When will the Iran war hit food prices?

Summary

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Podcast Summary:

The Indicator from Planet Money – "When Will the Iran War Hit Food Prices?"
Date: May 6, 2026
Hosts: Adrian Ma & Darren Woods
Guest: David Ortega, Food Economist, Michigan State University
Duration: ~9 minutes of content

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Episode Overview

This episode explores the ripple effects of the ongoing Iran war—particularly its indirect impact on U.S. grocery prices. The hosts unpack why, despite soaring gas prices, groceries haven’t risen in tandem, and when (and by how much) consumers might start feeling the pain at the supermarket. Food economist David Ortega joins to unravel the connections between conflict, diesel and fertilizer markets, and the food system, and to forecast which food items are most vulnerable.

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Key Discussion Points and Insights

1. Current State: Gas vs. Grocery Prices

• [00:29] Gas prices have “soared in the past couple of months,” while grocery prices have remained “relatively flat,” with a slight decrease in March.
• Insight: “In fact, according to the latest Consumer Price Index report, the cost of groceries actually went down a little in March.” – Adrian Ma, [00:33]

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2. Warning Signs: War's Effect May Be Coming

• [00:50] The hosts warn that effects on gas prices may hit groceries next, and it's unclear whether the impact will be large or small.

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3. Expert Perspective: Fuel & Fertilizer as Core Risks

• Introduction of Guest:

  • [02:29] David Ortega, food economist at Michigan State, specializes in tracking the journey of food “from farm to table” and all factors influencing that journey.
  • Memorable: “A trip to the grocery store for me is never quick. I’m always talking to people... call the produce manager, ask him what’s happening, where costs are building up.” – David Ortega, [02:52]

• Major Economic Vectors:

  • Diesel Prices:
    • “Food literally moves on diesel.” – David Ortega, [03:41]
    • Diesel operates farm equipment and trucks transporting food. Since the war began, diesel prices rose ~50% in the U.S.
  • Fertilizer Disruption:
    • Many Gulf states produce nitrogen fertilizer and LNG, both essential for crop production.
    • “When fertilizer prices go up… that can lead to lower fertilizer application rates, which could turn potentially into lower yields come harvest time, and then that would mean less food being produced, which would put upward pressure on prices.” – David Ortega, [04:21]

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4. Timing & Scale of Price Increases

• When Will It Hit?
  • Input cost increases typically appear in store prices after a 6+ month lag (first signs could appear late 2026 or in 2027).
    • “There’s usually a lag of at least six months for increased input costs to actually show up on store shelves.” – Adrian Ma, [04:37]
• How Much Could Prices Rise?
  • “About 10 cents of every dollar you spend at the grocery store can be tied to energy, transportation, and fertilizer.” – David Ortega, [05:01]
  • Estimated increase: 2 to 5 percentage points—contingent on war’s duration.

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5. Severity & Lasting Effects

• Compounding Factors:
  • Even a few percentage points matter as these increases stack on existing pressures: bad weather, labor, tariffs.
  • “Once they increase, [food prices] very rarely come down. And when they do, it’s very short lived.” – David Ortega, [05:34]
• Equity Warning:
  • Grocery prices are already up 30% since 2020.
  • For low-income households: “A few dollars could mean the difference between like putting the chicken in the cart or taking it out.” – Adrian Ma, [06:10]
  • “Families and households are really having to make adjustments in order to be able to keep food on the table.” – David Ortega, [06:03]

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6. Which Foods Will Get Expensive First?

• Perishables in the Hot Seat:
  • “[The rise will hit] around the perimeter of the store... produce aisle, fresh fruits and vegetables, items that have to be transported fairly quickly. These are perishable items and they often have to travel long distances to get to the grocery store.” – David Ortega, [06:31]
  • Dairy (needs refrigerated transport)
  • Meat & Seafood (some seafood is air freighted, and “the price of jet fuel has really skyrocketed.” – David Ortega, [07:08])
  • “If higher prices are coming, we’ll see them there first.” – Adrian Ma, [07:19]

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7. Global Perspective

• Developing Countries at Greater Risk:
  • Many African and Asian countries depend heavily on shipments through the Strait of Hormuz.
  • The U.N. warns of a potential global food crisis if flows remain disrupted.
  • Key insight: Global food insecurity is more about access and affordability than production.
  • “It’s because of issues of access and affordability... food not being where it needs to be and at prices that individuals can afford.” – David Ortega, [07:58]

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Notable Quotes & Memorable Moments

• David Ortega [02:52]:
  “A trip to the grocery store for me is never quick. I’m always talking to people...”
• [03:41]:
  “Food literally moves on diesel here in this country, all the way from the farm…”
• [04:21]:
  “When fertilizer prices go up… that can lead to lower fertilizer application rates, which could turn potentially into lower yields… and then that would mean less food being produced, which would put upward pressure on prices.”
• [05:34]:
  “The reason why shocks like this are so concerning is because of the nature of prices and in particular, food prices. Once they increase, they very rarely come down.”
• [06:10]:
  “A few dollars could mean the difference between like putting the chicken in the cart or taking it out.”
• [06:31]:
  “I think where we’re going to see this show up first is sort of around the perimeter of the store… produce aisle, fresh fruits and vegetables...”
• [07:58]:
  “Issues of food insecurity in the US and I think globally don’t arise because we don’t produce enough food… it’s because of issues of access and affordability...”

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Timestamps for Key Segments

• [00:29] – Current snapshot of gas vs grocery prices
• [02:29] – Introduction of economist David Ortega
• [03:41] – How diesel and fertilizer impact food prices
• [04:37] – Timeline for food price increases (6+ month lag)
• [05:01] – Possible grocery price increase estimate (2–5%)
• [05:34] – Why food price increases are ‘sticky’
• [06:10] – Impact on lower-income households
• [06:31] – Which food items will get more expensive first
• [07:31] – Potential for a global food crisis; access vs. production

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Tone and Final Thoughts

The conversation is brisk, practical, and laced with relatable moments—a hallmark of Planet Money’s down-to-earth, insightful style. Rather than alarmism, the hosts and expert demystify complex supply chain connections, offering listeners a grounded, actionable sense of what may come in the evolving landscape of food economics.

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For listeners and non-listeners alike:
This episode delivers clear, actionable wisdom for consumers keeping an eye on supermarket prices, and it underscores the interconnectedness of geopolitics, fuel, fertilizer, and the everyday act of putting food on the table.

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Transcript

[A]

Npr. This is the indicator from Planet Money. I'm Adrian Ma.

[B]

And I'm Darren Woods. Gasoline and groceries of all the things Americans spend money on, gas and groceries are among the most volatile, price wise.

[A]

Yeah, more so than other goods. The price of gas in groceries tends to fluctuate a lot.

[B]

We all know by now that gas prices have soared in the past couple of months.

[A]

But here's something interesting. In that same period, the price of groceries has been relatively flat. And in fact, according to the latest Consumer Price Index report, the cost of groceries actually went down a little in March.

[B]

Good news, I suppose, or what passes for good news these days.

[A]

Yeah, though there's some bad news on the horizon. And that is it may just be a matter of time before the war's effect on gas prices also hits the grocery store. And the question is, will that effect be a big one or a little one?

[B]

Today on the show, a food economist takes a crack at forecasting just how much our grocery bills could increase in the coming months and which items in our carts will take the biggest hit.

[C]

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[B]

to help us understand how the Iran war could translate into higher grocery prices, we called up David Ortega. He's a food economist at Michigan State

[D]

University where I study the food system, how food goes all the way from farm to, to our table and all the factors that can impact that journey along the way.

[A]

It must be impossible for you to like walk through a grocery store like a normal person.

[D]

Oh yeah, you can ask my wife. I mean a trip to the grocery store for me is never quick. I'm always talking to people. I'll you know, call the produce manager, ask him what's happening, where costs are sort of building up. And so it's. It's really fascinating.

[B]

Never stop economizing. And David has been looking at the economics of the US Israeli war in Iran and how it will impact the cost of groceries, and he says it will in a couple of ways.

[D]

So the first is the price of fuel. So things like gas and much more important, diesel prices.

[A]

As we talked about before on the indicator, diesel prices are shooting up all over the world, from New Zealand to Zimbabwe and in the US since the start of the war, the price of a gallon of diesel fuel has risen up about 50%.

[D]

And food literally moves on diesel here in this country, all the way from the farm. You need diesel to operate a lot of the farm equipment, machineries, but also through transportation, a lot of the products, you have to put them often on trucks to move them across the country.

[B]

So the spike in diesel prices is one factor raising the cost of food production. Another factor is the disruption to the global fertilizer markets. A lot of Gulf states are major producers of nitrogen fertiliser and liquid natural gas, which is a key component in fertiliser production. With much of those shipments unable to get through the Strait of Hormuz, fertilizer prices have jumped.

[D]

When fertilizer prices go up, you know, that can lead to lower fertilizer application rates, which could turn potentially into lower yields come harvest time, and then that would mean less food being produced, which would put upward pressure on prices.

[A]

So if fuel and fertilizer are more expensive, the next question is, when will this translate into higher food prices and by how much? As for the when David says there's usually a lag of at least six months for increased input costs to actually show up on store shelves. So if higher prices are on their way, we could see them late this year or even next year.

[B]

As for the amount of the price increase, David recently ran some rough calculations. He says about 10 cents of every dollar you spe spend on at the grocery store can be tied to energy, transportation, and fertiliser. And depending on how long the war goes on, increased costs could lead grocery prices increasing anywhere from 2 to 5 percentage points.

[A]

And while 2 to 5 percentage points might not sound like a lot to some folks, that's actually on top of other factors contributing to higher food prices, like bad weather, rising labor costs, and tariffs.

[D]

And, you know, the reason why shocks like this are so concerning is because of the nature of prices and in particular, food prices. Once they increase, they very rarely come down. And when they do, it's very short lived.

[B]

And David points out that grocery prices have already gone up about 30% since 2020. Not to mention, David says, for lower income households, even a modest increase can be a hardship.

[D]

The families and the households are really having to make adjustments in order to be able to keep food on the table.

[A]

A few dollars could mean the difference between like putting the chicken in the cart or taking it out.

[D]

Exactly.

[A]

Okay, so we have some idea now of when and how much grocery prices could go up, but we haven't talked about what, what food items would be hit first as the war stretches on.

[B]

So to answer that, let's imagine a grocery store.

[D]

I think where we're going to see this show up first is sort of around the perimeter of the store. So think like the produce aisle, fresh fruits and vegetables, items that have to be transported fairly quickly. These are perishable items and they often have to travel long distances to get

[A]

to the grocery store, keep on walking. And it's a similar story in the

[D]

dairy aisle, dairy in particular. It's a perishable place product. And so it's that refrigerated trucking transportation that really uses up a lot of energy and fuel.

[B]

And rounding the corner, there's the meat and seafood counter.

[D]

If you're getting fresh seafood, some of that actually gets transported via air freight on airplanes. And the price of jet fuel has really skyrocketed.

[B]

Right. So you get the picture. The perishable foods that have to move quickly and over long distances, things like produce, dairy and meats. David says if higher prices are coming, we'll see them there first.

[A]

Now, so far we focused on the potential impact of grocery prices in the US but it's worth zooming out to consider how the war could have an even bigger impact on other countries. Across Africa and Asia, many countries are a lot more dependent than we are on shipments of fuel, fertilizer, and food going through the Strait of Hormuz. And economists at the United nations are even raising fears about a global food crisis if those shipments can't flow freely again.

[D]

One other thing that I think it's really important to keep in mind is that, you know, issues of food insecurity in the US And I think globally don't arise because we don't produce enough food. We produce more than enough food in the US to not only feed ourselves, but feed other parts of the world. And, you know, we have just a lot of production globally. But it's because of issues of access and affordability so the food not being where it needs to be and at prices that individuals can afford.

[B]

And David says the longer the war drags on, the greater its potential impact on our global food system.

[A]

This episode was produced by Angel Carreras and engineered by Jimmy Keeley. It was fact checked by Sierra Juarez. Julia Ricci edited this episode. Kicking Canon edits the show and the indicators of production of npr.

[E]

This message comes from NPR sponsor Charles Schwab with its original podcast on Investing. Each week you'll get thoughtful, in depth analysis of both the stock and the bond markets. Listen today and [e-mail] on investing or wherever you get your podcasts. Support for NPR and the following message come from HomeServe. It never happens at a good time. The pipe bursts at midnight. The heater quits on the coldest night. Good thing. HomeServe's hotline is available 24 7. Call to schedule a repair and a local pro will be on their way. Trusted by millions. For plans starting at $4.99 a month, go to homeserve.com not available everywhere. Most plans range between $4.99 to $11.99 a month. Your first year terms apply on covered repairs.