Key Points:
- Food prices are rising faster again. And judging by the latest data, this is not the limit yet.
- In March, inflation in the US food and beverage sector reached 7.9% year-over-year. This is the sharpest jump in the past year.
- At the same time, current figures may not reflect the full picture. The main growth so far is due to higher fuel prices. But there are other factors that have not yet reached the consumer.
For example, fertilizer prices have already risen sharply. The cost of urea has almost doubled since February and is approaching the highs of 2022.
Plastics used in packaging are also getting more expensive. All this is gradually passed on to the final price of goods.
Additional pressure is coming from the agricultural sector. In 2025, the number of farm bankruptcies in the US increased by 46%. This is the third consecutive year that the figure has risen.
As a result, the market may face a new wave of price increases that is just beginning to emerge.
Why Food Prices Are Rising
Tomatoes have become the most expensive. Over the year, their price increased by 102%. Vegetables overall added about 90%, and diesel jumped by 88%.
The overall index also accelerated sharply. Compared to February, the growth was almost 3.7 percentage points.
A separate problem now is fertilizers. Urea, which is widely used in agriculture, has almost doubled in price since February. It now costs about $900 per ton. The market has not seen such levels since 2022.
According to a survey by the American Farm Bureau Federation, about 70% of farmers will not be able to buy as much fertilizer as they need. The reason is simple: prices are too high.
Even before this, the situation for farmers was already difficult. In 2025, the number of bankruptcies increased by 46% and reached 315 cases. This is the third consecutive year of growth.
Economist Samantha Ayub notes that losses in crop production will persist for at least another year. There is also pressure in livestock, where margins continue to shrink.
‘Farmers’ incomes have been falling for the fourth year in a row. This increases dependence on loans, and access to them is becoming more difficult,’ she writes.
Farm bankruptcies. Source: American Farm Bureau Federation
The Situation in the Strait of Hormuz Increases Pressure
The situation around the Strait of Hormuz is creating additional pressure on the market. This is one of the key routes for exporting raw materials, including fertilizer components.
Problems in the region have already begun to affect supplies. This affects not only the US, but also countries with developed agriculture, such as India. The shortage may affect planting decisions, especially in the important season.
See Also: After the Attack, Litecoin Issued a Statement, but the Version With a Previously Unknown Vulnerability Raises Doubts
According to Baker Hughes, the strait may not return to normal operations until the second half of 2026. The company believes that tensions between the US and Iran will persist at least until June.
The market has similar expectations. In a survey by the Dallas Fed, nearly 80% of energy sector representatives said that restrictions could last until August or longer.
Against this background, pressure on prices is only increasing. Fertilizers are getting more expensive, and the number of farm bankruptcies has been rising for the third year in a row.
If the supply situation does not change, food price growth may continue even after the March jump.
