US food prices up 26% in five years as consumers cut back
Beef demand holds firm while dairy exports hit record pace
9 July 2026
2 minute read
By: According to a new quarterly report from CoBank’s Knowledge Exchange, inflationary pressures and shifting consumer buying patterns are rippling through the US food chain, reshaping strategies for retailers, manufacturers and suppliers. Price increases across most food and beverage categories are tightening household budgets and prompting consumers to make wholesale changes in how they shop. A growing number of Americans are trading down to lower cost food options, reducing discretionary purchases or buying fewer groceries altogether.
“While May’s increase in the food price index was tepid, overall food prices are up 2.7% from May 2025 and roughly 26% higher than five years ago,” said Billy Roberts, food and beverage economist with CoBank. “Cumulatively, food price increases are proving to be the definitive, everyday stressor for consumers and they’re responding decisively by choosing lower cost options like private label brands, shopping at discount retailers or simply buying less.”
The change in consumer behaviour hasn’t gone unnoticed by manufacturers and retailers. Large grocery retail chains are unveiling price rollbacks and value positioning to maintain traffic and protect market share. Meanwhile, food and beverage manufacturers are emphasising affordability through pricing adjustments, promotions and productivity gains aimed at offsetting rising input costs.
According to market research firm Numerator, 4 out of 10 consumers cite rising prices as their top concern for the year ahead. Cost pressures building across everyday goods are straining some demographics more than others, a disparity likely to persist while gas and energy prices remain elevated. Nonetheless, inflationary pressures, including those triggered by the war in Iran, are continuing to impact many sectors of the US economy.
Protein demand holds firm but supply response uneven
Animal protein markets are increasingly out of sync with shifting consumer purchasing. Demand remains resilient, but supply responses vary sharply by species. Consumers are signalling a willingness to pay higher prices for beef despite limited supply, while lower-cost pork and chicken alternatives have not fully absorbed the available production. A cost-per-gram comparison may help explain the tension. If pork, chicken or eggs offer more affordable protein, the key question is why consumers are not shifting more aggressively toward those products. The answer likely reflects more than price alone, including taste, quality perceptions, meal preferences, convenience and food service menu dynamics.
The export market for US dairy products continues to gain momentum with cheese and butter setting the pace. Through April, US cheese exports totalled 523 million pounds, a 25% increase over the first four months of 2025. Butter and anhydrous milk fat exports during the same period totalled 134 million pounds, an 88% increase year-to-date. Cheese and butter have been extremely valuable as export products given the higher levels of butterfat in US milk. Butterfat production has been improving so fast on US dairy farms that some dairy processors have placed caps on butterfat levels for payment in milk checks.
