Bananas, long considered one of the most price-stable grocery items in the United States, are no longer immune to inflationary pressures. According to the latest Consumer Price Index (CPI) data, banana prices rose 0.4% in September, capping a 5.4% increase since April. The rise follows the implementation of global tariffs by the U.S. government that directly impact major banana-exporting countries in Central America.
Bananas are almost entirely imported, with no large-scale U.S. production, leaving the market fully exposed to trade measures. Brandon Parsons, an economist at Pepperdine Graziadio Business School, said that bananas have "long been regarded as 'inflation-proof,' with prices remaining stable for decades." However, he noted that recent tariffs appear to have altered this trend.
A White House executive order issued on September 8 offered tariff relief for certain agricultural products not grown domestically, but only for nations with new reciprocal trade agreements. Guatemala, Ecuador, Honduras, and Costa Rica, the main suppliers of bananas to the U.S., were not included, meaning tariffs of up to 15% remain in place.
"The facts are that tariffs are in effect," said Tom Stenzel, executive director of the Banana Importers Association. "While they certainly add cost to the supply chain, how they affect retail pricing likely varies," he added.
The CPI report showed that broader inflation reached 3% year-on-year in September, with overall grocery, clothing, and household costs rising. Bananas stood out due to their historically consistent pricing. Parsons said, "Given that U.S. inflation has cumulatively been around 50% over the last 15 years, the price of bananas should be around $1 a pound today," though it has only recently moved from 67 cents.
Bananas have remained inexpensive due to efficient year-round production in tropical climates and a short shelf life that forces rapid market turnover. Most U.S. bananas are sourced from Central America, where low production costs and stable growing conditions enable a continuous supply.
"Bananas can't be stockpiled, and U.S. growers can't turn up production to replace imports, so we absolutely should expect a 10% tax on banana imports to drive banana prices higher," said Erica York, vice president at the Tax Foundation.
Bananas' long-term price stability became symbolic for many U.S. consumers. Grocery chains such as Trader Joe's held their 19-cent-per-banana price for over two decades before increasing it to 23 cents in early 2024. The increase, described by some shoppers as "the end of an era," reflected the growing challenges of absorbing global cost pressures within the fresh produce supply chain.
Source: CNBC
