Food shock expected in US election as Iran war drags on

Higher food prices in the United States as a result of the Iran war could be the most politically damaging outcome of the conflict, months before a crucial US election.

Two years ago, President Donald Trump won re-election by defeating high prices for eggs, bacon and other grocery store staples. Now, he and the Republican Party could face even more food price increases as they seek to maintain control of Congress in this year’s midterm elections.

Democrats are trying to capitalize on the surge by focusing on President Trump’s decision to go to war, but Republicans are choosing their words to downplay economic predictions of higher prices for the fuel and fertilizers needed to produce and ship the food their constituents eat.

“Our message is affordability and accountability,” Rep. Jared Huffman (D-Calif.), ranking member of the House Natural Resources Committee, said in an interview. “This is a very tailored message, very narrowly focused, and on both of these pillars, Trump makes our case even more convincing.”

“There are many ways this president is driving up the cost of food and energy and fueling an affordability crisis,” Huffman said. “On all of these fronts, we’re going to have a chance to rein in the madness. I really think it’s going to look very convincing for Democrats in this election.”

The war and the subsequent blockade of the Strait of Hormuz by Iran shook the world economy. oil Then gas prices soared, fertilizer costs soared, and the market plummeted.

The next shock could be at the grocery store, causing major headaches for millions of Americans who have endured soaring food prices for years. All of this is happening as election season begins with primaries and campaign messages. This year’s election is seen as a referendum on Trump, who took office on the promise of cutting food costs.

“They’re just going to get angrier,” Rep. Vicente Gonzalez, a South Texas Democrat, said in an interview with CNBC when asked how his constituents would react if food prices went up. “When people hear that, they’re like, ‘Hey, I can’t even pay for groceries, so you want to go pay for a war in the Middle East?'” I think it’s a tough sell. ”

Gonzalez, who already represents a floating seat, saw his district turn significantly red this election cycle after President Trump ordered Texas to redraw its congressional district maps to favor Republicans. Expected price increases at grocery stores only confirm the story of affordability over middle competition.

Food is facing many new inflationary pressures due to the Iran war and the closure of the Strait of Hormuz. Rising oil prices are increasing the cost of diesel, which is needed by farmers and the trucks and trains that transport food across the country. Fertilizer supplies are also being held up due to the closure of the strait. Plastic, a petrochemical often used in food packaging, can also contribute to higher checkout costs.

Economists warn that these factors are likely to lead to higher costs for consumers.

“Food prices are going to fluctuate quite a bit,” said Ketil Storereten, an economist and professor at the University of Minnesota and director of the university’s Heller Hurwitz Institute for Economic Research. “Taken together, they make up a large portion of food production prices, and the large increase in prices suggests that all increases in fertilizer prices will be passed on to food.”

The impending rise in food prices is unlikely to happen immediately, but could happen by November, when voters go to the polls. Farmers in the Northern Hemisphere are currently preparing to plant crops, so registration will take longer if there is a spike associated with this year’s harvest.

“Currently, the amount of grain on the market is not affected by gas prices or fertilizer prices,” Storersletten said. “But it’s going to be important for new corn and new grains that will be planted.”

“It would be really helpful if we could open the Strait of Hormuz now, but imagine if it remained closed until the summer. Food prices would rise significantly,” Storersretzen said. Storesleten said the crop is typically harvested in late summer or early fall, and prices are expected to rise gradually during that time.

Other food items, such as fresh produce, have more complex supply chains and require refrigeration throughout, which can hit the double whammy of increased costs. Unlike grains, fresh produce requires energy to refrigerate, both to store and transport, and energy prices are currently rising.

“Produce cannot be stockpiled because it has to be transported and refrigerated,” said Max Teplitzky, chief scientific officer of the International Fresh Produce Association, an industry group whose members include grocers and other retailers, as well as fruit and vegetable producers. “Just shelving and storing them has significant energy costs, and when those energy prices go up, the prices for consumers can go up too.”

Teplitzky said the longer the strait remains closed, the more economic damage could be caused, including higher prices for plastics. Many foods are packaged in plastic containers.

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

Republicans in Congress acknowledge that the war and the closure of the Strait could cause food prices to rise.

“I think any confusion around transporting raw materials, transporting inputs, any kind of restrictions could definitely impact consumers,” Rep. GT Thompson (R-Pa.), chairman of the House Agriculture Committee, said in an interview. “That’s obvious.”

In his address to the nation on Wednesday night, President Trump gave no indication that the United States would move towards an early reopening of the strait.

“Countries around the world that receive oil through the Strait of Hormuz must be sensitive to its passage,” he said. “They can easily do that. We will work together, but we should also take the initiative to protect the oil they so desperately depend on.”

But Republicans and the White House have limited options to curb soaring food prices. Most point to opening the Strait of Hormuz or ending the war early to limit the damage.

Food has become a more troubling part of the inflation story that has plagued U.S. consumers since 2022. Food inflation remained at 3.1% in February, down from the peak of 11.2% in September 2022, but still higher than the overall inflation rate (2.4%).

That’s because food prices are typically more volatile than other consumer-purchased products and rely on many external factors to keep costs low. Storms, droughts, and other natural disasters can affect harvests and reduce supply. Herd size, such as shrinking U.S. beef cattle herds, can also impact grocery store prices. Beef prices have soared in recent years.

This is a similar predicament that former President Joe Biden found himself in during his 2024 campaign, when an outbreak of bird flu disrupted the supply of laying hens and caused egg prices to soar. Republicans won a landslide victory in the 2024 election, returning Trump to the White House and eliminating Democrats from control of Congress.

Republicans now hope the conflict will be resolved quickly and the strait opened before major damage is done.

“Our message is that we still don’t believe this will have a long-term impact, but the president has indicated initially that it’s going to take four to six weeks,” Sen. Mike Rounds, R-S.D., told CNBC.

— CNBC’s Emily Wilkins contributed to this report.