President-elect Donald Trump strictly criticize the rise the price during the food drive, he gave an address outside his New Jersey home in August at a table covered in cereal boxes, coffee grounds and ketchup.
A wave of consumer discontent appears to have helped propel him back to the Oval Office, but Trump now has a task to ease voter frustration.
Food inflation rose to a peak of over 10% in 2022, but price increases have slowed to around 2%. US Bureau of Labor Statistics the data shows.
However, years of rapid inflation have pushed food prices up more than 25% since President Joe Biden took office.
Typically, prices don’t fall unless the economy slows or heads into recession, which would reduce consumer demand but also set up economic hardship, some economists told ABC News.
However, Trump could introduce policies that could slow the rise in food prices, or even reduce the cost of some household products, economists added.
“The prices of different items can drop dramatically,” Michael Faulkender, a professor of finance at the University of Maryland’s Robert H. Smith School of Business, told ABC News.
In response to ABC News’ request for comment, the Trump transition team said in a statement that Trump intends to follow through on his campaign promises. But the transition team did not specifically address the issue of food prices.
“The American people re-elected President Trump by a landslide with a mandate to deliver on his campaign promises. He will deliver.” Karoline Leavitt, a spokeswoman for the transition team, told ABC News.
Increase oil production
On the campaign trail, Trump often responded to concerns about pricing with a three-word mantra: “Dig, baby, dig.”
Trump, who has downplayed human-caused climate change, vowed to strengthen the oil and gas industry by easing regulations and increasing production.
In theory, increased oil production could lower food prices because gas is a major source of costs throughout the supply chain, whether a company is growing crops or transporting them to a retailer, economists said.
“Energy is a high input cost for food,” University of Miami economist David Andolfatto told ABC News. “This should cause downward pressure on food prices.”
While this move may be beneficial, increased oil production under President Joe Biden has coincided with rising inflation in recent years. Because oil is sold on the global market, rising domestic production may not lower prices for U.S. consumers as much as some had hoped.
The US set a record for crude oil production in 2023, averaging 12.9 million barrels per day. US Energy Information Administrationa federal agency.
Further increases in oil production risk accelerating the nation’s carbon emissions and worsening the effects of climate change, which would come with costs down the road, New York University economics professor Luis Cabral told ABC News.
“We can’t just look at the benefits,” Cabral said, acknowledging the potential for lower food prices. “There are also significant costs in terms of emissions and climate change.”
Strengthen anti-competitive enforcement
To combat high food prices, the Trump administration could tackle market concentration, a term economists use to describe the dominance of a given industry by a few companies, some experts said.
They pointed to the market power of large corporations as the cause of rapid price increases, saying that companies use their large market share to raise prices without fear of a competitor offering a comparable product at a cheaper price.
BEDMINSTER, NEW JERSEY – AUGUST 15: Former US President Donald Trump holds a press conference outside the Trump National Golf Club in Bedminster on August 15, 2024 in Bedminster, New Jersey. Trump’s campaign leaders announced they were expanding their staff as the re-election campaign entered its final months. (Photo by Adam Gray/Getty Images)
Adam Gray/Getty Images
“Whenever there are fewer players in an industry, prices tend to be higher,” Cabral said. “Supermarkets are no exception.”
Grocery store profit margins rose in 2021 and rose further two years later, even as price increases began to cool. Federal Trade Commission the examination in March showed.
In February, the Federal Trade Commission sued to block the merger of supermarket chains Kroger and Albertsons, which would be the largest supermarket merger in US history. The proceedings are ongoing, and will likely extend into the Trump administration.
Some economists question the potential benefits of antitrust, saying the recent wave of inflation coincided with rising production costs during the pandemic. “It’s hard to argue, so it’s kind of a win,” Faulkender said.
Prohibition of price increases
During the campaign, Vice President Kamala Harris propose federal ban on raising food and grocery prices.
The plan could resemble price gouging bans in 37 states, which prohibit sudden price increases for scarce goods, the Harris campaign said. These bans prohibit companies from exploiting a sudden imbalance between supply and demand by raising prices significantly.
While Trump may be reluctant to adopt a policy proposed by his advocates, he could advance a ban on price gouging as a way to prevent a sharp rise in the prices of specific goods.
For example, egg prices have increased by 30% in the year ending in October. US Bureau of Statistics Wednesday’s data showed. The spike is mainly due to an outbreak of bird flu which has reduced supplies. Last year, egg prices rose more than 60% in response to a similar outbreak of bird flu.
Economists who spoke to ABC News differed on the potential ban’s effectiveness in reducing prices.
Some economists dismissed the policy as a flawed solution, as state-level bans are typically only triggered in emergencies and often lack clarity about the type of company behavior that drives up prices.
“I don’t think a federal ban on price gouging would help at all,” Cabral said.
Andolfatto, of the University of Miami, said a price-gouging ban could lower food prices if it prevents rapid price increases in some situations. However, these benefits outweigh the downsides, as such a ban can override the market signal provided by prices, helping to direct the distribution of goods to areas of scarcity.
“These types of interventions have unintended consequences,” Andolfatto said.
