Experts caution that the cost of a cup of coffee will probably rise in the near future for coffee drinkers and cafe 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 roughly $0.66 when adjusted for inflation.
More than a billion coffee bean trees were devastated by frost back then, which contributed to an increase in prices.
Experts now attribute this to climate change.
Brazil, the world’s top coffee exporter, and other important coffee-growing regions have experienced severe drought, according to David Ortega, a professor of food economics and policy at Michigan State University.
Ortega investigates the flow of ingredients from farmers to supermarkets.
He claimed 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 slightly inferior grade and are used in goods like instant coffee, are grown in Vietnam.
These kinds of [climate] occurrences 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.
According to him, one effect of this is an increase in costs, which ultimately results in higher prices for customers.
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 rising while supply is decreasing.
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 company serves thousands of customers nationwide every day with its products.
We will 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 could rise by anywhere from 50 cents to $1 per pound.
Coffee prices cause a lot of people to respond, which impacts everyone in the chain. Due of their extremely limited supplies, the farmers are affected. According to her, the high demand and limited supply of coffee have an impact on green coffee vendors.
Due to the high price and the fact that we still have customers whose orders we need to fulfill, roasters are severely impacted. According to Newman, that has an impact on the average consumer and trickles down the chain.
Simply put, there isn’t enough coffee for everyone.
There may be a similar pattern in the forecast for other crops.
According to Ortega, recent floods in Europe, for instance, had some negative effects on crops like oranges in the Valencia region [in Spain], which is a major agricultural producing region in that nation.
We had a severe drought in the West, specifically in California, where many of our specialized crops are grown, not too long ago—two years ago. Things like lettuce, which saw a sharp increase in price a few years ago, and even the production of beef were affected by that severe drought. He added that the effects on meat prices are currently being felt.
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