Deportations and Grocery Prices: What the Evidence Actually Shows
Few topics generate more heat and less clarity than the link between immigration enforcement and the cost of food. This post doesn't take a position on immigration policy. Its job is narrower: to lay out how economists think about the connection between farm and food-industry labor and grocery prices, where they disagree, and what the data shows so far. That's the framing clients are likely to need when they ask whether this will show up in their grocery bill.
Why people expect a price effect
Immigrant labor is a large part of the food supply chain, especially at the harvest end. According to USDA estimates, roughly 42% of U.S. farmworkers were undocumented between 2020 and 2022, and the Council on Foreign Relations reports that 68% of farm laborers in fiscal 2021-22 were foreign-born. One analysis of Census and Pew data found that undocumented workers make up about 5% of the overall labor force but at least 16% of workers across the food supply chain, and in some industries the foreign-born share is far higher, with Idaho dairy industry estimates putting it near 90% of on-site dairy workers.
When enforcement reduces that workforce, the concern is straightforward: harvests slow, costs rise, and some of that reaches the checkout line. Estimates of the size of the effect vary widely:
The Peterson Institute for International Economics has estimated that large-scale removal of farm labor could raise food costs by as much as 10%.
FWD.us, an immigration advocacy group, projects producer prices for most food products rising 14.5% under restrictive policies, translating to a typical weekly grocery bill moving from $165 in 2024 to about $195 by the end of the current administration's term.
A preprint on arXiv, not yet peer reviewed, modeled 2025 enforcement actions in California's Oxnard area and projected a 5% to 12% rise in food prices if labor supply fell by 20% to 40%.
The Labor Department itself acknowledged the risk in an October 2025 Federal Register filing, warning that the sharp drop in the inflow of unauthorized workers threatened the stability of domestic food production and prices, and proposing changes to how the H-2A guest-worker program sets wages as a response.
Why others expect a smaller effect
Several points cut the other way, and they deserve equal weight.
Farm labor is a small slice of the retail price. Farmers and ranchers keep about 5.8 cents of every dollar consumers spend on food after covering production expenses, and the farm share of each dollar spent on food at home is about 18.5 cents, according to USDA data. An older back-of-the-envelope calculation from USDA figures, published by the Economic Policy Institute and UC Davis researchers, found that a 40% increase in farm labor costs would raise the retail price of fresh fruits and vegetables by roughly 4%, because farm labor is only about a third of farm revenue and farms receive roughly 30% of the retail price. Most of the labor in the food dollar sits in restaurants, retail, and processing, not on farms.
Imports can fill gaps. Researchers at the American Enterprise Institute note that reduced farm labor may have only modest effects on grocery prices if consumers can buy imported produce. The caveat they add is important: if high tariffs apply to food imports, that relief valve closes and prices rise.
Farms adapt. Studies of strict state-level enforcement, such as E-Verify mandates, found that farms shifted acreage away from labor-intensive crops like vegetables and melons, with no substantive change in farmworker wages. That points to supply adjustments rather than price spikes, at least in the short run, though it also means fewer of those crops are grown domestically.
Wages may rise, with mixed effects. Federal officials have argued that limiting immigration will raise wages and open jobs for U.S.-born workers. Economists disagree on how large the wage effects of immigration are. Harvard's George Borjas finds negative effects on lower-skilled wages, while UC Davis's Giovanni Peri finds minimal effects. Even some immigration-restriction advocates have criticized the H-2A wage change, arguing it reduces farms' incentive to move away from reliance on cheap immigrant labor, a reminder that the debate doesn't divide neatly along one line.
The distinction that matters most
Two very different scenarios get blended together. In one, farms lose workers but can replace them at higher wages. The math above suggests a modest price effect. In the other, workers can't be replaced at all and crops go unharvested. That's closer to what happened in Georgia after its 2011 immigration law, when University of Georgia researchers estimated about $140 million in direct farm losses and as much as $400 million including related businesses. Which scenario plays out depends on the crop, the region, how fast the H-2A program can scale, and how much automation is feasible, which is limited for many fruits, vegetables, and dairy tasks.
What the data shows so far
Aggregate numbers don't show a surge. In August 2026, grocery prices were up 2.2% from a year earlier, according to the Bureau of Labor Statistics, compared with 2.7% in August 2025. All food rose 2.7%, with restaurant prices up 3.4%. USDA forecasts 2026 grocery inflation at 2.5%, just under the 20-year average of 2.6%. Individual items are moving, with beef up 5.9% (USDA notes federally inspected production is about 2% lower) and coffee up 6.1%, while dairy is down 0.3%.
That doesn't mean enforcement has had no effect. It means the effect, if any, is mixed in with cattle cycles, tariffs, weather, and energy costs, including the diesel spike that raises the cost of moving every item to the shelf. National averages can't separate those forces. Research at the crop and region level is better suited to that question, and USDA's own forecast range for 2027 grocery prices is wide, from roughly -5.7% to +10.5%, which reflects genuine uncertainty.
What this means for client conversations
Food makes up about 13.5% of the Consumer Price Index, so even a sharp rise in food prices moves headline inflation by less than people expect. A 5% increase in all food prices would add roughly 0.7 percentage points to CPI, all else equal. The impact is larger for lower-income households and retirees on fixed incomes, for whom food is a bigger share of the budget. For planning, the useful approach is to model a range rather than a point estimate, build in some cushion for food costs, and avoid attributing any single price move to one cause. When clients ask whether enforcement will raise their grocery bill, an accurate answer is that credible estimates range from small to substantial, depending on assumptions that haven't yet been tested at scale, and that the best evidence will come from the data over the next year or two.