Climate effects can increase the prevalence of coffee crop disease and reduce the overall yield of farmers. Research shows that Arabica beans, which make up about 60% of all globally produced coffee, are particularly vulnerable to climate change. And while American coffee producers such as Hawaii, Puerto Rico and California sell their homemade beans, their production is not enough to meet domestic demand.
“As the long-term climate changes, these weather conditions are much more likely to result in losses in coffee yields as well as coffee production volatility,” says the Sustainable Economist at Columbia University. One Jeffrey Sachs said:
Bank of America analysts expect retail coffee prices to rise in a “notable” way in the first quarter of this year. They hope that major food companies like JM Smucker, which sells coffee under multiple brands, including Folgers, and Keurig Dr Pepper, which sells Lavazza Coffee, will at least increase some costs to consumers. .
Neither company responded to requests for comment.
So far, rising coffee prices in the commodity market have not fully penetrated consumer mugs. Federal data released Wednesday shows that prices paid for coffee in all forms remained flat, up 3.1% last month from 12 months ago. However, instant coffee prices have risen, up 7.1% since last month and 4.4% from December to January.
According to market researchers at NIQ, the overall cost of drip coffee has risen since 2021, when it was $0.12 per cup. They estimated that a cup of drip coffee would cost $0.18 earlier this year, but coffee pods like those that jumped into the Keurig machine were also expensive. They too have steadily risen from $0.50 per cup in 2021 to $0.55 at the start of 2025.
Major roasters such as Starbucks are trying to reassure investors about their strategies to handle global price spikes. “The impact of coffee prices on a year-over-year basis was minimal,” Starbucks CFO Rachel Laggeri told shareholders recently.
Sachs said it expects coffee prices to remain high in the coming months. He said that climate change is likely to be a major blow to global food supply over the next decade. The world must cut greenhouse gas emissions much faster to reduce these accelerated risks and strengthen investment in agricultural resilience systems, he and other climate researchers warn It’s doing it.
According to data from Intercontinental Exchange, the global coffee shortage has resulted in the lowest import of Coffee Bean Supplies since November and since November. According to the Brazilian Ministry of Agriculture, Arabica coffee production in Brazil is expected to fall by 12.4% from last year. If its production forecasts prove accurate, it would be the lowest level since 2022, ING analysts said last week.