Your produce bill is about to get pricey as the Iran war jacks up US food costs
Smith Collection/Gado/Getty Images
- Grocery prices are rising due to higher fuel and transportation costs.
- Produce, from berries to limes, provides a stark example, USDA data shows.
- Fruits and vegetables that are transported long distances and kept cold are particularly vulnerable.
Your local grocery store's produce section is the latest casualty in the war with Iran.
Wholesale prices for a range of fruits and vegetables, including blueberries, limes, and tomatoes, rose sharply over the past month, according to data from the US Department of Agriculture.
Higher oil prices since the US and Israel started the war in February are largely to blame, people who have studied or worked in the produce industry said.
"Fresh food and perishables are almost like the canary in the coal mine," when energy prices go up, Vidya Mani, an associate professor at the University of Virginia's Darden School of Business, told Business Insider.
Oil and transit costs are affecting a wide range of groceries. The United Nations said on Friday that its food price index rose for the second straight month in March after several months of declines. "Energy-related pressures" pushed up prices across a range of goods, with sugar and vegetable oil notching the largest increases, according to a summary of the changes published on Friday.
Fresh produce, meanwhile, is one of the most energy-intensive categories of products in most grocery stores, said David Ortega, a professor and the Noel W. Stuckman chair in food economics and policy at Michigan State University.
"The biggest, most direct impact on grocery prices is going to be through the price of fuel," Ortega said.
Rising oil prices mean higher diesel prices, the fuel that powers many trucks that haul fruit and vegetables between farms, distribution and processing centers, and stores. Perishable items that need to be kept cold, from berries to milk, are being hit harder, since diesel often powers refrigeration systems on trailers, Ortega said.
"Think specialty produce that may have to make it from, say, California, all the way to the East Coast," he said.
Wholesale fruit prices in Baltimore, one such East Coast market, rose over the past month, according to a Business Insider analysis of USDA data.
The price of limes from Mexico rose 63% between February 27, the day before the US and Israel began strikes on Iran, and March 31, according to the data. Vine-ripe tomatoes from Florida were up 51%, while the price of blueberries from Peru rose 44%.
| Item | Feb. 27 Price | March 31 Price | Percent increase |
| Carambola (Mexico, 1-layer cartons, 25s) | $24.50 | $40 | 63% |
| Limes (Mexico, 10 lb cartons, 48s) | $16 | $26 | 63% |
| Blueberries (Peru, flats 12 1-pt cups, large) | $46.50 | $67 | 44% |
| Nectarines (Chile, 2-layer trays, 44s, yellow flesh) | $22 | $30 | 36% |
| Grapes (Peru, white seedless, jumbo, 18 lb) | $34 | $45 | 32% |
| Raspberries (Mexico, flats 12 6-oz cups, large) | $33 | $42 | 27% |
| Dragon Fruit (Ecuador, red skin/red flesh, 8s, 10 lb) | $39 | $47 | 21% |
| Dates (Israel, Medjool, large, 5 kg cartons) | $48 | $57 | 19% |
| Avocados (Mexico Hass, 60s, 2-layer cartons) | $36.50 | $41 | 12% |
Source: USDA Specialty Crops Terminal Markets Standard Reports
Those increases are "consistent with the impacts that higher fuel prices would have," Ortega said. Many of the increases also outpaced those from the same period one year ago, according to the USDA data.
Still, fuel isn't the only reason fruit prices are going up, he said. President Donald Trump's tariffs, which affect some produce imports from Central and South America, have also increased wholesale prices lately.
Some of those increases are showing up at retailers. Blueberry prices rose 20% year-over-year in the four weeks to March 21, according to market research firm Nielsen IQ. Tomato prices rose nearly 12% at retail, while limes were up 6.5%.
Prices for some produce that travels far to reach stores, such as avocados, or that needs to be kept cold, such as raspberries, were down over the same period. The data include prices at major retailers, including grocery chains, big box stores, dollar stores, and club retailers.
Many grocery stores are likely to pass most of the higher produce prices on to shoppers since they already operate on thin profit margins, said Phil Lempert, a food industry analyst and editor of the website SupermarketGuru.
The short shelf life of produce presents a special problem, Lempert said. If retailers raise prices too much or too quickly, customers will simply buy elsewhere or find alternative products — and potentially force retailers to throw away rotten fruits and vegetables and take a loss on them.
"You're really stuck between a rock and a hard place here," he said of the grocers' position.
Unlike milk or eggs, many produce items are discretionary purchases, Mani said. If prices rise too much or quality suffers, customers might walk on by — especially with essentials like gas rising too.
To justify the purchase, "it at least has to have the freshness," Mani said.
Do you have a story to share about rising prices? Contact this reporter at abitter@businessinsider.com or via encrypted messaging app Signal at 808-854-4501. Use a personal email address, a nonwork WiFi network, and a nonwork device; here's our guide to sharing information securely.