Re-posted from Food & Wine: https://www.foodandwine.com/coffee-prices-record-high-8782049
The Price of Coffee in the US Hit an All-Time High — Here's Why
By Stacey Leasca Published on January 29, 2025
On Tuesday, Arabica coffee prices hit an eye-watering new high on the Intercontinental Exchange at $3.48 a pound, according to the Wall Street Journal. This means the price is up more than 40% over the last three months and 79% year-over-year — and it's set to trickle down to the consumer level soon. However, this sharp increase can't be blamed on one single cause. Instead it's the result of several converging influences.
"The rising coffee prices are part of a larger, global challenge driven by climate change, economic pressures, and geopolitical uncertainty," Yannis Apostolopoulos, the CEO of the Specialty Coffee Association (SCA), shares with Food & Wine.
According to Apostolopoulos, while consumers in the United States may see shifts in pricing at retail establishments and cafes, the impact is felt most "acutely by coffee producers around the world, many of whom are already vulnerable to market volatility and the effects of climate disruptions."
Why are coffee prices so high?
Arabica coffee prices are especially impacted, as Brazil, the crop's largest producer, faced a lengthy drought in 2024, leading to poor crop estimates for the upcoming year. Because of this, as International Comunicaffe reported, Volcafe specialists cut their 2025 and 2026 forecast for Arabicas to 34.4 million bags, down nearly 11 million bags from the September estimate.
Pricing issues were also compounded this week by President Donald Trump's threat to enact a 25% tariff on Colombian goods if the country did not allow his deportation planes to land in the nation. Of note, The Observatory of Economic Complexity explains that Colombia is America's second-largest supplier of coffee, just behind Brazil, meaning a tariff on imports from Colombia would likely make its products far more expensive for U.S. consumers.
This threat was seemingly diffused after Colombia's president Gustavo Petro agreed to the flights, but the Trump administration has said that the tariffs and sanctions will be held “in reserve” and could still be implemented at any time if Colombia backs out of the deal. And that was enough to send traders into a spiral.
“When President Trump even makes threats about tariffs, the minute you introduce uncertainty into a global trade system, and that’s what global trade is, things are going to get a little crazy,” Dan Gardner, the president of Trade Facilitators, a supply chain, trade, and logistics company, shared with CNN.
Does this mean coffee will be more expensive for consumers?
The increase in pricing due to potential tariffs and drought is also leaving family-run American businesses rattled — among them is California-based coffee company Klatch Coffee.
"Coffee prices continue to blow us away, and they continue to break record after record," Heather Perry, the CEO of Klatch Coffee and a U.S. Barista Champion, says, adding that they can't find one "obvious cause" of the price increases. Unfortunately, they also can't predict what will happen next, but Perry notes that "These prices will come down to the consumer in the next three to six months."
Whether or not consumers will tolerate price volatility — and if so exactly how much — is yet to be determined. But Apostolopoulos observes that across the globe, consumers are demanding more transparency and sustainable options, which is "driving innovation in how coffee is grown, processed, and consumed. In the U.S, these factors are influencing purchasing decisions, with consumers becoming more conscious of the origin and environmental impact of their coffee."
However, Apostolopoulos also points out that, "Adapting to these challenges requires collaboration across the value chain, balancing short-term financial realities with long-term goals to support producers and meet consumer expectations for traceability and quality.
For now, Perry adds, she's "very worried." But at least she has a sense of humor about the situation, remarking that "the big advantage we still have is coffee is still cheaper than a cocktail."
