(Bloomberg) — As Americans confront a surge in prices at the pump, another inflation wave is headed for the grocery store.
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A combination of factors including bad weather, tariffs and a dwindling cattle herd are already pushing up grocery prices at an above-average pace. In April, they rose by the most in nearly four years, and economists say the impact of the Iran war and a potential El Niño weather pattern will only add to pressures into 2027.
The hit to US household finances from higher grocery bills is set to intensify just ahead of the November midterm elections, amplifying affordability as a defining issue. And to a greater extent than the surge in gas prices, the slower-moving food shock will be difficult to reverse quickly because the size of autumn harvests is determined by planting decisions made in the spring.
“It’s going to be a challenging year,” said Ricky Volpe, an agribusiness professor at California Polytechnic State University who previously worked at the US Department of Agriculture’s Economic Research Service. “Food is going to become less affordable, and consumers should be prepared for it.”
The latest USDA food price outlook, published Friday, projected a 3.2% advance in grocery prices this year, while Volpe said he expects inflation more on the order of 4% to 4.5%.
James Giese of Madison, Wisconsin said he lives on his own but is making adjustments with rising grocery prices like cutting back on prepared foods and meat. Giese, 62, is even trying to grow potatoes in his backyard to supplement his food budget.
“I’m very concerned,” he said. “I’m probably considered middle-income, but it’s starting to pinch.”
Outsize price increases so far in 2026 have reflected a mix of bad luck, trade policy and slower-moving pressures linked to climate change. The weather in particular has not been kind to American farmers, who have endured outbursts of record-breaking heat, historic cold, ping-pong size hail and wildfires.
The US saw its warmest-ever start to the year, with temperatures running about 6F (3C) above average through the end of April, according to the National Centers for Environmental Information. The early heat prompted some domestic crops to begin blossoming weeks ahead of schedule instead of remaining dormant throughout the winter, leaving them exposed to subsequent frosts, according to Brad Rippey, a USDA meteorologist.
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Beef prices, among the most politically sensitive in the US, rose to a record in April thanks to the smallest cattle herd in 75 years, squeezed by drought and high production costs.
Tomato prices, meanwhile, surged 33% over the last two months after two winter storms brought widespread damage during the peak of the growing season in Florida — while shipments from Mexico were declining following the Trump administration’s imposition of duties on imports.
Heat and drought in the western and central US spell more pressures to come. California accounts for almost half of annual US vegetable and three-quarters of fruit and nut cash receipts, and diminished snowpack in the Sierra Nevada this year — to just 23% of typical levels as of mid-April — has raised concerns about irrigation supplies.
Drought has also spread across the nation’s breadbasket, where staple wheat crops that are typically used to make all-purpose flour or pasta have withered for lack of rain. As of May 19, 70% of US winter wheat production was in areas of drought, along with 25% of corn production, according to the National Drought Mitigation Center at the University of Nebraska-Lincoln.
And forecasters now say an El Niño weather pattern is likely to emerge by August, with rising odds of an unusually powerful event that will persist into 2027 and push global average temperatures higher. El Niño can often steer extra rain to California, but it’s also been known to fuel drought outside the US in major growing areas for rice, coffee, cocoa and more.
Then there’s the war, which has brought a massive shock to global fertilizer markets due to the Middle East’s role as a major supplier of inputs.
Prices of fertilizer are up 20% since the war began, according to a Green Markets index for North America. That will likely mean higher prices come harvest time, and if farmers decide to scale back applications, that would also leave crops less able to withstand heat, drought or flooding.
The higher cost of fuel itself will also find its way into prices on store shelves as farmers and carriers pay up for diesel to power tractors and trucks, and petroleum-based plastic packaging becomes more expensive.
Major grocery chains have been trying to hold the line on pricing. Kroger Co.’s chief executive officer said it’s planning a price-cutting push to compete more fiercely with Walmart Inc., which has expanded its efforts to keep prices low over the last year.
Consumers are already worn out because prices have continued to climb even though the rate of food inflation has come down, said Andrew Harig, a vice president with the trade group FMI, the Food Industry Association.
At the same time, household debt is rising, the personal saving rate is falling, and real average hourly earnings fell in the 12 months through April for the first time in three years.
“Lots of people, I think, still look at their pre-Covid grocery bill in 2019, early 2020 and say, ‘Wow, I’m paying significantly more,’” Harig said. “And so they’re feeling that stretch.”
–With assistance from Kristina Peterson, Ilena Peng, Augusta Saraiva, Jaewon Kang and Jonathan Roeder.
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