U.S. Grocery Prices Rise 2.9% in April from Year Earlier, Labor Department Reports

By Associated Press Staff

WASHINGTON (AP) — Prices for food purchased for home consumption in the United States increased 2.9% in April 2026 compared to April 2025, according to the Labor Department's Consumer Price Index (CPI) released on May 12, 2026. This marked the highest year-over-year rise for that category since August 2023.

Overall food prices, including those at restaurants and other establishments offering prepared meals, rose 3.2% over the same 12-month period, the CPI data showed.

Fuel prices contributed to higher costs along the food supply chain. A U.S. military naval blockade of the Strait of Hormuz, announced and imposed in late April 2026 in response to the ongoing war with Iran, has disrupted passage for cargo ships carrying oil and other goods through this key global shipping corridor. Diesel fuel, used in fishing boats, tractors and trucks that transport agricultural products, averaged $5.12 per gallon nationwide as of May 12, 2026, according to AAA data — a 61% increase from the prior year.

Raymond Campise, owner of Sparrow Market, an independent grocery store in Ann Arbor, Michigan, reported that meat, produce and dry goods suppliers recently added fuel surcharges to deliveries. He also noted increases in wholesale prices for meat, produce and certain other products.

"Independent markets operating on narrow margins face significant challenges from even small cost increases," Campise said.

Economists at Purdue University, Ken Foster and Bernhard Dalheimer, stated that the full effects of elevated energy costs on retail food prices typically emerge over three to six months, as higher production, processing, storage and transportation expenses gradually reach supermarket shelves.

"Most of what we're seeing now in the food price chain probably predates the conflict," said Foster, a professor of agricultural economics. "We're cautiously waiting to see what the June numbers and the May numbers might show ... in terms of the extent to which energy shocks in the Strait of Hormuz and shipping disruptions are going to impact food prices."

The CPI tracks retail prices paid by urban consumers for items such as meat, bread, milk, produce and other staples. Over the past 20 years, grocery prices have risen an average of 2.6% annually, according to U.S. Department of Agriculture (USDA) data.

Energy-related pressures tend to affect perishable and refrigerated items more quickly than packaged goods. In April 2026, urban consumers paid 6.5% more for fresh fruits and vegetables than in April 2025, and 8.8% more for meat, per Labor Department figures.

Other factors also influenced food prices over the year. In July 2025, the Trump administration applied a 17% tariff on fresh tomatoes imported from Mexico; consumer tomato prices subsequently rose 40% in the 12 months ending April 2026.

Dry conditions in the Western U.S. contributed among other elements to a 15% year-over-year increase in beef prices in April 2026. Coffee prices rose 18.5% over the same period, in part due to droughts and adverse weather affecting global production in recent years, according to USDA reports.

"Today's CPI showed that food prices have been rising 3.2 percent in the past year, but the story behind that number is more complicated than just an energy shock," said Dalheimer, an assistant professor of macroeconomics and trade in Purdue's Department of Agricultural Economics.

Some food categories saw stable, flat or declining prices over the 12 months. Milk and chicken prices dipped slightly. Butter cost 5.8% less in April 2026 than a year earlier. Egg prices fell 39%, as farmers replenished flocks reduced by an ongoing avian influenza outbreak, per USDA data.

Food prices and inflation more broadly are expected to play a role in the November 2026 midterm elections. During his 2024 presidential campaign, then-candidate Donald Trump frequently referenced grocery items such as bacon, cereal and crackers to highlight cost-of-living concerns.

Higher fuel costs have strained certain producers. The Southern Shrimp Alliance, representing shrimpers across eight states, reported that some vessels remained docked this spring, as diesel expenses exceeded potential shrimp catches. Fuel accounts for 30% to 50% of U.S. shrimpers' costs, but with domestic production supplying just 6% of U.S. shrimp consumption, options to pass on costs via price hikes or surcharges are limited, the group stated.

Fuel price increases may also affect other areas. April's 5% year-over-year rise in nonalcoholic beverage prices could partly stem from petroleum derivatives used in plastic bottles, Foster noted.

"It's possible some of that's starting to seep down the supply chain and get into those prices," he said.

Looking ahead, fertilizer prices — with about 30% of global supply transiting the Strait of Hormuz — could elevate food costs over the next year or longer. U.S. farmers largely secured fertilizer stocks before the war escalated, mitigating immediate effects this planting season, according to Foster. Prolonged conflict, however, might influence future crop choices.

"I expect the Iran conflict to impact the coming years' food prices through a couple of channels. One, the energy costs and transportation handling. The other would be through packaging costs," Foster said. "If the conflict were to last longer, then we might see more coming online as fertilizer prices start to impact longer-term planting decisions and cropping decisions."

The Labor Department emphasized that April CPI data largely reflects pricing dynamics through mid-April, preceding the full implementation of the Hormuz blockade. USDA analysts echoed the Purdue economists' lag estimate, noting in a May 2026 report that supply chain adjustments for energy disruptions often require multiple months to fully materialize at retail.

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