Why tomato prices are rising and driving grocery inflation
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Tomatoes are suddenly one of the biggest drivers of grocery inflation — even as other food prices cool.
Why it matters: The spike shows how tariffs, war-driven energy costs and real-time supply shortages can collide — pushing up prices for a single staple even as overall grocery inflation stays muted.
- Food inflation is shifting: Prices for staples like meat and bacon have cooled after recent spikes, while inflation pressures grow more uneven.
Driving the news: Tomato prices jumped 15.3% in March and are up 22.6% year over year, according to the latest Consumer Price Index released Friday.
- Federal data shows prices rising sharply at the store level — with field-grown tomatoes climbing to about $2.26 per pound in March, up from $1.90 in February, and the highest since December 2022.
The big picture: A nearly 50% spike in vegetable prices showed up last month — but mostly stayed at the wholesale level.
- Tomatoes now signal those pressures are reaching consumers — and may prove more persistent.
Zoom in: Factors driving the rise include:
- Tariffs: A roughly 17% duty on Mexican tomatoes — which supply about two-thirds of U.S. consumption — is raising costs across the supply chain.
- Fuel: Diesel prices, critical for transporting produce, have surged — topping $7.50 a gallon in some states.
- Fertilizer: Higher energy prices are pushing up input costs for growers.
What they're saying: "You have a few converging forces, specifically affecting tomatoes," Skyler Weinand, chief investment officer at Regan Capital, tells Axios, adding that tariffs, diesel, fertilizer and seasonal demand are all "showing up in a wild price increase for consumers."
- Weinand said it's peak export season out of Mexico's Sinaloa region, boosting demand.
- The U.S. imports a large share of its tomatoes, and tariffs are being "passed through fairly cleanly," said Ricky Volpe, professor of agribusiness at Cal Poly, noting there are few players in the supply chain with the capacity to absorb losses.
- Volpe told Axios that while prices typically rise this time of year, the current spike is larger than usual — and he doesn't expect prices to come down meaningfully anytime soon without a strong California harvest.
What we're watching: Relief likely hinges on cheaper fuel and stronger U.S. harvests.
- The worst of the inflation surge may still lie ahead as higher energy costs ripple through the economy and push up food prices.
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