Coffee enthusiasts and café regulars should brace themselves for a potential increase in the price of their beloved beverage. Experts have recently highlighted a significant spike in the cost of arabica coffee beans, which are the high-quality beans commonly found in restaurants and coffee shops. As of this month, prices have surged to $3.50 per pound, marking a staggering 70-percent increase this year alone. This is the highest price point for arabica coffee since 1977.
To put this into perspective, when adjusted for inflation, the current price of $3.50 is equivalent to approximately $0.66 in 1977. Back then, the price hike was largely attributed to a devastating frost that wiped out over a billion coffee bean trees in Brazil. Today, however, experts point to climate change as the primary culprit behind the rising costs.
The role of climate change
David Ortega, a professor of food economics and policy at Michigan State University, explains that significant droughts in key coffee-growing regions, particularly in Brazil—the world’s largest coffee exporter—are contributing to the decline in crop yields. Other unpredictable weather events, such as floods and high temperatures, have also played a role in diminishing coffee production in both Brazil and Vietnam, another major coffee-producing country known for its robusta beans.
Ortega emphasizes that the frequency of these climate-related events is likely to increase in the future, necessitating urgent investments in agricultural research and development. He states, “One impact of this is a rise in cost, which then gets translated to a rise in price for consumers.” This means that not only will coffee drinkers feel the pinch, but roasters and distributors will also be affected as they navigate the rising costs.
Impact on coffee consumers and the supply chain
Jackie Newman, vice president of World of Coffee Inc, a family-owned business that processes raw green coffee beans, notes that the increase in coffee prices is a complex issue that impacts everyone in the supply chain. She anticipates that coffee prices could rise by anywhere from 50 cents to $1 per pound in the near future. “People are very reactive to coffee prices, and this affects everyone down the chain,” Newman explains.
- Farmers: They are facing low supply due to adverse weather conditions.
- Green coffee sellers: With high demand and low supply, they struggle to meet market needs.
- Roasters: They are under pressure to maintain customer orders while managing rising costs.
Newman adds, “There is just simply not enough coffee to go around.” This situation is not isolated to coffee; other crops may follow a similar trend due to climate impacts. For instance, recent floods in Europe have adversely affected agricultural production in regions like Valencia, Spain, which is known for its oranges.
Broader implications for agriculture
Ortega points out that the agricultural sector is already feeling the repercussions of climate change. He recalls a significant drought in California two years ago that severely impacted specialty crops, including lettuce and beef production. The rising costs of these essential food items are a direct result of climate-related challenges faced by farmers.
As coffee prices continue to rise, consumers may need to adjust their budgets accordingly. The ripple effects of climate change on agriculture are profound, and the coffee industry is just one example of how these environmental shifts can impact everyday life.
