The Iran war isn’t hitting your grocery bill — yet |
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The Iran war isn’t hitting your grocery bill — yet
The Strait of Hormuz is reopening. But the war’s impacts on the food economy could linger.
The aorta of the global energy economy has been clogged for more than a month now.
The closure of the Strait of Hormuz — the narrow waterway connecting the Gulf oil producers to global markets — has throttled worldwide energy production and driven up the prices of gasoline, diesel, fertilizer, plastics, and myriad other commodities.
This has led many Americans to fear that their rising energy bills are just the beginning — and that America’s ongoing conflict with Iran could push up grocery prices too.
And yet, that foot still hasn’t dropped. According to March’s Consumer Price Index (CPI), food prices were no higher last month than they had been in February.
What’s more, on Friday, the US and Iran reportedly reached a deal to completely reopen the Strait for the duration of their ceasefire. A permanent peace agreement, however, has yet to be negotiated.
All this raises the questions: Are American grocery shoppers out of the woods? Will we be spared a war-induced spike in food prices? And what would happen if Friday’s news proves to be a false dawn — and peace talks ultimately break down?
To explore these questions, I spoke with Ken Foster this week, an agricultural economist at Purdue University. Our conversation has been edited for concision and clarity.
The war is on hold. But the economy is still in danger.
The war with Iran has yet to........