How much have coffee prices increased?
The average retail price of a pound of ground coffee has rocketed more than 40% over the past year, pushed up by economic, political, and environmental factors. An intense drought in Brazil, the world’s top coffee producer, and heavy rains in Vietnam, the second-largest producer, reduced the supply of beans last year. Then in April, President Trump slapped so-called reciprocal tariffs on almost all of America’s trading partners, causing prices to spike even higher. Coffee futures reached an all-time high in October, and on grocery store shelves, ground coffee topped $9 a pound. In a country that gets through some 3.5 billion pounds of coffee a year, and where two-thirds of the population drink at least one cup a day, that’s hard to ignore. Chuck Smith of Rochester, Ind., was stunned when he picked up a 38.2-ounce tub of Maxwell House at his local Walmart and noticed its price had nearly doubled in a year to $21.44. “It really caught me off guard,” he said. It’s “ridiculous.”
Does the U.S. produce much coffee?
Not nearly enough to meet demand. In Hawaii, the only U.S. state with commercial coffee cultivation, some 650 small-scale farms grow about 3.8 million pounds a year of the Big Island’s prized, $30-per-pound Kona variety. A few million more pounds come from mountainous areas of Puerto Rico. But we remain reliant on countries in the so-called coffee belt, which stretches from the Tropic of Cancer—roughly 75 miles south of the Florida Keys— to the Tropic of Capricorn, which cuts through Australia. Arabica, the most popular coffee plant species, requires both humid tropical climates and the relative coolness of elevations above 3,280 feet. Because of those growing requirements, the U.S. runs a more than $1 billion annual deficit in the coffee trade. That wasn’t considered a problem until this spring, when President Trump declared U.S. trade deficits “an emergency” that required a sweeping regime of tariffs.
How steep were the tariffs?
Trump hit Vietnam and Colombia, which together account for nearly a third of U.S. coffee imports, with duties of 20% and 10%, respectively. Brazil, which accounted for a third of coffee imports last year, incurred even higher tolls, with the White House in July stacking a 40% tariff on top of a 10% reciprocal tariff because of the “drummed up” prosecution of former Brazilian president Jair Bolsonaro, a Trump ally accused of trying to stage a coup. Since then, Brazilian coffee shipments to the U.S. have sunk 55% and prices have rocketed up, adding to Americans’ affordability concerns. In mid-November, with a Fox News poll showing that 61% of Americans disapprove of how Trump is handling the economy, the president scrapped tariffs on imports of coffee and hundreds of other grocery basics in a bid to reduce the cost of living. “The prices of coffee are a little bit high now,” Trump said. “They’ll be on the low side in a very short period of time.”
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Will prices drop substantially?
Probably not, because there are factors beyond tariffs on coffee beans keeping prices high. Roasters, cafés, and grocery stores across the U.S. are also dealing with higher costs for wages, rent, and utilities. Inflation either raises “the product costs of goods sold directly, or the cost of living of our employees, who in turn need better wages,” said Steven Sutton, founder of gourmet coffee chain Devoción. “All these factors are factored into the final coffee prices.” Then there’s the fact that global demand for coffee is spiking while supplies lag. In China, where workers in the traditionally tea-drinking society are increasingly seeking something stronger, coffee consumption has surged 150% over the past decade. The country now goes through about 833 million pounds of coffee a year. Consumption of premium coffee is also rising in the big producers, including Brazil, Vietnam, and Indonesia. “So there’s going to be less available coffee to export,” said California-based importer John Cossette, “and that’s going to make it more expensive as well.” Growers, meanwhile, are not reaping the benefits of rising coffee prices.
Why not?
Because they’re having to pay more for fertilizer and for laborers, and are increasingly struggling to find pickers who’ll work in the fields for as little as $2 a day—a wage that helps growers keep their product competitively priced. “A lot of producers are starting to lose hope,” said Honduran farmer Moises Herrera. And there’s another threat to supplies: climate change. Rising heat, extreme downpours, and the spread of pests and diseases that thrive in hot and wet conditions are reducing the number of cool mountainsides where the highland bean can thrive. By 2050, according to multiple studies, more than half of all areas now suitable for coffee growing may no longer be able to support the crop.
Will our cups go empty?
Not necessarily, but we may have to become less picky about what we sip. Climate change could open new regions, such as northern Argentina and China’s Yunnan province, to coffee cultivation. But growers may plant less arabica, which has trouble thriving if average annual temperatures go above 73 degrees Fahrenheit, and rely more on lower-grade robusta, which can withstand higher temperatures. Farmers are experimenting with other hardy, lesser-grown coffee plants such as liberica, which is native to tropical Central Africa. Prices will likely continue to rise in the coming years—possibly at a slower pace— but coffee insiders say that’s unlikely to cause many Americans to kick their java habit. “People forget that coffee is a drug, a legal drug,” said Brian Phillips, who sources beans for Anthem Coffee Imports in Kansas City, Mo. “Coffee consumption is not slowing down by any means.”
