How to Make Money from Coffee

About a billion people drink coffee every single day. That is about one eighth of the earth’s population. In the USA the average person spends $4.11 on coffee spread out across coffee purchased at the store and prepared at home and coffee purchased at coffee shops. Millennials average $7 a day. According to the National Coffee Association, Americans spend $110 billion a year or 301 million a day on their coffee according to the National Coffee Association in an article about the economic impact of coffee.

Coffee as a Beverage Versus Coffee as Way to Make Money

Although your only interest in coffee may be the morning wake-up effect or thr taste and aroma of a fine Arabica from Colombia, one might be forgiven for thinking about ways to make money from coffee based on a couple of things. One is the sheer volume of coffee and amount of money spent on coffee. The other is the current high price of green coffee beans due to the continuing drought in Brazil, the world biggest producer year after year. The high price of green coffee beans is a boon to coffee farmers who all too often suffer in what is a feast of famine world of coffee prices. The fluctuation that has driven coffee to roughly twice its price of a couple of years ago has been profitable for many who trade coffee futures.

What Are Coffee Futures?

Futures are what is called a derivative contract. Commodities like coffee, oil, gold, or winter wheat trade of markets like the NYMEX or New York Mercantile Exchange. With a futures contract one promises to buy or sell a specific quantity of a commodity on a future date at a set price. Depending on whether the price goes up by the settlement date a futures trader may make money or lose. Coffee futures are commonly traded by coffee roasters who use the futures contract to make certain than they don’t get caught in a price squeeze at times like these when prices are so volatile. Additionally, speculators trade futures contracts purely in search of profits. Another option for futures traders is to trade options on futures contracts. This is done to limit risk as well as to seek profit. These can be ways to make money on coffee without being in the coffee business.

Growing Coffee

When we think about the coffee business we typically think of the coffee farmer. Coffee is grown in a wide band around the equator where the weather allows for growing coffee plants that are perennial and do not tolerate a frost. The only place in the USA where coffee is grown is in Hawaii. Coffee farming tends to run in families just like farming in the USA where corn wheat and soybeans are major crops. Kids grow up working on the family farm and learn their trade from the ground up, so to speak. Thus if you want to make money growing coffee as a coffee farmer you had best have a strong background or be willing to pay someone to do all of the work for you and be certain to take the time to learn what is important and keep a close check on the books.

Coffee Farming Risks

A perfectly run coffee farm can lose money due to the weather, like the drought in Brazil right now, or in a banner year when supply is plentiful and the price of green coffee beans falls below production costs. The sad story of coffee growing in many parts of the world is that hard working farmers lose their farms due to successive bad low price years. The unreliability of coffee prices is only one more issue stacked on top of coffee plant diseases like leaf rust that can wipe out whole farms.

Coffee Roasting Businesses

If you like to roast coffee you might think about doing it as a business. It is scalable, which means that you can start small and learn the trade and then expand with your market. The typical profit margin in the roasting business is about 35% which makes it much more protected from green coffee price swings than coffee farming. Plus, you can do coffee roasting in places like Alaska as opposed to having move to the Colombian coffee growing axis and learn Spanish along with all of the details of coffee farming.

Aside from making good roasted coffee, one will need to learn how sell or place their product where it sells which means working with retailers of doing a direct mail business. These things take time and effort but entail less risk then with coffee farming or trading futures contracts.

Starting a Coffee Shop to Make Money From Coffee

Coffee shops average a fifteen percent margin over cost of operation. They are labor intensive and require that you are able to provide good service and keep customers happy. The price of coffee beans is not so important as hiring, training, and managing your staff, supplies and costs.

As the graph shows, the market price of green coffee beans has fluctuated between $2.50 a pound and $4.30 a pound between September of 2024 and August of 2025.

Savvy futures trades who purchased options at the September 2024 price and sold at the peak in February of 2025 experienced tidy profits.


Why Is Coffee the Best Source of Antioxidants?

It is a good idea to consume lots of foods with high antioxidant levels. What antioxidants are good for is protecting the human body from free radicals. Free radicals are molecules that are unstable and, as a result, cause damage to cells this is called oxidative stress.. This damage over time contributes to a whole host of health problems. When we consume antioxidants they neutralize free radicals and reduce oxidative stress. In turn lower oxidative stress typically lowers risks of various health problem including several types of cancer, heart disease and even Alzheimer’s disease.

What Are the Foods With the Highest Antioxidant Content?

Here are foods with high antioxidant content

  • Sumac bran
  • Dried Indian gooseberries
  • Oregano spice
  • Rosemary spice
  • Dried peppermint
  • Thyme spice
  • Boabab fruit powder
  • Cinnamon
  • Tumeric
  • Vanilla bean
  • Sage spice
  • Szechuan pepper spice
  • Acai powder
  • Black sorgum
  • Allspice
  • Rose hips
  • Majoram spice
  • Sumac grain
  • Red sorgum bran
  • Nutmeg
  • Basil spice
  • Cocoa powder
  • Camu camu powder
  • Small red beans
  • Blueberries domestic and wild
  • ´Pecans
  • Dark chocolate
  • Arabica coffee beans

It turns out that coffee does not have the highest antioxidant content. So, why is it on our list? The problem with trying to get adequate amounts of antioxidants from all of spices that we list is we use small amounts for seasoning. Some of the other foods are not common to the American diet and may be hard to obtain.

Although Arabica coffee does not have the level of antioxidants per gram that many of the top-listed items do, we drink an awful lot of coffee. In fact, a good estimate that a coffee drinker can easily get half of the antioxidants that they need simply from enjoying their daily Arabica coffee. As a public health issue, because Americans drink so much coffee, it provides a greater health benefit to more people than many of the items that you would need to intentionally added to your diet and get used to.

Arabica versus Robusta Coffee and Antioxidants

We generally prefer Arabica coffee over Robusta because Arabica tastes better. However, if you want a greater antioxidant content, as well as more caffeine, Robusta has higher levels of antioxidants in green beans and it maintains its lead over Arabica after roasting as well Robusta has particularly high chlorogenic acids. The levels of antioxidants vary according to growing conditions, so levels may change from farm to farm and from year to year.

How Much Coffee Should You Drink for Optimal Antioxidant Intake and When Should You Drink It?

There is no long-term data about the amounts of antioxidants consumed from coffee and health results. However, there is good data relating to how much coffee we drink over the years and health results. As the rule the more cups of coffee you drink each day the more the benefits, up to about 5 cups a day. It turns out that when you drink your coffee makes a difference. Morning coffee drinkers have better results including lower incidence of various cancers and lower risk of premature death. So, enjoy your coffee, especially with breakfast and enjoy your healthy life, thanks to all of those antioxidants!

Is Decaf Coffee Good or Bad for You?

Research over the years has repeatedly confirmed that drinking coffee results in a whole host of health benefits from reduced incidence of type II diabetes to Parkinson’s Disease to Alzheimer’s to various types of cancer. Coffee drinkers generally live longer. Although many people just drink coffee for the stimulant effect of the caffeine, it is not the caffeine in coffee that conveys the bulk of the health benefits. Rather it is the high concentration of antioxidants in coffee that make the difference.

Does Decaf Coffee Have Health Benefits?

Since caffeine is not the source of health benefits from coffee, one would not expect that removing it would not make a difference in health outcomes aside from reducing higher blood pressure, gastritis, and jitteriness, which are reasons that people opt for decaf in the first place. In fact, research shows that it makes no difference if you drink regular or decaf in terms of long term health outcomes. The antioxidants appear to be doing their job either way.

Are There Concerns About Drinking Decaf?

In order to remove caffeine from coffee, solvents are typically used. These are also removed as part of the process. Nevertheless, such impurities raise concerns with some coffee drinkers. Thankfully, the amount of solvent that remains after the decaf process if extremely small. Regulatory bodies like the US Food and Drug Administration have very low allowable limits in the range of ten parts per million. In Australia the allowable level is two parts per million. There has never been any evidence of harm to human health from levels so low.

Should You Drink Decaf Instead of Regular Coffee?

Your choice of decaf versus regular coffee is a matter of personal choice. If you are drinking coffee solely to wake up or stay awake, you need to stick with regular coffee. If you get gastritis, esophageal reflux, jitteriness, or elevated blood pressure from drinking coffee you will want to cut back on regular coffee or switch to decaf to reduce you caffeine intake, as caffeine in the reason for your unwanted side effects.

If You Are Still Worried About Solvents in Your Decaf Coffee Consider the Swiss Water Process

There is a decaf process that does not use solvents. It is the Swiss Water Process. This methods requires only time, temperature and water to accomplish removal of caffeine from coffee. This method preserves the purity of organic coffee as well as its original flavor profile. It starts with a green coffee (liquid) extract. Green beans are soaked in hot water and the liquid is passed over activated charcoal to remove the caffeine. This process results in the removal of 99.9% of the caffeine in a given batch of green coffee. Fortunately, this process does not remove any of the healthy antioxidants that provide long term health benefits!

How Dangerous Are the Side Effects of Drinking Regular Coffee?

As a rule, the jitteriness and heartburn come from drinking regular coffee, are temporary and not dangerous. The one clear exception is high blood pressure. If you start out with hypertension that is bad enough to require treatment evidence shows that drinking two or more cups of regular coffee each day will double your risk of dying from cardiovascular disease. This risk goes away if you drink a cup a day or less.

Drought in Brazil and Historic Coffee Prices

The price of unroasted coffee beans has running at historically high levels. This has not affected your own cup of coffee so much because of the usually high markup due to roasting, as well as profits for retail outlets and coffee houses. On the other hand it has been a boon for coffee growers in countries like Colombia, Honduras, Costa Rica, Mexico and the like where growing conditions are normal.

A severe drought in Brazil, the world’s largest coffee producer, is significantly impacting coffee prices globally. Reduced rainfall and extreme heat in key coffee-growing regions like Minas Gerais and São Paulo have led to lower crop yields, decreasing supply and driving up prices. This has caused a notable increase in green coffee bean prices and is now affecting roasters, retailers, and ultimately, consumers, with higher prices at cafes and supermarkets.

How Long Will the Drought and High Prices Last?

Drought in Brazil
Drought in Brazil

Current price and climate conditions have been issues for about a year, since mid-2024. As we have previously written, longer term concerns exists due to likely temperature increases over the coming years. The current situation started out as part of the El Niño, La Niña cycle of Pacific Ocean currents along the West Coast of South America but seem to turning into one of the cycles of longer duration.

Brazil and the Global Coffee Supply Chain

Brazil has historically been the world’s leading coffee producer and exporter by volume. It is the largest Latin American country and has a long history of coffee growing. Vietnam in recent years has also become a major coffee producer, occasionally matching Brazil in exports albeit with Robusta coffee beans and not Arabica. Thus, when Brazil’s coffee production suffers it has a significant effect on total coffee availability, both Arabica and Robusta. While Colombia is a major coffee producer of almost exclusively Arabica beans it never has the same magnitude of effect on coffee prices as Brazil does. The same applies to producers like Honduras, Costa Rica, Ecuador, and Peru. Although Vietnam has had climate issues as well, coffee production throughout the Indonesian archipelago has not suffered. Thus coffee growers there, as well as in countries like Colombia are having a prosperous year with normal production and historically high prices as the supply chain has adjusted it price to account for less overall coffee volume being available in 2025.

What Can Brazil Do to Deal with Its Drought?

ng term options for coffee growers in Brazil include irrigation. However, this is generally only a viable solution for large operations with lots of cash and lots of credit. It is likely not a viable option for small coffee farmers who are being forced to simply “weather the storm.” It remains to be seen how many small, family coffee farms may go out of business should the drought and supply chain disruption persist for another year or two.

How Will Brazil’s Drought Affect Your Coffee?

The price of unroasted coffee beans has running at historically high levels. This has not affected your own cup of coffee so much because of the usually high markup due to roasting, as well as profits for retail outlets and coffee houses. On the other hand it has been a boon for coffee growers in countries like Colombia, Honduras, Costa Rica, Mexico and the like where growing conditions are normal.

A severe drought in Brazil, the world’s largest coffee producer, is significantly impacting coffee prices globally. Reduced rainfall and extreme heat in key coffee-growing regions like Minas Gerais and São Paulo have led to lower crop yields, decreasing supply and driving up prices. This has caused a notable increase in green coffee bean prices and is now affecting roasters, retailers, and ultimately, consumers, with higher prices at cafes and supermarkets.

How Long Will the Drought and High Prices Last?

Current price and climate conditions have been issues for about a year, since mid-2024. As we have previously written, longer term concerns exists due to likely temperature increases over the coming years. The current situation started out as part of the El Niño, La Niña cycle of Pacific Ocean currents along the West Coast of South America but seem to turning into one of the cycles of longer duration.

Brazil and the Global Coffee Supply Chain

Brazil has historically been the world’s leading coffee producer and exporter by volume. It is the largest Latin American country and has a long history of coffee growing. Vietnam in recent years has also become a major coffee producer, occasionally matching Brazil in exports albeit with Robusta coffee beans and not Arabica. Thus, when Brazil’s coffee production suffers it has a significant effect on total coffee availability, both Arabica and Robusta. While Colombia is a major coffee producer of almost exclusively Arabica beans it never has the same magnitude of effect on coffee prices as Brazil does. The same applies to producers like Honduras, Costa Rica, Ecuador, and Peru. Although Vietnam has had climate issues as well, coffee production throughout the Indonesian archipelago has not suffered. Thus coffee growers there, as well as in countries like Colombia are having a prosperous year with normal production and historically high prices as the supply chain has adjusted it price to account for less overall coffee volume being available in 2025.

What Can Brazil Do to Deal with Its Drought?

ng term options for coffee growers in Brazil include irrigation. However, this is generally only a viable solution for large operations with lots of cash and lots of credit. It is likely not a viable option for small coffee farmers who are being forced to simply “weather the storm.” It remains to be seen how many small, family coffee farms may go out of business should the drought and supply chain disruption persist for another year or two.

How Will Brazil’s Drought Affect Your Coffee?

The price of high quality Arabica coffee beans will likely remain historically high until Brazil’s drought lets up. In addition we are likely to see more mixing of Robusta with Arabica which will reduce coffee quality for those unwilling to pay “premium” prices.

Welcome to the world off coffee as climate issues directly affect supply, price and quality.

If you want to keep drinking the best coffee, we suggest as always the you buy coffee from Colombia.

Best Coffee Treats

About a billion of us worldwide drink coffee. But sometimes we are not so much interested in brewing up a cup of java. Rather we would like a treat with the taste of coffee. Coffee treats range from coffee flavored candy to coffee added to a great variety of cooked items. By in large the best coffee treats come from the best coffee and by in large the reliably best coffee time after time comes from Colombia. A great source of coffee and coffee treats from the coffee heartland of Colombia comes from Café Quindío. These folks offer great coffee and great coffee treats every time direct from Colombia.

Café Quindío

Cafe Quindío S.A.S. is a coffee roaster founded in 1991 with three employees in Armenia, Quindío, Colombia. Over the years the company has grown to include a full scale roasting operation in Armenia and forty-two coffee shops located across Colombia. In addition to its Colombian outlets Café Quindío has a US outlet located in Florida whose online address is https://www.cafequindiousa.com/. For coffee and coffee treat lovers in the USA this is a great source of coffee products.

Best Coffee Treats

Coffee Treats

Outstanding coffee treats offered by Café Quindío include merenguitos, coffee caramels, and coffee cookies, both with and without sugar. For those unfamiliar with merenguitos, these are Cuban meringue cookies made with sugar and egg whites baked at low temperature to come out crispy and light. Other types of common coffee treats include roasted whole coffee beans covered with chocolate, hard candy infused with coffee, toffee with coffee added, and coffee gummies.

Are Coffee Treats Good for You?

We have known for years that coffee is good for us. It reduces the likelihood of getting type II diabetes, various forms of cancer, heart disease, stokes, Parkinson’s disease, Alzheimer’s disease, and more. We also know that a lot of coffee drinks contain sugar, cholesterol, and other items that may work against the beneficial effects of a cup of black coffee. Such is the case with coffee treats. For example, the maximum benefit of diabetes reduction with coffee is about 33% when one drinks six cups a day. If you are getting obese because of high sugar intake, you are working against the beneficial effects of your coffee. In such a case you would do better drinking black coffee and skipping the treats. Having said that, coffee treats in moderation are tasty and coffee is good for you in many ways.

Easy Coffee Merengue Recipe

If you like to bake at home you do not necessarily need to buy your coffee treats but rather can make them yourself. An easy coffee merengue recipe includes egg whites, sugar, vanilla, and espresso powder. Beat the egg whites at progressively faster speeds until peaks form. Then fold in sugar until it is dissolved, the mix is shiny, and peaks are very hard. At this point you should be able to turn the mixing bowl on its side or even upside down and not have any dripping. Then fold in vanilla and espresso powder to taste. You can either beat more until you have a uniform color or you can just beat until it has a swirly appearance. Then lay out waxed paper and cover with dollops of the merengue mix. This works best on a cold and dry winter day and can be a bit troublesome in a hot and humid climate. The taste will be the same but light and crispy can be a challenge when the air is humid and hot.

Impact of Starbucks Strike

Impact of Starbucks Strike

Workers at Starbucks outlets in Seattle, Chicago, and New York went on strike with just a few days left until Christmas 2025. Starbucks has offered a 1.5% raise which workers say does not even keep up with inflation. How will the Starbucks strike affect your morning latte, and will it affect the price of your coffee going forward? It occurs to us that the folks most responsible for getting you a good cup of coffee are the ones who are paid the least. Coffee farmers and the folks who brew your Java are at opposite ends of the coffee supply chain and get the least while the “middlemen” always seem to get a healthier cut!

Starbucks Strike

According to CBS News workers at more than 500 Starbucks outlets have voted to unionize, are in negotiations with Starbucks, are unhappy with Starbucks’ contract offers and are striking. It should be noted that Starbucks has more than 10,000 outlets in the USA. Thus only five percent of Starbucks stores are involved in the strike. Issues include unfair labor practices and failure to come to an agreement in 2024 as promised by the company. The biggest issue, however, is the paltry wage increase being offered by the company at a time when wagers are rising across virtually all industries and the economy is humming along in good shape. Meanwhile the Starbucks CEO is expected to make $100 million in 2024! The company notes that they already pay an average of $18 an hour and that benefits include paid family leave, free college tuition, and health care. They contend that total benefits average $30 a hour for a barista who works at least 20 hours a week.

Impact of Starbucks Strike

Working at Starbucks

The average income for a Starbucks barista is $25,000 a year and Starbucks pays a fourth of its yearly revenue in salaries. As a point of comparison the average worker in the USA makes $68,000 a year. However, the average Starbucks worker is 23 or 24 years old. The average weekly income in this age group is $757 which comes to $37,850 for a fifty week working year. The point is that Starbucks workers not only make less than the national average but also make less than the average for the age group of their workers. Another point of comparison is that entry level restaurant workers average $29,000 a year and the average salary is $39,000. Those who have the most experience can make closer to $70,000 a year.

Work Experience at Starbucks vs Starbucks Business Prospects

Despite the fact that some Starbucks stores are unionized and are on strike, as a rule Starbucks workers give the job a high rating for job satisfaction. Part of this is the fact that the benefits are considered good. Job satisfaction at Starbucks ranks in the top 20% of companies of similar size. Looking at the company point of view, Starbucks has issues that it needs to deal with. One of these we wrote about, which is the huge number of drink options for a company that sells coffee. Waits can be long, which leads to unhappy customers. The company has spent a lot of time and effort on its management team but seems to have overlooked the folks who make the daily business work, the baristas. In the end we expect to see more Starbucks stores unionize and more strikes!

How Good Is Dunkin Donuts Coffee?

How Good Is Dunkin Donuts Coffee?

People who want a great cup of coffee commonly go to their local coffee shop. Folks in places in Manhattan, San Francisco, or Seattle may go to their local “third wave” coffee shot where they know the precise location where their coffee was grown down to the coffee farm. If you go to a Starbucks you are going to be deluged with choices. If you go to a “third wave” coffee shop you may end up paying an exorbitant price for a unique coffee that is not more enjoyable or satisfying that you could brew at home. Many folks find that they can get a reliably excellent cup of coffee where they pick up their donuts, namely at Dunkin Donuts. How good is Dunkin Donuts coffee?

A Good Cup of Coffee or Just Showing Off?

Years ago this author came to a decision regarding the purchase of a bottle of wine. The prices involved will indicate how many years ago it was and the economic circumstances of the writer at the time. My basic price for a bottle of wine was $5 but sometimes I would splurge on a $10 bottle because I could tell the difference between the two and felt that the extra price was worth it. However, when I tried a $20 bottle of wine I discovered that I did not appreciate a similar increase I quality as I doubled the purchase price. In other words, the move up to better grapes for a $10 bottle of wine was worth the price. The move up to a $20 bottle of wine was just showing off for my friends and dinner guests.

My point is that the same reasoning can be applied to a reliably good cup of coffee at a good price. Starbucks generally has great coffee and your local “third wave” coffee shop may have even better coffee. But is the uptick in quality worth the uptick in price and the fuss and bother of choosing from hundreds or even thousands of options? If you want to get a reliably good cup of coffee at a good price, consider getting your coffee at the same place that you pick up a donut or a dozen, Dunkin Donuts.

How Good Is Dunkin Donuts Coffee?

Dunkin Donuts Coffee

Dunkin Donuts serves high quality Arabica coffee. It does not serve just black coffee. It also does not have thousands of options. Think of their coffee menu as a trimmed down list of traditional coffee shop options. An advantage of this approach is that their staff is not overwhelmed by requests for endless variations of flavored coffees. Another is that they can focus on making basic and great coffee every time. Part of this approach comes from the fact that they are not a chain of coffee shops but rather sell donuts, bagels, muffins, breakfast sandwiches, wraps and snacks. By limiting their coffee menu they can focus on the food that they sell and use their good coffee as simply an additional selling point.

Cenicafé and Coffee from Colombia

Colombia grows great coffee. Its production is virtually all arabica coffee. Colombian coffee commands a price generally higher than the world coffee market price because of its quality. This great quality comes from coffee being grown in rich volcanic soil by families that have been in the coffee farming business for generations. However, Colombians have had to overcome various threats to their coffee business including the arrival of coffee leaf rust and the destruction of significant portions of their coffee crop. The Colombian institution that has repeatedly come to the rescue of Colombian coffee production in the face of plant diseases and pests is Cenicafé, the Colombian National Coffee Research Center. Cenicafé also works with coffee farmers to promote sustainable coffee farming, natural resource preservation, and continued production of great coffee in the face of a changing climate.

Colombia and Coffee by Cenicafé

Cenicafe and New Colombian Coffees

A major threat to coffee production everywhere is coffee leaf rust, Hemileia vastratrix. This fungal disease first affected coffee crops in the East Indies and around the Indian Ocean in the middle of the 19th century. It was a big reason why growers in places like Ceylon (Sri Lanka) switched to tea and the English came to drink tea instead of coffee. The disease spread across Africa to the Atlantic coast by the 1950s and reached Brazil in 1971. It reached Colombia in 1983 and caused as much as 30% crop loss by the 21st century.

Cenicafé, which was founded in 1938, took up the task of protecting Colombian coffee production from coffee leaf rust even before the plant disease arrived in Colombia. The most recent leaf rust resistant arabica coffee developed by Cenicafe is Cenicafe1 which is a cross between the Caturra variety and a leaf rust resistant strain from the East Indies on the island of Timor. The strain is also resistant to coffee berry disease.

Previous varieties developed by Cenicafé include Castillo, Colombia, and Tabi. Castillo is a cross between a Timor hybrid and Caturra which is a rust resistant mutation from Brazil. Likewise Colombia is a cross between Caturra and a Timor hybrid. Tabi was developed by crossing a Timor hybrid with Bourbon and Typica. Each of these has qualities making it the best choice for specific areas and altitudes in Colombia.

Where Is Cenicafé?

While the main Cenicafe facility is in Chinchiná, Caldas, they have eight research stations scattered throughout the Colombian coffee producing region. These stations can be found throughout the three parallel mountain ranges that comprise the Andes as they pass through Colombia and include a variety of microclimates.

Who Buys Colombian Cenicafé Coffee?

The biggest buyer of Colombian coffee by far is the USA at about 29 kilotons a year. The next step down is Germany followed by Canada, Japan, and Belgium each in the 50 kiloton to 55 kiloton range. The total sum of exports to all other nations comes to about 200 kilotons. The biggest individual coffee exporter from Colombia is the Federación Nacional de Cafeteros de Colombia or Colombian National Coffee Growers Federation which is the parent organization of Cenicafé.

Brazil Drought Drives Price of Coffee Up

Brazil is having its worst drought in seven decades. The result for the coffee market is less and higher priced coffee. In late November of 2024 the NYMEX coffee price topped $3.30 a pound, up from $2.50 in October and $1.40 in October of 2023! Although the price of coffee has more than doubled that does not mean that there is less than half as much coffee available. Rather it means that the market is bidding up the price to make sure that individual buyers get as much coffee as they want. This situation is bad news for coffee farmers in Brazil but good news for coffee growers in Central America, Mexico, Hawaii, and parts of South America not affected by the drought.

Pacific Weather Patterns and the Climate in the Americas

The weather has turned dry in large parts of Brazil due to La Niña. La Niña is the opposite Pacific Ocean weather pattern from El Niño. Cold water rises to the surface along the west coast of South America. This happens because strong equatorial winds drive warm air and water west across the Pacific Ocean towards Indonesia. El Niño and La Niña do not limit their climatic effects to the Pacific Ocean, however. North Americans are familiar with the torrential rains across the western US states and storms across the Midwest with El Niño. That part of the oscillating pattern that concerns us in this instance is that La Niña causes much less rain in the coffee producing regions of Brazil and much more rain across the Amazon regions of Colombia and Venezuela. However, while rainfall can be plentiful in the Colombian Cafetero, it generally helps produce good harvests as it is typically not so excessive.

Where Is Coffee Coming From?

Brazil and Vietnam are still the leading coffee producers despite drought conditions in both nations. However, coffee production in both nations could well be off by twenty-five to thirty percent in each case.. In an average year Brazil produces about 39% of the world’s coffee and Vietnam produces about 17%. The next leading producer is Colombia with 7%. If there is a 30% reduction in production from Brazil and Vietnam that means 57% x 30% = 16.8% less coffee produced in a given year. That is what is driving the price of coffee to levels not seen in fifty years. The previous highest coffee price was in 1976 at $3.13 a pound, which gives us an idea of how unusual this situation is.

How Long Will the Price of Coffee Stay This High?

The current high price of coffee has to do with the current relative scarcity compared to market demand. Until climate conditions improve in Brazil and Vietnam and another harvest ensues, we can expect to see the market price of a pound of coffee to stay historically high. How much this will affect the price of your cup of coffee is a different matter. What the coffee farmer receives for a pound of green coffee beans is a small fraction of what we pay for a espresso, latte, or cappuccino at our local coffee shop or what we pay for a bag of whole bean roasted coffee at the grocery store. As such, we may see a few percent increase at the consumer level but nothing like the doubling of price for bags of coffee fresh from the harvest.

Brazil Drought Drives Price of Coffee Up

Coffee Price Chart Courtesy of Business Insider

Will Tariffs Raise the Price of Your Coffee?

In the runup to the 2024 US presidential election one of the topics repeated over and over was that of tariffs on things imported into the USA. Trump talked about putting tariffs on virtually everything and Harris supported selective tariffs to protect American industry and national security. Where does coffee fall in this argument? Is it possible that the US will someday put high tariffs on all foreign coffee? If so, how much will tariffs raise the price of your coffee?

How Much Does the Cost of Green Coffee Beans Contribute to a Cup of Coffee?

As a rule, about one percent of a $4.00 cup of regular black coffee or $.0.01 goes back to the coffee grower. Coffee coops and large exporters earn more than coffee farmers do. Shippers earn more than coffee farmers do and distributors within destination countries make more than coffee farmers do. Since the vast majority of coffee that people buy is roasted from the store, coffee roasters make far and away more than other folks before them in the supply chain. When you get your coffee from a fancy coffee shop, their markup is also substantial as they receive green coffee beans and roast them before brewing your coffee.

Will Tariffs Raise the Price of Your Coffee?

How Much Are Current Tariffs on Coffee?

Current tariffs, at least before the next administration takes over, are such that imported green coffee pays no tariffs. Nor do roasted coffee beans, decaffeinated coffee, ground roasted coffee, or extracts and concentrates of coffee. However, roasted coffee with sauces or syrups added is subject to tariffs as is instant coffee. All coffee imports pay harbor maintenance fees and merchandise processing fees at the point of entry. If you buy coffee while on vacation and bring it back to the USA there is no tax but you do need to declare it.

Why Would Anyone Put Tariffs on Coffee?

For many years small countries all across the globe have put substantial tariffs on American cigarettes. The tariffs are paid upon entry and simply add to the cost of the cigarettes for the consumer. This is a very effective way to tax people without seeming to be levying a tax. The argument made against Trump’s desire to tax all imports from everywhere was that this was simply a poll tax that fell more heavily on the poor than the rich. Like the taxes on cigarettes in many countries such taxes would not be seen as taxes by consumers but rather as price gouging by merchants everywhere in the USA thus sparing the ruling party the pain of a consumer backlash.

A common reason prior to the Trump era for putting tariffs on things has always been to protect American producers. Many Asian countries have been guilty of currency manipulation as well as subsidies to their industries. This has made them able to undercut American prices. When an American industry has sufficient clout they can often get Congress and the President to enact tariffs on competitors even when the result is excess profits for the industry and not really protection against unfair competition.

How Politically Connected Are Hawaiian Coffee Producers?

The only coffee grown in the USA comes from Hawaii. Hawaii produces less than one percent of the world’s coffee. Hawaiian coffee is popular and expensive. Because of its high quality and fame, Kona coffee has substantial pricing power. And nobody else gets to (legally) sell “Kona” coffee but the folks in Hawaii. Because Kona producers can charge pretty much what they want and are selling all of their production it is unlikely that they are going to ask the government to put tariffs on all foreign producers.

What Would a Twenty Percent Tariff on Imported Coffee Raise for the Government?

The US is the biggest coffee importer in the world at $8.3 billion in 2023. Coffee from Colombia and Brazil was the biggest part of all imports. A twenty percent tariff would raise $1.66 billion revenue. The total price paid at coffee shops for coffee in the USA in 2023 was $48 billion. the total price for packaged coffee including instant coffee was more than $90 billion in 2023. If you tally up total retail sales it comes to about $140 billion a year. If tariffs on coffee imports were simply passed on to the consumer they would only raise the final coffee shop or grocery store price by about four-tenths of a percent. If, however, grocers and coffee shops chose to use tariffs as an excuse to raise prices it could be more!