global coffee pricing
UPDATE 4/9:
As you know by now, the tariffs levied by the current administration is going to affect the price of nearly everything in our lives, including coffee. Every coffee producing country that we purchase from has at least a 10% tariff being applied to exports and some as high as 32%. We’re working closely with our importers to manage the instability with what little information is being shared. What we are NOT doing is immediately raising prices as a reaction, but rather planning for coffees coming in and how they will affect pricing in the future. Even though the tariff’s may not be implemented long term, any coffee with the tariff levied on it will be affected by that extra fee for the life cycle of that coffee and will unfortunately be more expensive. We’ll constantly monitor our contracts and current events to mitigate this long term and will communicate as we have the information. This has been one of the hardest weeks of conversations with our producing partners because the affects of these actions magnify greatly back down the supply chain and we are at peak purchasing season for many of our biggest purchases. Thanks for understanding and rest assured knowing that we’re working to utilize your dollar to do as much long-term good as possible. We’re all in this together.
UPDATE 3/7:
The US coffee commodity market is experiencing a notable surge, with prices reaching their highest levels in decades. This spike is driven by a mix of factors such as supply constraints, shifts in global production patterns due to climate change, and evolving consumer demand. The current environment is prompting industry participants to monitor the market closely, as these elevated prices will influence both retail costs and the broader dynamics of coffee trade.
Coffee Pricing Chart
The supply issues from the 2007-2008 harvest season can be seen in the ‘10-’12 pricing crisis. This year’s pricing crisis, unfortunately, won’t be a single year issue and is roughly 40% higher than the crisis of ‘10-’12.
In a separate, but related development, potential tariffs are looming over trade relationships between the United States, Canada, and Mexico. These proposed tariffs could impact cross-border transactions and have implications for industries reliant on goods imported from these neighboring countries. While discussions around these tariffs continue, we must keep an eye on updates and consider adjustments in trade practices independent of current commodity trends.
There is also a possibility that, if implemented, the tariffs could indirectly affect coffee prices. Although the rising coffee costs are primarily driven by supply and demand factors, tariffs will add further pressure on coffee-related imports. For instance, if tariffs extend to coffees grown in Mexico or decaffeinated in Canada, coffee roasters and distributors will face increased expenses that will eventually be passed along to consumers. Tariffs directly affect costs of coffee we purchase, but we are working to mitigate the sticker shock that will, undoubtedly, affect every aspect of our lives.
As a small independent coffee roaster, we are a drop in the bucket of these international trade winds. But we wanted to share that we are paying attention to these issues affecting pricing in the coffee industry, and we’re always actively working to uphold our commitments to producing partners and to deliver the value our customers find in our coffee. In the midst of volatility and uncertainty, consistent relationships and a strong community are vital for small businesses like Deeper Roots Coffee, and we are so grateful for your support.