping.