You'll Soon Be Paying More for A Cup of Coffee in South Dakota

For those of us who simply cannot face our mornings, afternoons, and sometimes, even evenings without the heady aroma and taste of coffee, the news that there is a looming shortage fills us with the kind of anxiety one feels when you lose a good friend!

It already seems that coffee prices and the cost of just about everything else have risen dramatically over the last 12 months. But is the cause of a rumored coffee shortage related to the pandemic?

Yes, and no. There is a drought in Brazil. Brazil is a major producer of Arabica beans which get roasted in many ways and end up in your cup in many forms; lattes, mochaccinos & more. In fact, a Business Insider article quoted a commodities expert saying that some Brazilian coffee bean producers will have a 100% loss this year.

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The other issue is a shortage of shipping containers which is causing delays and backups at shipping ports. According to The Edge Markets,

The shortage of containers is due to the rebound in economic activities in China, as well as the peak period demand for goods in the US and European markets owing to the Christmas and New Year holidays."- -Edge Markets

So even in countries with beans readily available for shipping (Guatemala, El Salvador, Columbia), there are no containers to ship their products in, and compounding these problems are labor shortages.

For now, many merchants are trying to hold the line on price increases as they work to lure customers back to cafes and restaurants. There’s steady growth in coffee, though the out-of-home segment could take two to three years to return to pre-Covid levels, according to David Rennie, head of Nestle SA’s coffee brands."- -Bloomberg

So your "cuppa joe" may be the same price this week as it was last, but next week or next month- - who knows?

Sources: Bloomberg, Business Insider, and The Edge Markets