Berliner Boersenzeitung - US farmers, firms flag higher costs even as Trump touts affordability

Grocery prices rose 2.7 percent from a year ago in September, recent government data showed, while a Politico poll found that groceries were the most challenging category for Americans to afford.

But appeals against Trump's tariffs and households' cost-of-living worries contrast against the administration's messaging -- as officials work to convince Americans of the strength of the world's biggest economy.

"While my great work on the Economy has not yet been fully appreciated, it will be! Things are really Rockin'," Trump wrote on his Truth Social platform over the weekend.

He stressed that prices were "coming sharply down."

The White House has pointed to cheaper Thanksgiving meals offered by retailers this year, although some observers caution this could be due to a different mix of products available.

Even as the country has not seen a broad inflation surge from tariffs, economists, policymakers and business owners note that the levies have added to costs.

North Carolina-based farmer Mary Carroll Dodd told reporters this week that "because of increases in our cost, mostly due to tariffs, we've had to raise the price of some of our vegetables" like collards and kale.

Even before new tariffs, input costs like fertilizer, seed, chemicals, equipment and fuel were already at all-time highs, added Nick Levendofsky, executive director of the Kansas Farmers Union.

"With tariffs, they are going up even more," he added. "Corn and soybeans make up much of the feed for turkeys and other livestock. When those crops cost more to grow, the price per pound of turkey goes up."

Already, wholesale turkey prices are about 40 percent higher due to supply challenges fueled by avian illnesses, the American Farm Bureau Federation said recently.

This signals that price pressures will likely persist, even if retail prices fell this year as stores featured Thanksgiving deals to draw in consumers.

- Business challenges -

The Farm Bureau's recent survey noted that prices of fresh vegetables have jumped, with a "continued shortage of farmworkers" and fast-growing wages adding to costs.

"Almost certainly some of that labor shortage is due to the crackdown on both legal and illegal immigration," said Jeremy Horpedahl of the libertarian Cato Institute.

But proponents of Trump's trade strategy argue that tariffs are not a direct driver of price hikes in key sectors like housing, food or health care.

US beef prices for example have been boosted by a drought in recent years and a shrinking cattle herd, said economist Jeff Ferry at the Coalition for a Prosperous America, a group that supports Trump's tariffs.

"The supply chain, including manufacturers and the importers, are absorbing most of the tariff while holding consumer price increases in check," he said.

But the picture ahead remains complicated.

In a nod to farmers' challenges, the government is considering aid for the sector hit by low crop prices and a trade row with Beijing this year.

Levendofsky, however, said: "Farmers don't want a bailout. They want trade, not aid."

Some small business owners say they struggle to survive, even as the year-end shopping season approaches.

Jared Hendricks, who owns Village Lighting Co in Utah, told reporters that his company is "approaching a million dollars in tariffs this year" that were not originally in his forecast.

His company specializes in holiday decorations and solutions, placing orders a year in advance with much of the sales tied up in agreements with customers.

"We've sold a lot of that good to them directly at a loss," he said. "At this point, we've kind of transitioned from working for profits to working for tariffs."

"We are just in business to pay off our tariff debt," Hendricks said.

(T.Burkhard--BBZ)