Experts caution that the cost of a cup of coffee will probably rise in the near future for coffee drinkers and café patrons.
This month, the cost of arabica coffee beans—the premium beans that are sold in the majority of eateries and retail establishments—rose sharply, most recently to $3.50 per pound.
This year’s 70% increase has resulted in the highest crop prices since 1977. In 1977, $3.50 would be around $0.66 when adjusted for inflation. Back then, a frost killed over a billion coffee bean trees, which led to a rise in prices. Experts now attribute this to climate change.
David Ortega, a professor of food economics and policy at Michigan State University, stated, “We’ve seen significant drought in some of the key coffee-growing areas in the world, places like Brazil, which is the largest coffee exporter in the world.”
Ortega investigates the flow of food from farmers to supermarkets.
He said that reduced crop yields in Brazil and Vietnam, two other significant coffee exporters, were caused by droughts, frost, floods, high heat, and other erratic weather conditions.
Robusta beans, which are of somewhat inferior grade and are used in goods like instant coffee, are grown in Vietnam.
“These kinds of [climate] disasters will only become more common in the future. In order to address and lessen the effects of climate change on our agricultural system and productivity, we must begin to take this seriously and engage in agricultural research and development, Ortega stated.
He said, “One effect of this is an increase in cost, which is subsequently translated into an increase in price for consumers.”
The rise will affect consumers, but it will also affect the distributors and roasters who provide them with their jolt.
The primary cause of price increases and fluctuations in the coffee industry is climate change. The market is under a lot of stress because of it. According to Jackie Newman, vice president of World of Coffee Inc., “demand is up and supply is down.”
A family-run company called World of Coffee prepares and bundles unprocessed green coffee beans for use in coffee shops, culinary services, and private brands.
According to Newman, the firm serves thousands of clients nationwide every day with its products.
“We’re going to bear as much of the expense as we can in an effort to be as equitable as feasible. “Clearly, people still require their morning cup of coffee,” Newman stated. “However, we must also ensure that we are accounting for all of our expenses, including the rise in labor and packaging costs in addition to the increase in coffee.”
In the upcoming days, she anticipates that coffee costs might rise by anywhere from 50 cents to $1 per pound.
Coffee costs cause people to react strongly, which has an impact on all links in the supply chain. Due of their extremely limited supplies, the farmers are affected. Due to the strong demand and limited supply of coffee, the green coffee vendors are impacted, she added.
Because the price is so high and we still have clients whose orders we need to fulfill, roasters are severely impacted. “That has an impact on the average consumer and trickles down the chain,” Newman continued.
“There simply isn’t enough coffee for everyone.” There may be a similar pattern in the forecast for other crops.
According to Ortega, “if we take a look at the recent floods in Europe, for instance, that affected the Valencia region [in Spain], a major agricultural producing region in that country, it had some pretty detrimental effects on things like oranges.”
In the West, where many of our specialized crops are grown, we experienced a severe drought not too long ago—two years ago—in states like California. Things like lettuce, which witnessed a sharp increase in price a few years ago, and even the production of cattle were affected by that severe drought. And right now, the repercussions are being felt in beef prices,” he added.
