Grocery shock on the horizon for U.S. elections as Iran war drags on

Rising grocery prices in the U.S. as the result of the Iran war could be among the most politically damaging outcomes of the conflict just months before a critical U.S. election. 

Two years earlier, President Donald Trump won reelection after hammering the high costs of eggs, bacon and other grocery store staples. Now he and the Republican Party may be faced with even higher food prices as they try to retain control of Congress in this year’s midterm elections.

Democrats are looking to capitalize on the spike by pinning it on Trump’s decision to go to war, while Republicans are choosing their words to downplay economic forecasts of higher prices for the fuel and fertilizer needed to produce and ship the food voters eat.

“Our messaging is affordability and accountability,” Rep. Jared Huffman, D-Calif., the ranking member of the House Natural Resources Committee, said in an interview. “It’s a pretty tailored message, pretty narrowly focused, and on both of those pillars, Trump is making our arguments even more compelling.”

“There are a number of ways in which this president is driving up food and energy costs and fueling the affordability crisis,” Huffman said. “On all of these fronts, we would have a chance to rein in the craziness. I really think it sets up in a very compelling way for Democrats in this election.”

The war and the subsequent closure of the Strait of Hormuz by Iran have rocked the global economy. Oil and gasoline prices have soared, fertilizer costs have spiked and markets have plummeted. 

The next shock could come at the grocery store, a crucial pain point for millions of Americans who have already weathered years of increased food prices. All of this is happening as election season kicks off with primaries and campaign trail messaging. This year’s elections will be viewed as a referendum on Trump, who came into office vowing to lower food costs. 

“It just pisses them off more,” said Rep. Vicente Gonzalez, a South Texas Democrat, told CNBC in an interview when asked about how voters will react if food gets more expensive. “When people hear that, they’re like ‘hey, I can’t pay for groceries and you want to go pay for a war in the Middle East?’ I think that’s going to be a tough sell.”

Gonzalez, who already represents a swing seat, saw his district get significantly redder this election cycle after Trump ordered Texas to redraw its congressional district maps to benefit Republicans. The expected price hikes at the grocery store only buttress the affordability narrative that has overcome the midterm contest.

Food faces a number of new inflationary pressures due to the Iran war and the closure of the Strait of Hormuz. The increase in oil costs is raising the price of diesel, necessary for farmers and the trucks and railroads that carry food across the country. Fertilizer is also being choked by the closure of the strait. And even plastic, a petrochemical product that’s commonly used in food packaging, could also contribute to higher checkout costs. 

Those factors are likely to lead to rising costs for consumers, economists warn. 

“The price of food is going to move quite a lot,” said Kjetil Storesletten, an economist and professor at the University of Minnesota, where he is the director of the Heller-Hurwicz Economics Institute. “If you put those things together, that it’s a big chunk of the price of producing food and that the price increased a lot, it suggests that all of the increased price in fertilizer is going to be passed through to food.” 

The impending spike in food prices likely won’t be immediate, but could hit before the time voters go to the polls in November. Farmers in the Northern Hemisphere are preparing to plant their crops now, meaning any associated spikes associated with this year’s harvest will take time to register.

“The amount of grain on the market now is unaffected by the price of gas and the price of fertilizer,” Storesletten said. “But for the new corn and the new grain that gets planted, it’s going to matter.” 

“It would really help if we could open the Strait of Hormuz now. But imagine it remains closed until the summer. We will see substantial increases in food prices,” Storeslettsen said. Crops are typically harvested at the end of summer and the beginning of fall, which is when prices would be expected to creep upward, Storesletten said.

Other grocery goods, such as fresh produce, which have more complex supply chains and require refrigeration throughout, could be hit with a double whammy of cost increases. That’s because, unlike grain, fresh produce requires energy to refrigerate in both storage and transport, and energy prices are spiking now.

“Because produce has to be shipped and kept refrigerated, it can’t be stockpiled,” said Max Teplitski, chief science officer at the International Fresh Produce Association, a trade group whose members include grocery stores and other retailers and fruit and vegetable producers. “There’s a significant energy cost just to keep it on the shelf or in storage, and as those energy prices rise, they are likely to drive higher prices for consumers.” 

Teplitski said further economic hurt could be felt the longer the strait stays closed, like an increased price for plastics. Many food goods are stored in plastic containers.

“Domestically, much of plastics production relies on natural gas,” he said. “But as oil is taken out of the equation, natural gas becomes more of a premium commodity, with less available for uses like packaging. So, we’re starting to see these secondary effects begin to cascade.”

Republicans in Congress admit that the war and the closure of the strait are likely to raise food prices.

“I think any disruption in terms of the transportation of feedstocks, of inputs, any restriction, could certainly wind up impacting the consumer,” Rep. G.T. Thompson, R-Pa., chair of the House Agriculture Committee, said in an interview. “That’s pretty obvious.” 

Trump, in a speech to the nation Wednesday night, didn’t give any indication of U.S. moves to reopen the strait quickly.

“The countries of the world that do receive oil through the Hormuz Strait must take care of that passage,” he said. “They can do it easily. We will be helpful, but they should take the lead in protecting the oil that they so desperately depend on.”

Options for Republicans and the White House to limit the food price spikes are limited, however. Most point to opening the Strait of Hormuz or ending the war quickly to limit the damage. 

Food has been a stickier part of the inflation story that has dogged U.S. consumers since 2022. In February, food inflation sat at 3.1%, down from a high of 11.2% in September 2022, but still higher than general inflation, which clocked in at 2.4%. 

That’s because food, whose pricing is generally more volatile than other goods consumers purchase, is reliant on a number of external factors to keep costs low. Storms, droughts and other natural disasters can affect harvests, lowering supply. Herd sizes, like the shrinking U.S. beef cattle herd, can also affect prices at the grocery store — beef has skyrocketed in recent years.

It’s a similar quandary that former President Joe Biden found himself in during the 2024 election, when egg prices jumped after an avian flu outbreak that choked off the supply of egg-laying hens. Republicans swept the 2024 election, placing Trump back in the White House and ejecting Democrats from any control of Congress.

Now, Republicans are hoping the conflict resolves soon and the strait opens up before too much damage is done.

“Our message is, we still don’t believe that this is going to be a long-term impact, but the president indicated to begin with, [it would] be four to six weeks,” Sen. Mike Rounds, R-S.D., told CNBC.

— CNBC’s Emily Wilkins contributed to this report.