U.S. consumers spent more on groceries last month, though gasoline price jumps linked to the Iran conflict represented just one contributing element.

Food purchased for home consumption increased 2.9% in April from the prior year, government data released Tuesday indicated. This marked the steepest annual rise in that category since August 2023.

Costs at eateries, quick-service outlets and other spots offering ready-to-eat meals rose as well, driving total food prices up 3.2% over the past year, according to the Labor Department’s consumer price index.

Gasoline costs have surged as the Iran war disrupts passage through the Strait of Hormuz, a critical route for worldwide oil shipments. Diesel powers fishing vessels, farm equipment and trucks hauling 83% of American farm goods. As of Tuesday, the national average per gallon stood 61% higher than a year earlier, AAA reported.

Vendors supplying meat, fresh produce and dry goods to Sparrow Market, an independent store in Ann Arbor, Michigan, recently tacked on fuel surcharges to deliveries, owner Raymond Campise explained. Wholesale rates for meat, produce and select other items have climbed too, he added.

"For independent markets operating on narrow margins, even small increases can have a major impact," Campise said.

The complete effects of escalating energy expenses on U.S. food retail prices have yet to materialize, Purdue University economists Ken Foster and Bernhard Dalheimer noted. Elevated production, processing, storage and transport costs often require three to six months to filter through to store shelves, where prices tend to adjust downward gradually, they explained.

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

The consumer price index tracks shifts in retail costs for meat, bread, milk, fruits and vegetables plus other basics in U.S. urban areas. Across the past two decades, grocery prices have averaged 2.6% annual growth, per U.S. Department of Agriculture data.

When energy pressures mount, prices for perishables and chilled items typically outpace those for shelf-stable products. Urban shoppers paid 6.5% more for fresh fruits and vegetables last month than the year before, and 8.8% more for meat, Labor Department figures showed.

U.S. trade measures and harsh weather have further strained food costs over the past year. The Trump administration levied a 17% tariff on Mexican fresh tomatoes in July 2024; consumer prices jumped 40% in the 12 months through April.

Persistent drought across the western U.S. contributed among other elements to beef prices that stood 15% higher year-over-year in April. Coffee costs rose 18.5%, in part from droughts and related weather woes curbing global output in recent seasons.

"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.

A few food categories held steady, flatlined or eased over the year. Milk and chicken prices edged down slightly. Butter averaged 5.8% cheaper in April than 12 months prior. Eggs dropped 39% as producers restored flocks hit hard by persistent bird flu.

Food costs alongside wider inflation stand poised to influence November's midterm elections. In his 2024 bid, President Donald Trump repeatedly highlighted bacon, cereal, crackers and similar grocery items as grounds for voters to reinstate him.

Certain food operations report strains from fuel hikes. The Southern Shrimp Alliance, advocating for shrimpers across eight states, noted some vessels stayed docked this spring, unable to harvest enough to offset diesel expenses.

Fuel accounts for 30% to 50% of U.S. shrimpers' expenses, yet with their catch comprising just 6% of domestic shrimp supply, options to hike prices or impose fuel fees remain constrained, the group stated.

Rising fuel may affect food pricing through additional routes. April's 5% year-over-year gain in nonalcoholic beverages could partly stem from petroleum-based plastics used in bottling, Foster suggested.

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

Looking ahead over the next year or beyond, U.S. food prices might climb further from soaring fertilizer rates, given that roughly 30% of global supply routes through the Strait of Hormuz.

Fertilizer strains weigh less on American growers this season, as many secured stocks pre-war, Foster observed. Impacts could sharpen next year should the conflict persist, he added.

"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."