Ice Cream Price Analysis - May 2025
Summary
Ice cream prices in the United States reached $6.466 in May 2025, representing a significant 7.8% annual increase and a sharp 3.8% monthly jump from April. This marks the highest price level in the dataset, driven by multiple converging factors including coconut oil supply disruptions, broader food inflation trends, and seasonal demand pressures.
Current Price Trends
Latest Price Data (May 2025)
- Current Price: $6.466 per unit
- Monthly Change: +3.8% (+$0.237 from April)
- Annual Change: +7.8% (+$0.466 from May 2024)
- 3-Month Change: +3.4% (+$0.211 since February)
Historical Context
The May 2025 price represents the highest level recorded in the historical dataset, surpassing the previous peak of $6.459 in January 2025. Food prices are up 29.5% since December 2019, with ice cream experiencing particularly volatile pricing patterns.
Key Factors Driving Price Increases
1. Coconut Oil Supply Crisis
The price of coconut oil, a key ingredient in ice cream, has soared in 2025. At the end of May, the wholesale price for Philippine coconut oil delivered in Rotterdam, an industry benchmark, reached $2,800 a tonne, roughly twice as much as the year before.
Contributing Factors:
- Adverse weather in Indonesia and the Philippines, which together account for three-quarters of global coconut oil supplies, has negatively affected production
- The United States Department of Agriculture expects that unfavourable weather conditions will see global coconut oil production fall to 3.6 million tonnes in 2024-2025, down 5 to 10 percent from the previous season
- In October, the Philippine government mandated blending larger amounts of coco methyl ester, a fatty derivative of coconut oil, with diesel to produce biodiesel. But that changed last year, when Manila hiked the target to 3 percent. The government announced a further jump to 4 percent by late 2025 and 5 percent by the end of 2026
2. Broader Food Inflation Environment
The average price of food in the United States rose by 2.9% in the 12 months ending May, after posting an annual increase of 2.8% in April, according to the latest inflation data published June 11, 2025, by the U.S. Labor Department's Bureau of Labor Statistics (BLS)
Categories like breakfast cereal, rice, bakery products, frozen fish and ice cream saw increases over April prices, indicating that ice cream is part of a broader pattern of food price increases.
3. Seasonal Demand Pressures
According to an analysis by RIFT, a British business consultancy, United Kingdom supermarket ice lollies and cones shot up by 7.6 percent in May, suggesting that seasonal summer demand is contributing to global price pressures.
Recent Market Volatility
Monthly Price Movements (2025)
| Month | Price | Monthly Change | Annual Change |
|---|---|---|---|
| May | $6.466 | +3.8% | +7.8% |
| April | $6.229 | -1.6% | +0.5% |
| March | $6.328 | +1.2% | +10.4% |
| February | $6.255 | -3.2% | +6.3% |
| January | $6.459 | +3.0% | +9.4% |
The data reveals significant month-to-month volatility, with prices swinging from -3.2% in February to +3.8% in May 2025.
Economic Context and Policy Impacts
Tariff Considerations
This was a surprising announcement, as many of us were expecting the ongoing trade disputes and recently implement tariffs by the Trump Administration to impact prices last month. However, the immediate effect of these tariffs may have been blunted, as many businesses reportedly built up inventory before the tariffs were imposed
"Even with the recent agreement between the Trump administration and China to reduce the most onerous import taxes, tariffs against all U.S. trading partners are much higher than they were at the beginning of 2025," said Gus Faucher, chief economist at PNC Financial. "Those higher tariffs will work their way into consumer goods prices over the next few months, pushing inflation back up."
Consumer Impact
A majority of U.S. adults (62%) say how much food costs is extremely or very important to them when deciding what to buy, highlighting the significant impact of these price increases on consumer behavior.
Long-term Price Trajectory
Historical Inflation Rate
Between 1977 and 2024: Ice cream and related products experienced an average inflation rate of 3.11% per year. This rate of change indicates significant inflation
The current 7.8% annual increase significantly exceeds this historical average, indicating an accelerated inflationary period for ice cream.
Future Outlook
Looking ahead, further price gains are likely as demand continues to outpace supply. Output is also likely to stay low in the 2025-2026 season, according to analysts
Summary
Ice cream prices in May 2025 reached unprecedented levels, driven by a perfect storm of supply chain disruptions, particularly in coconut oil markets, broader food inflation trends, and seasonal demand pressures. The 7.8% annual increase far exceeds historical norms and reflects the complex interplay of global commodity markets, weather-related supply disruptions, and policy changes in key producing regions. With coconut oil supplies expected to remain constrained and seasonal demand continuing, prices may remain elevated through the summer months.
Key Takeaway: The dramatic price surge in ice cream reflects broader vulnerabilities in global food supply chains, with single ingredient disruptions (coconut oil) having outsized impacts on final consumer prices.