Consumer Price Analysis - Lodi & San Joaquin County

Lodi

Feb 5

Consumer Price Analysis – Lodi & San Joaquin County

Prepared for Lodi411.com | February 5, 2026

Executive Summary

Lodi and San Joaquin County residents face a convergence of economic forces driving consumer prices higher across virtually every spending category in early 2026. This analysis examines five interconnected pressure points: federal tariffs on imported goods, the weakening U.S. dollar, global oil market dynamics, California refinery shutdowns, and local utility rate structures. Together, these factors create a compounding effect that raises costs not just at the point of purchase, but throughout the entire supply chain.

The key findings are sobering. Tariffs imposed since early 2025 have added an estimated $1,800 per household annually in higher costs, with food prices projected to rise an additional 3% and fresh produce by 7%. The U.S. dollar fell over 9% in 2025—its worst annual performance since 2017—making all imports more expensive. California is losing 17% of its refining capacity with the shutdown of Phillips 66 (October 2025) and Valero Benicia (January 2026), with gas prices projected to rise $1.21 or more per gallon by mid-2026. These fuel increases cascade into every consumer category through transportation and production costs.

Lodi residents benefit from municipally-owned electric service at roughly $0.20/kWh—about 56% below PG&E's residential rate of $0.45/kWh. However, all Lodi residents use PG&E for natural gas, which saw an 8.6% rate increase in January 2025 before a modest 3% decrease in January 2026. The net effect is that utility costs remain elevated compared to historical norms.

Estimated additional annual cost burden on a typical Lodi family of four: $2,377–$4,115/year
        (midpoint ~$3,200 or ~$267/month)
    

1. Tariff Impacts on Consumer Prices

1.1 Overview of 2025 Trade Policy

The Trump administration implemented the most significant tariff increases in nearly a century beginning in early 2025. The policy included a universal 10% tariff on all imported goods, higher "reciprocal" tariffs on 60+ countries, and tariffs on Chinese imports exceeding 100% at their peak. According to the Tax Foundation, nearly 75% of all U.S. food imports—worth over $163 billion—were affected.

The Federal Reserve Bank of St. Louis found that tariffs accounted for approximately 0.5 percentage points of headline inflation and 0.4 percentage points of core inflation between June and August 2025. The CPI—which reached 3.0% in September 2025—would have been closer to 2.24% without tariffs, broadly consistent with the Fed's 2% target.

1.2 Impact on Grocery Prices

Food prices have been particularly vulnerable to tariff pressure. The U.S. imports approximately 17% of all food and beverages consumed domestically, but dependency varies dramatically by category: roughly 80% of seafood, 80% of coffee, 59% of fresh fruit, and 35% of vegetables consumed in the United States are imported.

Key findings from multiple analyses:

Food prices were projected to rise an additional 3% due to tariffs, with fresh produce jumping by 7% (AP-NORC/industry analysis, August 2025)
Apparel prices rose 17% and food prices climbed 2.8% due to tariffs alone (Yale Budget Lab estimate)
Nearly 40,000 supermarket products—about half of all items—are affected by tariffs either directly or through ingredient sourcing
The federal government collected an additional $1.5 billion in extra tariffs on food/agriculture items in just four months of 2025—a 647% increase
November 2025 exemptions on hundreds of agricultural products provided some relief, but more than half of food imports remain tariffed

Industry analysts warn that the full tariff impact on food prices is still ahead. Manufacturers and retailers shielded consumers from most costs through 2025 by absorbing margins, but that capacity is exhausting. As one analyst noted: "It is in 2026, and potentially even late 2026, that we will start to see consumers feel a pinch of these higher tariffs."

Grocery Category Tariff Exposure

Category	Import Share	Tariff Rate Range	Est. Price Impact
Seafood	80%	10–36%	+8–15%
Coffee	80%	10–50%	+10–20%
Fresh Fruit	59%	10–25%*	+7%
Vegetables	35%	10–25%*	+4–7%
Rice (Jasmine/Basmati)	~33%	26–36%	+8–12%
Olive Oil	99%	10–20%	+15–20%
Alcohol/Wine/Beer	Varies	10–25%	+10–25%
* USMCA-covered produce from Mexico/Canada currently exempt from reciprocal tariffs.

Grocery Import Dependency & Estimated Price Impact

1.3 Impact on Durable Goods

Durable goods—vehicles, electronics, furniture, appliances, and recreational equipment—saw their first price increase since November 2022, rising at a 0.6% annual pace in June 2025. The Yale Budget Lab found PCE durable goods prices rose 1.7% in the first half of 2025, compared to a decline of 0.6% in the same period in 2024.

Category-specific impacts were pronounced:

Video, audio, and information processing equipment: 5.7% above pre-2025 trend
Household appliances: 3.9% above trend
Furniture: 3.1% above trend
Recreational items: 3.0% above trend
Household supplies: 2.6% above trend

For Lodi residents, the appliance impact is particularly relevant. The 50% tariff on "steel equivalent" in imported appliances (freezers, washers, dryers, dishwashers, ovens) went into effect in June 2025. Whirlpool's CEO estimated new tariffs could increase imported appliance retail prices by $50–$70 per unit, while broader estimates from OpenBrand suggest electronics and appliances could rise 30–40% over time. Brands like Bertazzoni already implemented 20–40% price increases.

The 61–80% passthrough rate estimated by the Yale Budget Lab means consumers are bearing the majority of tariff costs on durable goods. While some analysts expect moderation in 2026 as supply chains adjust, the era of consistently declining durable goods prices appears to be over.

Durable Goods: Price Increase Above Pre-2025 Trend

2. The Falling U.S. Dollar

2.1 Scale of the Decline

The U.S. dollar experienced its worst annual performance since 2017 in 2025, falling over 9% against a basket of major trading partner currencies. The Dollar Index (DXY) fell approximately 11% from January through June 2025—the worst first-half performance since 1973—formally ending a structural bull cycle that began in 2010.

Against individual currencies, the declines were even steeper: the dollar depreciated 13.5% against the euro, 13.9% against the Swiss franc, and 6.4% against the Japanese yen through September 2025.

2.2 Causes

Tariff uncertainty: Trade policy volatility forced investors to rethink the U.S. growth outlook
Rising fiscal deficits: Federal debt exceeded $37 trillion (130%+ of GDP), exacerbated by the "One Big Beautiful Bill"
Fed rate cuts: Interest rates fell from 5.25–5.5% toward 3–3.25%, narrowing the differential with other currencies
Weakening confidence: Questions about Federal Reserve independence and policy predictability
De-dollarization: BRICS nations increased local currency trade settlement from 35% to 50%

2.3 2026 Outlook

Major institutions project continued dollar weakness in 2026:

Morgan Stanley: Dollar index could fall to 94 by Q2 2026 (another 3–6% decline from current ~98)
J.P. Morgan: Maintains bearish dollar outlook for 2026
Goldman Sachs: Projects 3–5% decline, with DXY ending around 99
Deutsche Bank: Forecasts DXY falling another 3% to approximately 99 by year-end 2026

2.4 Local Impact on Prices

A weaker dollar directly increases the cost of imports for U.S. consumers. For Lodi and San Joaquin County, this amplifies every other inflationary pressure:

Imported goods become more expensive even without new tariffs—a 10% dollar decline effectively adds ~10% to import costs
Oil is priced in dollars globally; a weaker dollar means U.S. consumers pay relatively more for the same barrel
Agricultural inputs (fertilizer, equipment parts) sourced internationally cost more
Consumer electronics, vehicles, and appliances with imported components see higher input costs

The dollar decline compounds the tariff effect: when a 25% tariff is applied to a good that already costs 10% more due to dollar weakness, the combined price increase exceeds 35% from the consumer's perspective.

U.S. Dollar Decline vs. Major Currencies (2025)

3. Oil Prices & California Refinery Shutdowns

3.1 Global Oil Price Outlook

Ironically, global crude oil prices are declining in 2026, which under normal circumstances would provide relief at the pump. The EIA forecasts Brent crude averaging $56/barrel in 2026—a 19% decline from 2025. WTI crude is expected to average around $51–53/barrel. As of early February 2026, WTI was trading near $62 before dropping sharply on U.S.-Iran diplomatic developments.

The bearish oil outlook is driven by a projected global surplus of 2+ million barrels per day, with supply growing far faster than demand. OPEC+ has been unwinding production cuts, and non-OPEC producers (U.S., Brazil, Guyana) continue expanding output.

For the national average, the EIA forecasts U.S. gasoline will average just over $2.90/gallon in 2026. But California is a dramatically different market.

3.2 California Refinery Closures: A Supply Crisis

California is experiencing an unprecedented loss of in-state refining capacity that overrides the global oil price decline:

Refinery	Capacity (bpd)	% of CA Capacity	Closure Date
Marathon Martinez	161,000	~10%	2020 (converted)
Phillips 66 Rodeo	120,000	~7%	Early 2024 (converted)
Phillips 66 Wilmington	139,000	8.6%	October 2025
Valero Benicia	145,000	8.6%	January 31, 2026*
* Originally planned for April 2026; Valero accelerated shutdown and went cold on January 31, 2026.

The Phillips 66 and Valero closures alone eliminate approximately 17% of California's refining capacity. Combined with earlier closures, the state has lost more than a third of its refining capacity over the past five years. Valero's Benicia closure—just 60 miles from Lodi—is particularly significant for the local fuel supply.

California Refinery Closures: Lost Capacity (barrels per day)

3.3 Price Projections for California

Multiple academic and industry analyses project significant gasoline price increases:

UC Davis economists: California gas prices could rise by $1.21/gallon above current levels by August 2026 when both closures are fully realized (conservative estimate assuming no disruptions)
USC Professor Michael Mische: Prices could reach $7.35–$8.43/gallon by end of 2026—a 75% increase from April 2025's $4.82 level
Petroleum expert Mike Ariza: Extreme scenarios could see $10–$12/gallon

As of late 2025, California's statewide average was approximately $4.34/gallon—already $1.40+ above the national average of $2.90. With the Valero Benicia shutdown confirmed as of January 31, 2026, prices are already climbing.

California Gas Price Projections vs. National Average (2026)

3.4 Lodi-Area Fuel Prices

The Stockton-Lodi metropolitan area has tracked California's volatile fuel market throughout 2025:

Current (February 2026): Regular gasoline approximately $3.99–$4.39/gallon at Lodi stations; diesel approximately $5.14/gallon
February 2025 spike: $4.80/gallon (+6% weekly increase) following Martinez Refinery explosion
August 2025: Regular averaged $4.38/gallon; diesel $5.22/gallon
The diesel premium over gasoline ($0.54–$0.84) reflects higher taxes, stricter environmental regulations, and supply constraints

3.5 Why California Prices Diverge from National Trends

Geographic isolation: West Coast is disconnected from Gulf Coast refining hubs by pipeline
Unique fuel blend: CARBOB gasoline specification requires specially equipped refineries; only a few Asian refineries can produce it
Regulatory costs: Low Carbon Fuel Standard, Cap-and-Trade, SBX1-2 compliance adds $0.60–$0.65/gallon
State taxes: California excise tax has increased 253% over 30–50 years
Import dependency: With closures, California must import more fuel from Gulf Coast and Asia via tanker—longer transit = higher costs and volatility

4. Utility Rates for Lodi Residents

4.1 Lodi Electric Utility (Electricity)

Lodi residents benefit significantly from the city's municipally-owned electric utility. As a not-for-profit entity governed by the Lodi City Council, Lodi Electric offers rates substantially below investor-owned utilities:

Metric	Lodi Electric	PG&E
Avg. Residential Rate	$0.1962/kWh	$0.4480/kWh
Avg. Monthly Bill	$134 (est.)	~$224
Annual Cost (avg. usage)	~$1,608	~$2,688
Rate Advantage	56% lower	Baseline
Rate Setting Authority	Lodi City Council	CA Public Utilities Comm.

Lodi Electric uses tiered rates—higher usage means a higher average rate. Summer rates are higher than winter rates. The utility is entirely rate-supported and uses no taxpayer money. All surpluses are reinvested in utility operations and city coffers. Importantly, Lodi Electric customers are unaffected by California's proposed income-based rate structure for investor-owned utilities.

Note: PG&E announced a 5% reduction in residential electric rates effective January 1, 2026, bringing their average rate down. Despite this, Lodi's rate advantage remains substantial.

Lodi Electric vs. PG&E: Annual Cost Comparison

4.2 PG&E Natural Gas (All Lodi Residents)

While Lodi operates its own electric utility, all Lodi residents use PG&E for natural gas service. Gas rates have been volatile:

January 2025: PG&E raised gas rates 8.6%, adding approximately $9/month for average residential customers
January 2026: PG&E decreased gas rates 3%, providing modest relief
Net effect: Gas rates remain approximately 5–6% higher than January 2024 levels
Typical residential gas bill: Approximately $80–$90/month (31 therms/month average)

PG&E's bundled residential gas rate includes transportation costs, public purpose surcharges, and commodity costs. The commodity procurement cost component averages approximately $0.467/therm but varies monthly based on wholesale natural gas markets.

Looking ahead, PG&E has filed a General Rate Case requesting additional increases. While the company says customer bills are expected to remain flat in 2027 compared to 2025, the 2028–2030 outlook is uncertain with multiple pending rate cases. Growing demand for LNG exports and natural gas-fired electricity generation could push gas prices higher.

4.3 Combined Utility Cost for Lodi Households

Utility Component	Monthly (Est.)	Annual (Est.)
Lodi Electric	$134	$1,608
PG&E Natural Gas	$85	$1,020
Total Utilities	$219	$2,628
If on PG&E Electric instead	$309	$3,708
Annual Savings vs. PG&E Electric	$90/mo	$1,080/yr

Lodi households save an estimated $1,080 annually on electricity alone compared to equivalent PG&E electric customers. This advantage partially offsets the higher fuel and grocery costs that Lodi residents face alongside all Californians.

5. Fuel Price Cascade: Impact on All Consumer Categories

Rising fuel prices do not just affect what consumers pay at the pump. They cascade through the entire economy, raising costs for groceries, durable goods, utilities, and services. This section quantifies those secondary effects for Lodi and San Joaquin County.

5.1 Transportation's Role in Consumer Prices

Transportation accounts for approximately 9% of the retail food cost, according to USDA research. Roughly 70.5% of food in the U.S. relies on trucks for transport from farms to wholesalers to retailers to consumers. The American Trucking Association has noted that grocery stores would run out of food within three days if trucking ceased.

Diesel fuel is the critical cost driver. For commercial trucking, fuel represents 25–35% of total operating costs. In California, where diesel prices already carry a premium of $0.54–$0.84 over gasoline and reached $5.22/gallon as of August 2025, transportation costs hit harder than in any other state.

5.2 Calculating Fuel Price Passthrough to Groceries

Using research from ScienceDirect and USDA studies, we can model the diesel-to-grocery price transmission:

Factor	Value
Transportation share of retail food cost	~9%
Fuel share of trucking operating costs	25–35%
Fuel's effective share of grocery price	2.3–3.2%
CA diesel price (Aug 2025)	$5.22/gallon
Projected CA diesel (mid-2026, +$1.21)	~$6.43/gallon
Diesel price increase	~23%
Estimated grocery price impact from fuel alone	0.5–0.7%

For a Lodi household spending $1,200/month on groceries (near the San Joaquin County average for a family of four), the fuel-driven increase alone adds $6–$8/month, or $72–$100/year. This is on top of the tariff-driven 3–7% increase and other inflationary pressures.

5.3 Fuel Price Impact on Durable Goods

Durable goods are transported by truck, rail, and ship—all fuel-intensive. The fuel component in durable goods pricing is smaller than for groceries (roughly 1.5–2.5% of final cost) because these goods are higher-value per pound and often transported in bulk. However, the tariff effect on durable goods is much larger:

Price Driver	Groceries	Durable Goods	Utilities
Tariff effect	+3–7%	+2–6%	+0.5–1%
Dollar decline effect	+1–2%	+2–4%	+0.3–0.5%
CA fuel price increase	+0.5–0.7%	+0.3–0.5%	+0.2–0.4%
Sector-specific factors	+1–2%	+1–3%*	+3–9%**
Total estimated increase	+5.5–11.7%	+5.3–13.5%	+4–11%
* Steel/aluminum tariffs on appliances, supply chain disruptions. ** PG&E gas rate changes, infrastructure costs.

Price Increase Drivers by Consumer Category (Midpoint Estimates)

5.4 Fuel Price Impact on Utility Costs

Fuel prices affect utility costs through multiple channels:

Natural gas generation: Approximately 37% of California's electricity comes from natural gas. While Lodi Electric purchases wholesale power, those wholesale prices reflect gas-fired generation costs
Infrastructure maintenance: Utility trucks, equipment, and maintenance vehicles all consume diesel
Steel and aluminum tariffs: Transmission infrastructure (poles, wires, transformers) uses tariffed materials, raising capital costs for both Lodi Electric and PG&E
Natural gas commodity: PG&E's residential gas rates include commodity procurement at ~$0.467/therm. Henry Hub natural gas prices are expected to average ~$3.50/MMBtu in 2026, with potential increases driven by growing LNG export demand and gas-fired power plant consumption

5.5 Agricultural Impact: San Joaquin County's Unique Vulnerability

San Joaquin County is one of California's most productive agricultural regions, and the fuel price crisis hits particularly hard here:

Farm equipment: Tractors, harvesters, and irrigation pumps are diesel-dependent with no near-term alternatives
Transportation: Local produce must be trucked to distribution centers and markets; diesel costs directly affect farm-gate economics
Refrigeration: Cold-chain logistics for perishable goods require diesel-powered refrigerated trucks (reefers), which consume 30–50% more fuel than standard trucks
The Advanced Clean Fleets rule requiring diesel truck phase-outs by 2042 adds long-term uncertainty for agricultural transportation

For locally-sourced produce sold in Lodi grocery stores, the fuel impact may be lower than for imported goods—but rising diesel costs still flow through to the consumer via farm operating costs and local distribution.

6. Combined Annual Impact on a Lodi Household

Bringing together all five pressure points, we can estimate the total additional annual cost burden on a typical Lodi household (family of four, median income):

Spending Category	Annual Spend	Est. Increase	Added Cost
Groceries & Food	$14,400	6–10%	$864–$1,440
Gasoline (2 cars, 24k mi/yr)	$5,280	+$1.21/gal	$1,162–$1,936
Durable Goods & Appliances	$4,000	5–10%	$200–$400
PG&E Natural Gas	$1,020	3–5%	$31–$51
Lodi Electric	$1,608	0–3%	$0–$48
Other (clothing, services, etc.)	$6,000	2–4%	$120–$240
TOTAL ESTIMATED ANNUAL INCREASE			$2,377–$4,115

Estimated Additional Annual Costs by Category (Midpoint)

At the midpoint of these estimates, a typical Lodi family faces approximately $3,200 in additional annual costs—roughly $267/month—compared to 2024 prices. The Yale Budget Lab's national estimate of $1,800 per household in tariff costs alone is consistent with the lower bound of this local analysis, which adds California-specific fuel and regulatory pressures.

6.1 Offsetting Factors

Several factors partially offset these increases for Lodi residents:

Lodi Electric advantage: ~$1,080/year savings versus PG&E electric customers
Lower global oil prices: National gasoline forecast of $2.90/gallon in 2026 should moderate wholesale costs, though California's refinery crisis overrides this benefit
PG&E rate decreases: 5% electric rate cut and 3% gas rate cut in January 2026 provide modest relief
Tariff exemptions: November 2025 agricultural exemptions removed tariffs from hundreds of food items
Moderating durable goods inflation: As supply chains adjust and tariff passthrough completes, durable goods prices may stabilize in late 2026

7. Outlook and Key Risks

7.1 Upside Risks (Prices Could Be Higher Than Projected)

Valero Benicia shutdown impact is only beginning to be felt; full price adjustment may take until August 2026
Additional refinery incidents (like the October 2025 Chevron El Segundo fire) could spike prices further
Dollar could fall more than projected if policy uncertainty increases
Tariffs could escalate further, particularly on China, if trade negotiations stall
Climate events (heat waves, storms) could disrupt agricultural supply chains and refinery operations simultaneously

7.2 Downside Risks (Prices Could Be Lower Than Projected)

Global oil surplus of 2+ million bpd could push crude below $50, offsetting some California premium
Trade deals could reduce or eliminate remaining tariffs
Dollar could stabilize if U.S. growth exceeds expectations
California regulatory relief could ease fuel blend requirements or import restrictions
Consumer demand destruction could moderate prices if spending pulls back significantly

7.3 Timeline of Key Events to Watch

Timeframe	Event / Factor
Feb 2026	Valero Benicia shutdown begins impacting fuel supply
Q1 2026	Full tariff passthrough on food/durable goods accelerates
Q2 2026	Dollar potentially reaches 2026 low (DXY ~94); summer fuel blend transition
Aug 2026	Full refinery closure impact realized; UC Davis projects +$1.21/gallon by this date
H2 2026	PG&E General Rate Case decision expected; potential new rate increases
Late 2026	Dollar may recover; durable goods prices could stabilize; trade deal progress possible

For Lodi and San Joaquin County residents, the first half of 2026 is likely to bring the sharpest cost increases, driven by the compounding effects of refinery shutdowns, tariff passthrough, and dollar weakness. Some moderation is possible in the second half of the year if global oil prices remain low, trade tensions ease, and the dollar stabilizes. However, California's structural fuel price disadvantage—driven by declining refining capacity and stringent regulations—will persist as a long-term cost pressure unique to West Coast consumers.

Sources & References

San Joaquin CountyEconomy

Don Bradford