Spiking food prices

Inflation at the grocery store is spiking, and most agriculture and food economists believe it’s only going to get worse. But unlike the inflation we experienced in the wake of the COVID-19 pandemic, which was global and had more to do with pandemic-related shortages than government policy, this latest round of food inflation is being experienced as a direct result of policies being implemented by the Trump administration.
It’s ironic given that most pre-election polling showed the price of groceries was Trump’s top issue — and he promised he’d be bringing down grocery prices on Day One.
It hasn’t worked out that way. Indeed, food prices jumped in August at the highest rate in three years, according to the latest report from the federal Bureau of Labor Statistics.
Trump’s illegal tariffs and his crackdown on migrant agricultural workers are the two biggest factors pushing prices higher, according to economists. Some of the most popular grocery items have been hit especially hard by Trump’s policies. The price of coffee surged by 3.6 percent in August alone and is up 21 percent since Trump took office. And look for coffee prices to jump even higher in the months to come, since Trump enacted a 50-percent tariff on products from Brazil, our biggest supplier of coffee. Bananas, which like coffee don’t grow in the U.S., have also been hit with tariffs, pushing prices up 2.1 percent in August alone.
Other produce is being hit just as hard. Apple and lettuce prices jumped 3.5 percent in just the month of August, while tomatoes were up 4.5 percent on the month. Monthly increases on this scale would translate into annual inflation of 25-40 percent on many of these items, all of which is far above the level of inflation we experienced post-COVID.
During the 2024 campaign, Trump promised that his tariffs would prompt other nations to open their markets to U.S. goods, which would help to bring down tariff rates for imports of their products into the U.S. But while a few countries have reached deals, they haven’t come nearly as quickly as Trump promised, and high tariffs (which consumers here generally pay) are continuing for the foreseeable future, which is likely to keep the price of many imported foods high.
While tariffs are a major driver of the spike in food prices, the Trump administration’s ruthless attacks on both legal and illegal foreign workers, has been making it increasingly difficult and expensive for produce farmers to find workers willing to pick their crops. That affects supply, which results in higher prices in the checkout lane. The worker shortage is only going to worsen as the administration’s hunt for immigrant workers intensifies.
Right now, many growers and food importers are willing to eat some of these higher costs, in the hopes that they can retain their markets while waiting for conditions to change. But if the tariffs continue long-term, many growers and importers won’t be able to sustain their losses and will need to raise prices more than they have already. That means we can expect that prices not only won’t come down anytime soon but are likely to continue to rise.
The Trump policies that are pushing prices higher come at a time when non-policy factors are contributing to the rise. The spread of the bird flu pushed egg prices to record highs earlier this year and while prices have come down since the peak, they were still up 11 percent in August over the same time last year.
Adding to shoppers’ misery, beef prices are at record highs, fueled mostly by lower U.S. beef production as a result of ongoing drought in many beef-producing regions. Beef imports could help relieve the pain at the grocery store, but Trump has hit Brazilian beef imports with a 76-percent tariff. Given that the U.S. has run a trade surplus with Brazil in recent years, one might wonder why Trump has set tariff rates on imports from the country so high. It turns out it has nothing to do with trade but is based on Trump’s desire to punish the South American country for its successful prosecution of former president Jair Bolsonaro, who was convicted for his role in seeking to overturn the results of the most recent Brazilian election, much as Trump did after losing in 2020. Trump sees Bolsonaro as a fellow authoritarian, one that he hopes to free through the economic pressure he can apply to the country. The fact that his efforts are contributing to higher beef prices for Americans is beside the point. With Trump, it’s authoritarians first. American consumers, who he promised to help to get their votes, no longer matter at all.