Rising energy costs accounted for more than 60% of May’s increase in consumer prices, according to new data released June 10 from the U.S. Bureau of Labor Statistics. Consumer prices rose 0.5% during the month and were 4.2% higher than a year ago.
Gasoline prices increased 7% in May alone and were 40.5% higher than a year ago. Energy prices rose 23.5% over the past year. The Bureau of Labor Statistics said higher energy costs accounted for more than 60% of May’s increase in consumer prices.
Higher fuel costs can ripple throughout the agricultural economy. Farmers rely on fuel to power equipment, transport crops and livestock, and move inputs such as fertilizer and seed. Rising energy costs can also increase expenses across the food supply chain.
Food prices also continued to rise in May, though much more slowly than energy prices. Overall food prices were 3.1% higher than a year ago, according to the data. Grocery prices increased 2.7%, while restaurant prices rose 3.5%.
While food prices remain a concern for consumers, energy prices rose much faster over the past year and played a larger role in pushing inflation higher, according to BLS.
The rise in energy costs comes as farmers face broader concerns about transportation and input expenses linked to the Iran war. Last month, Investigate Midwest reported that disruptions in shipping through the Strait of Hormuz, a critical global trade route, raised concerns about fertilizer supplies and costs. About one-third of global fertilizer shipments normally pass through the strait.
