The University of Chicago study estimates mandatory ultra-processed food labeling would cost the industry at least $14.2 billion annually, with 72.3% of packaged foods qualifying under the designation and roughly $60 per household passed through to consumers.
UPF Labeling Costs and Industry Impact
The $14.2 billion annual cost breaks down into $9.5 billion for reformulation, $4.5 billion for substitute ingredients, and $200 million for federal administration and relabeling. The study found nearly 450,000 products in the USDA’s branded food database would qualify as ultra-processed, covering 51% of grocery spending. Of that total, $8.1 billion would pass through to consumers, roughly $60 per household. The study excludes an estimated $1 billion in lost domestic agriculture revenue and up to $9.7 billion in higher food import costs.
Public pressure is ahead of policy and hard to dismiss as a fringe movement. A survey conducted by the Annenberg Public Policy Center found that 80% of adults in the US support requiring labels on ultra-processed foods, while 79% and 75% support removing highly processed foods from school lunches and increasing regulation of chemical additives, respectively. Although only 26% of Americans identify as supporters of the MAHA movement, the average support for these specific policy proposals across the general population is 73%.
Related Post: White House Halts MAHA Campaign Over Food Definition Dispute
The lack of a published definition for ultra-processed foods is creating challenges for planning. In August, the FDA submitted a proposed definition to the White House, but it has not been made public. Over 100 nutrition and medical experts urged its release in a letter to the Office of Management and Budget on October 23. As a result, the University of Chicago study used a definition from Healthy Eating Research from May 2026. Without a final definition, manufacturers are unable to allocate reformulation funds, make informed ingredient sourcing decisions, or determine which products meet the criteria.
Food Price Pressures and Supply Challenges
The World Bank forecasts that global food prices will increase by approximately 10% in 2026 and another 7% in 2027, driven by rising energy costs and supply disruptions caused by the ongoing Middle East conflict. Energy prices have risen by nearly one-third this year, and grain shipment disruptions, adverse weather conditions, and high fertilizer costs are adding to the pressure. The World Bank’s forecast assumes no further escalation of the conflict, but if this assumption proves incorrect, there is a risk of a food crisis similar to that seen in the early 2010s.
The largest current outbreak of bird flu in the US is at Rose Acre Farms near Germantown, Illinois, where the USDA confirmed that 934,600 birds were culled on October 19. This facility is the second-largest egg-laying operation in the country. Since the outbreak began in February 2022, over 210 million birds have been slaughtered nationwide. Although retail egg prices have decreased to an average of $2.27 per dozen, down from the peak of over $6 in early 2025, the impact of this outbreak on regional supply and spot pricing is significant. A separate detection of bird flu in a Washington dairy herd in mid-October has put another input category on high alert.
Related Post: Food firms cut plants and jobs amid cost pressures
Kroger’s private label business has grown to a $40 billion operation with 35 manufacturing sites. The company’s premium tier, Private Selection, generated $2.9 billion in sales in 2025 and aims to reach $5 billion within three years. Its value tier, Smart Way, is expanding by 1,000 items. As branded manufacturers face increasing input costs, competing for shelf space is becoming increasingly challenging.
Affects on Animal Agriculture and Protein Supply
EY-Parthenon research reveals that 66% of current and former GLP-1 users are eating more fresh produce, while 61% report increased protein consumption. Additionally, 63% are cutting back on sweets and 57% are reducing salty snacks. Over half of respondents indicate they eat out less frequently than before starting treatment. Adoption is expected to grow in the mid-20% range annually through 2030, driven primarily by falling drug prices. Among current users, 42% have already lost interest in foods they once enjoyed.
GLP-1-driven demand for high-protein yogurt outpaced Danone’s US manufacturing capacity, triggering supply disruptions. Investment in a Fort Worth, Texas facility and an upgraded Minster, Ohio plant created supply chain disruptions and customer service failures across North America. Francois Lacombe was named to lead Danone’s US operations to fix execution and retailer relationships heading into 2027. Q3 North America like-for-like sales rose 2.4%, but volume and mix fell 0.6% while price carried 3 points, meaning the growth is driven by price rather than demand. CFO Juergen Esser said 2027 needs to “look very different.”
