Rising Energy Costs Threaten Family Farms, Consumers with High Food Prices, New CEA Report Finds

• Families paid 22% more for food at end of 2024 than they did at beginning of 2021
• $2 rises in diesel, natural gas prices would cost average-sized family farms $14,000-$31,000/year more

HOUSTON--(BUSINESS WIRE)--Consumer Energy Alliance (CEA), the leading energy and environmental advocate for families and businesses, today released its annual “Farm-to-Table” analysis, which unpacks how higher energy costs lead to more expensive grocery bills and risk the viability of family-owned American farms.

The report looks at energy’s overlooked but essential role in every stage of agricultural production, including paying for fuel, fertilizer, and electricity. Since 97% of American farms are family-owned, even minor energy cost increases can leave a lasting impact, adding burdens to farms and raising the prices consumers pay at the grocery store. Families paid 22% more for food at the end of 2024 than they did at the beginning of 2021.

“Energy is in every bite of every meal Americans eat, and it’s easy to overlook how much energy prices contribute to food prices,” Consumer Energy Alliance President David Holt said. “There’s a reason economists exclude food and fuel from core inflation data – because the prices are closely connected. When energy prices rise, farms feel the pressure quickly. By the time the harvest is done and agricultural products reach supermarkets and farm stands, consumers feel it.”

CEA’s report finds that if diesel prices were to increase by $2 per gallon and natural gas by $2 per MMBtu (about as much energy as 8 gallons of gasoline), the average-sized family farm would pay $14,000 - $31,000 more a year in energy costs. The impact would hit smaller family farms the hardest, as USDA research shows that 52%-79% of these farms operate in the “high risk” zone with profit margins below 10%. For every dollar of sales made, the company has 10 cents left as profit after accounting for all of operating expenses.

“The stakes are high for our country’s rural communities and America’s food security,” Holt said. “Sound policies that deliver affordable, reliable energy lead to lower food costs. Ignore those who say we need less agricultural production or less energy – abundance and affordability go hand-in-hand at the dinner table and the gas pump.”

Click here to read the report.

About Consumer Energy Alliance

Consumer Energy Alliance (CEA) is the trusted voice advocating for affordable, reliable, and cleaner energy solutions that benefit all Americans. Representing families, farmers, small businesses, distributors, producers, and manufacturers, CEA champions sensible, balanced policies that support economic growth and environmental resiliency; and ensures families and businesses are a vocal part of the nation’s energy dialogue. Every day, we work to inspire practical, responsible solutions that meet America’s energy needs while protecting the environment for generations to come.