Wednesday, October 15, 2014

The Rise of Coffee Prices

Recently, you may have noticed a price increase on your favorite cup of coffee. Whether you purchase that morning Cup of Joe at Dunkin Donuts, Starbucks, or the 4th Street Cafe, you have probably experienced a hike in what you typically pay. Our most recent increase was around a year ago because we were well informed of what was on the horizon.

To give you an idea, at this time last year, we were paying $7.00/pound for our 25lb bag of roasted, whole-bean Peru, high-grown French Roast coffee. On our most recent purchase this past week, we were paying $7.50/lb for the same coffee. The experts say prices may only increase. Why, you might ask?

A drought in Brazil is one of the reasons. They are calling it the worst in 40 years. Consider that Brazil supplies a third of the world's coffee supply, and yes, we have a problem. To go along with the drought is a phenomenon called "coffee rust."  This fungal infection that attacks coffee plants has been on the rise.

A real double whammy to the coffee crops, both the drought and the fungal infection have put a damper on the current crops.  In addition, they have raised fears that the coffee bean supply for 2015/2016 could be severely damaged if things don't turn around soon.

Some of you may wonder how weather could effect coffee beans. It wasn't until I visited the Kauai Coffee Company Estate nearly 10 years ago that I really understood the vast scope of how coffee was grown. The best way to describe a coffee estate would be to compare it to the rows of grape vines you might see scattered about a winery, only in a much, much larger scope... to the tune of 3100 acres and 4 million trees.

The trees, about 5 foot tall, seem just like any other normal plant with green leaves and flower buds. I'm not quite sure what I was anticipating as we approached the estate that day, but I guess just didn't expect to see what I saw: row after row after row of coffee trees. It was quite impressive. Understanding the scope of an estate, the initial blossom, the harvest, the processing and the roasting... it's easy to understand how a fungus or drought could so drastically affect a year's - even a future year's - bean supply.

But I would venture to guess that many of you haven't noticed the price increase or have just shrugged it off. I mean, if you are a coffee lover like myself, what are we going to do.........drink tea? No thanks. I'd rather dig deeper into my pockets for a few extra quarters.

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