Food Prices, the Evidence, and the Value of American Scale

Lowering the cost of groceries and securing the nation's food supply are goals worth pursuing, and they are widely shared. In December 2025, the federal government made them a formal enforcement priority. Executive Order 14364 directed the Department of Justice and the Federal Trade Commission to establish Food Supply Chain Security Task Forces and investigate whether anticompetitive conduct, particularly by foreign-controlled companies, is raising the cost of food.

The most useful contribution to that effort is to ground it in evidence. The public record on what has actually moved food prices in recent years is detailed and well documented, and it points clearly toward supply shocks and input costs. That same record shows that the scale and efficiency of the American food system are sources of affordability. Getting the diagnosis right is the surest way to deliver the lower prices everyone wants.

What the Evidence Shows About Food Prices

The data on grocery prices is more reassuring than the headlines often suggest. According to the U.S. Department of Agriculture's Economic Research Service, average food-at-home prices were 2.3% higher in 2025 than in 2024, below the 20-year historical average of 2.6% per year. Grocery inflation, in other words, ran slower in 2025 than its long-run norm.

The increases that did occur were concentrated in a small number of categories with clear, identifiable causes. Egg prices rose 21.9% in 2025, driven by an outbreak of highly pathogenic avian influenza that forced the culling of tens of millions of egg-laying hens. As flocks recovered, retail egg prices fell steadily from April through December, and the USDA projected a decline of roughly 27% in 2026. Beef and veal prices rose 11.6%, the result of a U.S. cattle herd that has been shrinking since 2019, compounded by drought and strong consumer demand. These are the dynamics of disease, weather, and herd cycles, not of market structure.

Across the broader grocery basket, the dominant cost pressures are inputs. Feed, fertilizer, energy, transportation, and labor drive the price of food at every stage of the supply chain. One agricultural economist estimates that labor alone accounts for roughly half the cost of the food in a typical grocery cart. The Russia-Ukraine war raised global costs for fertilizer and energy, and the lingering effects of pandemic-era supply disruptions worked their way through the system for years.

What is driving food prices in the United States?

The primary drivers of recent U.S. food price increases are supply shocks and input costs, according to U.S. Department of Agriculture data. Avian influenza reduced egg-laying flocks and raised egg prices; a multi-year contraction in the cattle herd, worsened by drought, raised beef prices; and rising costs for feed, fertilizer, energy, transportation, and labor pushed prices up across categories. Overall grocery inflation in 2025 ran below its 20-year historical average.

Scale Is a Source of Affordability

The structure of American food retail tells its own story about prices. Grocery is among the lowest-margin businesses in the entire economy. The average net profit margin for U.S. food retailers was about 1.7% in 2024, within an industry range that typically runs between 1% and 3% of revenue. For every dollar a shopper spends, the grocer keeps a penny or two after costs.

A business that thin survives on volume and efficiency rather than pricing power. Large grocers and integrated distributors move enormous quantities of goods at low cost per unit, invest in the logistics and cold-chain infrastructure that reduce waste, and pass the savings of that efficiency through to shoppers in the form of lower prices. The economics reward scale precisely because scale is what makes low margins sustainable.

The outcome is visible in household budgets. Americans spent about 5.0% of their disposable income on food at home in 2024, among the lowest shares of any country in the world and a figure made possible by the productivity of the American food system. Scale and integration are central to how that affordability is achieved.

Enforce Against Conduct, Not Against Size

None of this argues against vigorous enforcement of the antitrust laws. Genuine price-fixing and collusion are illegal, they harm consumers and honest competitors alike, and they deserve to be prosecuted wherever the evidence establishes them. An effective competition policy targets proven conduct.

The distinction that matters is between conduct and structure. Meatpacking, for example, is among the most concentrated links in the food supply chain, and it has drawn sustained, bipartisan antitrust attention for that reason. Examining specific conduct in such markets is legitimate. The risk lies in treating scale itself as evidence of wrongdoing, or in assuming that the size of a company explains a price increase that the underlying data attributes to a shrinking cattle herd or an avian flu outbreak. Policy built on that assumption misallocates enforcement resources and can deter the very investments in capacity and efficiency that hold prices down.

The order's emphasis on foreign control raises a separate set of national and economic security questions that are distinct from the treatment of American scale. The affirmative case here is specific: the large, integrated American companies that grow, process, distribute, and sell the nation's food are a source of its affordability and its security.

The Case Worth Making

The shared objective is a food supply that is both affordable and secure. The evidence points to how that is achieved: by addressing the supply shocks and input costs that actually move prices, by prosecuting genuine misconduct where it exists, and by recognizing that the scale and efficiency of American food enterprise are assets in the effort rather than obstacles to it.

An investigation that follows the evidence will find an American food system that delivers some of the most affordable food in the world on margins thinner than almost any other industry. The most durable path to lower grocery bills runs through the productivity of that system, supported by a policy environment that judges companies on their conduct and their results, not on their size.