How El Niño Might Affect Your Everyday Spending

A powerful El Niño is developing in the Pacific Ocean, and experts warn it could drive up food and energy costs for households in the months ahead.

On June 11, the National Oceanic and Atmospheric Administration (NOAA) announced that El Niño conditions had formed in the Pacific Ocean. The agency said there is a 63 percent chance the event will become “very strong,” bringing increased risks of flooding, storms and disruptions to marine ecosystems.

Meteorologists and economists, including analysts at the World Bank, warn the climate pattern could disrupt food supply chains and add to existing inflationary pressures in the United States and globally.

What Is an El Niño?

El Niño, Spanish for “little boy,” is a climate pattern characterized by unusually warm ocean surface temperatures in the central and eastern tropical Pacific.

The warming disrupts normal weather patterns around the world, often bringing flooding and heavy rainfall to some regions while triggering droughts and heatwaves in others.

Why El Niño Matters for Prices

Because modern food systems depend heavily on predictable weather, El Niño events can disrupt harvests and reduce supplies of key agricultural commodities.

Flooding, storms and drought can also damage infrastructure and disrupt transportation networks, creating additional pressure on supply chains.

Historically, major El Niño events have triggered significant economic losses around the world. A 2023 study estimated that the 1997-98 El Niño reduced global economic output by roughly $5.7 trillion.

According to the World Bank, the last major El Niño in 2016 contributed to an estimated $327 million in agricultural production losses.

How This El Niño Could Hit Your Budget

El Niño conditions officially emerged this month and are expected to strengthen in the months ahead, according to the World Meteorological Organization (WMO). Some forecasters have suggested the event could reach “super” or “Godzilla” status, a term used for exceptionally strong El Niños marked by sea surface temperatures more than 2 degrees Celsius above average.

Even if it falls short of “super” El Niño status, the event could still have significant consequences for household budgets.

The climate pattern is expected to affect both summer cooling and winter heating demand. AccuWeather’s Paul Pastelok told Newsweek that warmer conditions could shift energy demand across parts of the eastern United States.

He added that drier conditions in the Northwest and Upper Midwest could mean higher cooling costs during summer but lower heating expenses later in the year.

Food Prices in Focus

In early June, the World Bank warned that El Niño could compound existing strains on global food markets, which are already facing disruptions linked to energy and fertilizer supply concerns.

The bank’s Commodity Markets Outlook projects fertilizer prices will rise by 31 percent on average in 2026. It has also warned that a prolonged El Niño could threaten crop production across parts of Asia and Africa, with rice yields potentially falling by 20 to 50 percent in some regions.

A 2023 analysis by the European Central Bank concluded that a strong El Niño could push global food commodity prices higher for up to two years.

In the United States, El Niño has historically boosted soybean harvests while reducing corn and wheat yields.

Analysts say developing countries are likely to face the greatest burden because households spend a larger share of their income on food.

Fitch Ratings warned last week that prolonged shortages could amplify El Niño-related risks to global food prices and complicate inflation outlooks even in advanced economies.

Analysts at Schroders Wealth Management warned that a super El Niño could sharply increase food prices over the next year as extreme weather collides with existing economic and geopolitical pressures.

“If past correlations were to hold, then a very strong El Niño would imply a doubling of global food prices from current levels over the next year or so,” the analysts wrote in a report published last week.

Contact Newsweek editors on this story: Federica Bindi and James Debens.

2026 NEWSWEEK DIGITAL LLC.

This story was originally published June 22, 2026 at 11:25 AM.