Coffee lovers and cafe patrons will soon see the price of a cup of joe go up, experts have warned.
This follows this month’s price hike for Arabica coffee beans, the high-quality coffee beans sold in most restaurants and shops, recently hitting $3.50 per pound.
Prices have risen 70% this year, the highest since 1977.
Adjusted for inflation, $3.50 would be about $0.66 in 1977.
The reason for the price hike at the time was that more than 1 billion coffee bean trees died due to frost.
And today, experts say climate change is to blame.
“Severe droughts are occurring in some of the world’s major coffee producing regions, including Brazil, the world’s largest coffee exporter,” said David Ortega, a professor of food economics and policy at Michigan State University. .
Ortega studies supply chains and how food moves from farmers to grocery stores.
He said drought, frost, floods, high temperatures and other unpredictable weather conditions are contributing to reduced yields in both Brazil and Vietnam, another major coffee exporter.
Robusta beans are grown in Vietnam, but they are of somewhat lower quality and are used in products such as instant coffee.
“We’re going to see these types of phenomena.” [climate] Events will only become more frequent in the future. Therefore, we must take this issue seriously and invest in agricultural research and development so that we can mitigate and cope with the effects of climate change on agricultural production and farming systems,” Ortega said.
“One of the effects of this is increased costs, which translates into higher prices for consumers,” he added.
Consumers will feel the increase, but so will roasters and distributors who offer cup recommendations to consumers.
“Climate change is the biggest driver of price increases and volatility in the coffee market. It puts a lot of stress on the market. Supply is decreasing, but demand is increasing,” says World of Coffee. Vice President Jackie Newman said.
World of Coffee Inc. is a family-owned business that processes and packages green coffee beans for private label, food service, and coffee shop use.
Newman said the company’s products serve thousands of customers across the country every day.
“We’re going to be as fair as we can and cover as much of the cost as we can. Obviously, people still need their coffee in the morning,” Newman said. “But you need to make sure you account for all costs, not just the increase in coffee, but also the increase in packaging and labor costs.”
She predicts the price of coffee could rise from 50 cents to $1 within a few days.
“People are very sensitive to the price of coffee and this affects the whole chain. Farmers are affected because the supply is very low. It’s affected because there aren’t that many and the demand is high,” she said.
“Roasters are being impacted in a big way because prices are so high and there are still customers who have to fill orders. That definitely cascades down and impacts the everyday consumer.” Newman added.
“We just don’t have enough coffee.”
Similar trends are expected for other crops.
“If you look at, for example, the recent European floods that affected the Valencia region, which is a major agricultural region in Europe, it had quite a negative impact on things like oranges,” Ortega said.
“If you look back, it wasn’t that long ago, two years ago, there was a big drought in the West, like California, where a lot of our specialty crops are grown. “Even beef production was affected by that drought. And we’re feeling the impact on beef prices now,” he added.
NBC News’ Ben Trachtenberg contributed.
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