Expert: Food Prices Not Yet Rising From Iran War, But Risk Remains
The closure of the Strait of Hormuz has affected energy prices but has not yet translated into higher food prices for American consumers, according to March’s Consumer Price Index. On Friday, the US and Iran reportedly reached a deal to fully reopen the strait for the duration of a ceasefire, though a permanent peace agreement has not been negotiated. Agricultural economist Ken Foster of Purdue University explained that energy shocks take time to work through the food supply chain because pre-priced contracts and intermediaries absorbing costs delay price increases. The March Producer Price Index showed Stage 1 food supply chain prices rose 2.4% from February and 6.2% from a year earlier, but the data was collected just 10 days into the conflict. Foster noted that fertilizer costs are not yet a factor for the 2026 crop in North America, but if the war extends into the 2027 crop year, fertilizer-driven food inflation could compound. He added that packaging made from plastics and foams is energy-intensive and could drive price pressure in the next three to 12 months if the conflict continues. Historically, food prices are slow to rise but even slower to fall, meaning any spike could linger long after the shock ends.
What’s reported
The Strait of Hormuz closure has raised prices of gasoline, diesel, fertilizer, plastics, and other commodities.
March CPI showed food prices were no higher than in February.
The US and Iran reportedly reached a deal to reopen the strait during a ceasefire; a permanent peace agreement has not been negotiated.
Ken Foster, agricultural economist at Purdue University, says energy shocks take time to pass through the food supply chain due to pre-priced contracts and intermediaries absorbing costs.
The March Producer Price Index for Stage 1 of the food supply chain showed a 2.4% increase from February and 6.2% from a year earlier; data was collected on March 10, 10 days into the conflict.
North American farmers purchased fertilizer for the 2026 crop before the war started.
If the war extends into the 2027 crop year, fertilizer costs could compound food inflation.
Packaging (plastics, foams) is energy-intensive and could drive price pressure in 3–12 months if the conflict continues.
Historically, food prices rise slowly and fall even slower; prices may not decline, only stop growing as fast.
Open questions
Whether the reported deal to reopen the Strait of Hormuz will hold and prevent substantial food price increases.
How long the conflict must continue before substantial food inflation occurs.
Whether the 2.4% increase in Stage 1 PPI indicates an impending rise in consumer food prices.
Key figures
Ken Foster, agricultural economist at Purdue University
Sources: vox.com
