Due to production challenges in key coffee growing regions around the globe and surging demand, U.S. consumers are paying more for their daily coffees. Imported coffee prices have risen 65% since January 2021, and coffee grounds have risen 20% since April 2023.
According to a new research from CoBank’s Knowledge Exchange, higher coffee prices are likely to continue for the foreseeable future while production recovers and supply catches up to demand. In the meantime, higher prices may drive U.S. consumers to forego frequent visits to their local barista in favor of boosting their at-home coffee experience.
“Following the pandemic when restaurants were closed, people have gained some experience trying to replicate their favorite dining-out experiences at home,” said Billy Roberts, senior food and beverage economist for CoBank. “It wouldn’t be surprising if, due to sharply higher coffee prices, some consumers turn to recreating their favorite coffee or espresso drinks at home with store-bought flavorings or inclusions.”
According to the study, the supply shortages and increased consumption globally has led to unprecedented volatility in coffee prices. U.S. Bureau of Labor Statistics data find prices for U.S. imports of coffee fell 2.6% from May 2022 to May 2023. Yet, even with the drop, U.S. prices remained substantially ahead of their 2021 levels: 57% higher in May 2023 than in May 2021. High U.S. import coffee prices have persisted and are only slightly behind the record-high price seen in 2022. Global crop concerns have pushed up prices of both arabica and robusta (the two major types of coffee Americans consume), and the resulting rise in coffee prices is now being felt by U.S. consumers. The largest coffee segment by far, ground coffee, currently averages $8.39 per pound, 20.5% more than in April 2023 ($6.55). Ground decaffeinated is 17.2% more per unit; in fact, the only coffee segment dodging major price hikes is coffee concentrate.
“Nearly all of the coffee consumed in the U.S. is imported, so higher prices are likely until the production challenges subside,” said Roberts. “While it’s highly unlikely U.S. consumers are going to significantly curb their consumption due to high prices, they may get creative with at home coffee drinks and lean on store-bought flavorings to replace more expensive specialty drinks from coffee shops.”
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