Get Ready for Higher Food Prices
NEWS | 22 December 2024
This article was featured in the One Story to Read Today newsletter. Sign up for it here. When Americans went to the polls last week, they wanted cheaper food. Groceries really are more expensive than they used to be, and grocery costs are how many Americans make sense of the state of the economy at large. In September, Pew Research Center reported that three-quarters of Americans were “very concerned” about them. And this month, many of those people voted for Donald Trump, the candidate who touted his distance from the economic policy of the last four years, and who promised repeatedly to lower prices. But two of Trump’s other big promises—mass deportations of undocumented immigrants and more restrictive trade regulations—would almost certainly raise food prices, economists told me. American-grown staples would get more expensive owing to a domestic labor shortage, and imported foods would too, because they would be subject to double-digit import taxes. This cause-and-effect dynamic “could be my final exam,” Rachel Friedberg, who teaches “Principles of Economics” at Brown University, told me. “It’s just very straightforward principles of economics.” The main issue is labor. American farming depends on undocumented workers; if the Trump administration were to enact “the largest deportation operation in American history” and deport every undocumented immigrant living in the United States, somewhere between 40 and 50 percent of the people who plant our crops and pick our fruit would leave the domestic workforce. Proponents of immigration enforcement typically say these jobs could be taken by documented or American-born workers. But the farm industry is already in a prolonged labor crisis, and undocumented immigrants tend to be willing to work for less money—that’s why employers hire them, even though it’s illegal. Fewer workers means higher wages means higher prices, straight up. Read: Trump signals that he’s serious about mass deportation Some farms might be able to get by shorthanded, at least for a little while. Some might embrace technology more quickly, investing in automated systems that could help fill the labor gap. But that would take time, and as David Anderson, a Texas A&M University agricultural economist, told me, “You gotta get the cows milked and fed every day.” America’s agricultural system relies on hands and feet, arms and legs, day in and day out. If the Trump administration does, in fact, deport millions of people, produce prices would likely increase the most, Bradley Rickard, an agricultural economist at Cornell University, told me in an email, because “labor represents a significant share of total costs.” Prices would probably go up quickest and most dramatically for the crops that are most labor-intensive to harvest: strawberries, mushrooms, asparagus, cherries. So would those for the foods farmed in California, which grows three-quarters of the fruit and nuts, and a third of the vegetables, produced domestically, and is home to about half of the country’s undocumented agricultural workers. Mass deportations would also drive up prices for dairy and meat, whose industries have also been in a labor shortage, for at least the past half decade. According to a 2022 analysis from the American Immigration Council, which advocates for immigrants and seeks to shape immigration policy, a scarcity of workers led the median wage in the dairy and meat sectors to increase 33.7 percent from 2019 to 2022, and prices to rise between 4.5 and 7 percent. In 2015, Anderson and some colleagues conducted a survey on behalf of the dairy industry and found that eliminating immigrants from the sector would reduce production, put farms out of business, and cause retail milk prices to increase by about 90 percent. Anderson’s study is 10 years old, and assumed a total loss of all immigrant labor, documented and undocumented. Last week, he told me that he has no reason to believe the dynamic wouldn’t hold to a lesser degree if a smaller amount of the workforce were deported now. “We wouldn’t be able to produce all the stuff that we do today. Less production means less supplies,” he said, “and less supplies means food prices would go up.” Immigration policy affects food that is grown domestically. But about 15 percent of the American food supply is imported, including about 60 percent of fresh fruit, 80 percent of seafood, 90 percent of avocados, and 99 percent of coffee. Our reliance on, or taste for, imported goods has ticked up steadily over the past few decades, as we have become accustomed to Italian olive oil and raspberries in winter. On the campaign trail, Trump proposed taxing these—and all—imported goods, in an attempt to raise domestic production and to reduce the deficit. If his plan goes through, Chinese imports—which include large amounts of the fish, seafood, garlic, spices, tea, and apple juice we consume—would be subject to 60 to 100 percent tariffs. All other imports would be subject to 10 to 20 percent tariffs. Those taxes would be passed onto consumers, especially in the short term, as domestic production ramps up (if it can ramp up), and especially if undocumented immigrants are simultaneously leaving the workforce. “There’s no safety valve,” Marcus Noland, the executive vice president and director of studies at the nonpartisan think tank Peterson Institute for International Economics, told me. “If you start deporting people, it’s not like you can import the product and make up for it if you have these tariffs.” Read: The immigration-wage myth We all need food to live, and all food needs to come from somewhere. The process by which it makes it to our plate is complicated, resource-intensive, and subject to the vagaries of policy, weather, disease, and labor supply. The system does not have a large amount of slack built into it. If sticker-shocked milk fans start gravitating toward other drinks, those prices will also go up. If California’s berry industry is squeezed by a labor shortage, and the market for imported berries is squeezed by tariffs, berries will cost more. And although farms are the biggest employer of undocumented workers, these workers are also a major part of the mechanism that processes, butchers, cooks, and delivers our food, from the sprawling poultry-processing plants of the South to the local fried-chicken place. The restaurant industry—which employs more than 800,000 undocumented immigrants, according to a Center for American Progress analysis—is already struggling to fill jobs, which is driving higher prices; even a small reduction in the workforce would increase operating costs, which will almost definitely result in either restaurants closing or costs being passed onto eaters. The immigration and tariff policies, in other words, would affect all the food we eat: snacks, school lunches, lattes, pet food, fast food, fancy restaurant dinners. People will not stop eating if food gets more expensive; they will just spend more of their money on it. Trump’s team proposed deportations and tariffs as a way to fix America’s inflation-addled economy. But voters are unlikely to be comforted by what they see over the next few years. Toward the end of our call, I asked Friedberg if she could see any scenario under which, if the new administration’s policies are enacted, prices don’t go up. “No,” she said, without pausing. “I am extremely confident that food will get more expensive. Buy those frozen vegetables now.”
Author: Ellen Cushing.
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