Coffee Prices Rising as Supply Chain and Climate Issues Affect Bean Production

Coffee prices are going up as weather and supply chain issues continue to apply pressure on bean growers, particularly in Brazil. Arabica beans, the variety preferred by premium coffee chains, are seeing prices surge to levels not seen since 2011.

With lower-cost robusta beans in short supply, demand for arabica beans has significantly increased, sending prices 40% higher so far this year. Arabica beans were priced at $2.718 per pound in recent futures trading. Prices for robusta have also increased, up as much as 4.2%.

In Brazil, the top coffee bean producer in the world, the 2024-25 season is just about over, and rough weather, like extreme heat and drought conditions, has adversely affected the harvest. Experts are now looking at next year’s coffee bean production and fear forecasted low rain levels will only continue to damage crops.

“The potential of the 2025/26 arabica crop is hanging by a thread,” said Rabobank analyst Carlos Mera, per Bloomberg. “This problem comes at a time when the coffee industry is suffering from port congestion in several countries, global scarcity of containers, disruptions around the Red Sea, and also disappointing crops in Vietnam.”

Earlier this year, coffee consumers started paying more at the grocery store when JM Smucker Co. raised prices on its popular Folgers and Café Bustelo brands. Inflation-weary consumers are already paying more for other beverage items such as chocolate drinks and orange juice, which have had their own shortages and supply chain issues.

It’s not just increasing temperatures that are impacting coffee production. In 2021, coffee prices were on the rise after a severe frost damaged Brazilian crops.

Coffee growers in other countries, like Cuba and Honduras, could benefit from Brazil’s troubles. Smaller producers are often associated with premium or higher-quality beans, which consumers are willing to pay more for. The COVID-19 pandemic, which kept consumers out of premium cafes, created a more “discerning” coffee connoisseur, who has since been demanding a better cup of coffee.

Despite recent price hikes, coffee consumption is likely to continue climbing. According to an April survey conducted by the National Coffee Association (NCA), more than two-thirds of U.S. adults had coffee the day prior compared to just 49% in 2004.

“America’s favorite beverage has only ever continued to grow in terms of overall popularity,” said NCA President and CEO William Murray. “This year’s two-decade high is only the latest proof of America’s enduring love affair with coffee.”