U.S. Food Prices Expected to Increase Again this Year

Tuesday, April 14th, 2026 -- 9:01 AM

(Hope Kirwan, Wisconsin Public Radio) U.S. food prices are expected to increase again this year, as market pressures like the war in Iran squeeze the supply chain from farm to grocery store.

According to Hope Kirwan with the Wisconsin Public Radio, the latest report from the U.S. Department of Agriculture shows “food at home” prices are expected to increase 3.1 percent in 2026.

The forecast is nearly double USDA’s projection at the start of the year. At least part of the increase in inflation is due to the conflict in the Middle East and the resulting spike in oil and gas prices. David Ortega, food economist and professor at Michigan State University, said diesel fuel is critical up and down the food supply chain.

“Tractors run on diesel. The majority of the food that gets transported here in the U.S. moves on trucks,” Ortega said. “So these higher fuel costs are translating into higher costs throughout the supply chain, and eventually that’s going to reach the consumer at the grocery store.” He said perishable items, like fresh produce and meat, feel the impact first because refrigerated trucks require even higher levels of diesel.

Items that are primarily imported, like avocados and bananas, also face pressure from needing to travel farther distances within the U.S. Seafood, which is typically transported by air, has also been hit immediately because of the high cost of jet fuel, according to Andy Harig, vice president of tax, trade, sustainability and policy development at FMI, The Food Industry Association.

Impacts from the war could also start to compound over time, Ortega said. For example, the increased cost of oil-derived nitrogen fertilizer could prompt farmers to apply less on their fields this season. Lower crop yields in the fall will mean less feed for livestock and could drive up the cost of beef, which already hit record highs in 2025.

While oil prices improved Wednesday when the U.S. and Iran announced a two-week ceasefire, uncertainty over negotiations has caused markets to remain on shaky ground. Harig said it remains unclear how long the conflict will last and how severe the damage will be to the global supply of oil and gas.

But he said food processors and retailers know one thing for sure: “It’s going to impact prices, and it’s going to be in a longer window than just the day the war ends,” he said. The Consumer Price Index for March showed grocery prices are 1.9 percent higher than during the same month last year.

Overall, food at home prices fell slightly from February levels. The cost of eggs continued to come down significantly, dropping more than 3 percent from the previous month.

But fruit and vegetable prices were up 1 percent. Restaurant prices in March were 3.8 percent higher than the same month in 2025. The cost of “food away from home” is expected to increase by just under 4 percent for the year, which Ortega said is driven by the rising cost of labor.

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