In a recent discussion from FMI—The Food Industry Association, experts raised alarms about U.S. tariffs potentially increasing food prices, despite a slight decline in costs recently. Andy Harig from FMI and Dr. Ricky Volpe, a food business professor at Cal Poly, explained how thin profit margins and the nature of food imports make it hard for grocery stores to shield consumers from rising prices.
Dr. Volpe highlighted that about 80% of food in the U.S. is produced here, while the remaining 20% includes items like coffee and seafood that can’t be easily grown domestically. He remarked, “If the U.S. were to significantly increase cucumber production, we’d likely see prices double or triple.”
Harig added that grocery stores operate on very slim profit margins—only 1.7%. This means when costs rise, they have little flexibility to absorb those increases. “Mitigating costs in our supply chain is more challenging than in other sectors,” he noted.
Moreover, the conversation revealed that tariffs on materials like steel and aluminum could severely impact packaging and food processing, creating what Volpe calls a “double whammy” effect on products like seafood, facing tariffs on both the goods and their materials.
Current events also play a role. Volpe mentioned that inflation, bad weather, and disease outbreaks compound the effects of tariffs. According to FMI data, 55% of shoppers worry about tariffs influencing food prices. A Fabrizio Lee & Associates poll also found that food costs are currently the top concern for voters.
To tackle these issues, Harig and Volpe suggest creating exemptions for essential food items without domestic alternatives. They stress that without such measures, the impact of tariffs on both imported goods and essential materials is inevitable and could significantly raise prices in the coming months. Experts predict that if these trends continue, consumers will feel the pinch more than ever.
This highlights an ongoing challenge: balancing trade policies with the need for affordable food. As both consumers and retailers face uncertainty, the conversation around tariffs and food prices remains critical.
