The Facts Behind The Rising Wholesale Costs of Coffee

 

Nobody likes to hear that one of your favorites beverages of all time is going through some growing pains. But… fear not; the Java Geniuses are here to seperate fact from fiction.

As more information emerges on the status of coffee crops from major harvesting countries such as Vietnam, Indonesia, Columbia, Mexico, and many others in Central and South America, the more we know about the future of coffee prices for 2014. News media outlets have been following the increasingly popular topic of “Coffee Prices on the Rise”, and report that in 2014 to date coffee has been the top commodity in terms of amplified price. Totaling an increase of 95% this year, the price of coffee “C” market futures is among the highest in 2014.

According to recent reports from these countries, crop yields are on the decline due a couple of reasons:

Mother Nature

Drought – In Brazil (the world’s largest coffee producer) harvest was reduced from 44 million bags to 40-43 million bags due to the worst drought they have seen in decades. The cost of the most popular variety of bean – the Arabica bean – has risen dramatically by 20%, the highest it has been in several years.

Typhoon – Indonesia was affected by Typhoon Haiphon, diminishing their crop yields by 15-16%. Seeing as Indonesia is the number three biggest producer of coffee in the world, this decrease in production alone foreshadows higher coffee prices for the consumer this year.

Fungus – In Central America and Mexico, crop yields continue to decline 15-20% due to Coffee Rust Fungus (Roya) across the region.

Conversely, Columbia and Vietnam remain steady with their crop yields at 11 million bags and 27 million bags, respectively. Overall, the result of the ongoing weather conditions, as well as the Coffee Rust Fungus, is alarmingly high premium coffee prices. No doubt this cost is translated to you, the everyday consumer, so be on the lookout for your daily “cup a’ Joe” to be pricier than usual. Experts are saying that the rising cost of coffee will lead to more competition in the market for higher quality coffee.

Consumption rates

Stemming from market research over the past few years, investigators have found that the counties producing the beans have also started consuming higher quality coffee themselves. More consumers added to the mix only contribute further to the coffee shortage that began this year.

The second half of the 2014 Market projections are still unpredictable, but the International Coffee Organization cautioned that the damage of the drought could extended into the 2015-2016 crop, keeping prices high for the next few years.

So how do you the consumer combat these rising prices? Well, you could drink less coffee… which would probably end bad for everyone around us or we can be mindful of our waste. Drinking half a cup and tossing it out, employees taking stacks of K-cups home and not keeping your coffee equipment clean and functioning properly can really have an effect of how much coffee is consumed.

Need some more advice on your coffee choices, equipment, layout and cost? Talk with one of our Java Geniuses or download our free whitepaper on how coffee can improve your employees moral.

Are you looking for a quality office coffee delivery service?  Our Java Geniuses are ready to bring quality coffee to your office, workplace or shop.  Contact our team or call us at 866-452-8228

 

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