Coffee is quite sensitive to environmental factors and only grows in certain specific regions as a result. Those factors are being upended by climate change. Coffee is going to very rapidly become a luxury product.
Billionaires don’t care. Twenty dollars or two dollars for a cup is effectively the same price to them; insignificant. It’s the rest of us that get fucked.
Except we are nowhere near a situation like that. Articles like this don’t tell the actual prices because they are so small people might start questioning why they pay so much for coffee.
The poll had a median forecast for arabica prices at the end of 2025 of $2.95 per pound, a drop of 30% from Wednesday’s close and a loss of 6% from end-2024.
$3 per pound - $6 per kilo. Or to put it in another way, 4.8 cents per shot of espresso, two of which go in a 16 oz Starbucks latte that costs you $5.75, which would be enough money to buy 120 shots worth of bulk arabica.
If that goes up by 7% or 70% or 700%, the cost of that latte should hardly change.
Exactly. And all of those stay the exact same price even if raw coffee price increases, meaning the price of a ready made cup of coffee hardly changes as the actual raw bulk coffee is only 1/60th of the total price of a starbucks latte.
There is a reduced supply of coffee beans. Let’s say 30%. This requires that 30% of customers have to be priced out of the market.
If the coffee shop owners only increase the price by several cents then the demand stays the same. They have to fight for coffee beans which drives up their costs step by step.
However, if they increase the price in advance, and far more than necessary right from the start, then the reduced demand matches the available supply and the value of the coffee beans roughly remains the same which allows them to profit from most of the price hike.
What do you mean? There are globally less coffee beans available. Or do you mean the 30%? That’s just an arbitrary number, as I tried to make clear by writing “Let’s say …”.
You’d be right in theory - the cost of logistics should scale with weight or volume, not price - but we’ve already seen from the price shocks over the last few years that in reality corporations will always take the opportunity to price gouge on any upstream change, even when it has no impact on their costs.
But even putting aside the fact that capitalism will take it’s cut, you’re citing the potential impact of 700% price increases, but I’m not ruling out the possibility of 7,000% increases or higher. With the potential scale of impact that we could see from climate change, and how it affects delicate ecosystems like those in which coffee grows well, that’s not outside the realm of possibility.
Oh yeah, even a tiny increase in bulk price is a fantastic excuse to bump the profit margins for corporations, I’m not even pretending that wouldn’t happen in real life. Just look at the US egg prices and the massively increased profits of the companies selling them.
As for what’s the upper limit on the price increase in the long run, that’s quite hard to estimate, because the more expensive coffee becomes, the more options there will be for growing it in sub-optimal conditions. At some point, somewhere, growing coffee in a greenhouse becomes profitable to do.
Is that at $10/kg, $30/kg? $100? Over 9000? I don’t have a clue.
But for quite a lot of people the coffee they currently drink is so ridiculously overpriced that even an absolutely massive increase wouldn’t have to mean they actually need to stop drinking coffee - to make a latte at home that was expensive as the one from Starbucks, the coffee itself could cost $350/kg - 15 grams of it would be $5.25, plus the milk. It would just completely kill coffee shops as a concept.
Those factors are being upended by climate change.
How, exactly?
It’s my understanding that coffee does best in warm climates. Shouldn’t global warming, at the very least, change where we grow coffee as opposed to just removing the areas we can grow it in?
It’s not quite as simple as that and there are other growing conditions that are required. If we take Arabica, it requires a very small window temperature window, sunlight but not so much it scorches the plant, a particular pH of soil, and consistent rainfall.
Climate change brings unpredictability to growing conditions so even if you had to move where you grow it, it won’t necessarily mean it’ll grow well. Plus different locations can bring on new diseases for the (coffee has its fair share of diseases to combat with) and so new varitals would need to be selected which is no simple task.
As the article points out, coffee is notorious for being fussy when growing it.
Others have given the detailed answer, but the really simple one is this; “How many jungle plants grow well in deserts?” If it was simply a matter of “hot = good”, surely the answer would be “all of them.”
There are specific conditions that every plant requires to grow well. Some plants are more tolerant of disruption to those conditions, some less so. Climate change affects all of those conditions. Increased global temperatures can make some places hotter, some places colder, some places wetter, some places dryer, and have all sorts of other knock on effects too.
Coffee is quite sensitive to environmental factors and only grows in certain specific regions as a result. Those factors are being upended by climate change. Coffee is going to very rapidly become a luxury product.
Billionaires don’t care. Twenty dollars or two dollars for a cup is effectively the same price to them; insignificant. It’s the rest of us that get fucked.
Except we are nowhere near a situation like that. Articles like this don’t tell the actual prices because they are so small people might start questioning why they pay so much for coffee.
$3 per pound - $6 per kilo. Or to put it in another way, 4.8 cents per shot of espresso, two of which go in a 16 oz Starbucks latte that costs you $5.75, which would be enough money to buy 120 shots worth of bulk arabica.
If that goes up by 7% or 70% or 700%, the cost of that latte should hardly change.
Logistics cost money
Shucking and processing the beans costs money
Roasting the beans costs money
Exactly. And all of those stay the exact same price even if raw coffee price increases, meaning the price of a ready made cup of coffee hardly changes as the actual raw bulk coffee is only 1/60th of the total price of a starbucks latte.
How about this explanation:
There is a reduced supply of coffee beans. Let’s say 30%. This requires that 30% of customers have to be priced out of the market.
If the coffee shop owners only increase the price by several cents then the demand stays the same. They have to fight for coffee beans which drives up their costs step by step.
However, if they increase the price in advance, and far more than necessary right from the start, then the reduced demand matches the available supply and the value of the coffee beans roughly remains the same which allows them to profit from most of the price hike.
this is fiction writing. you are literally making that up
What do you mean? There are globally less coffee beans available. Or do you mean the 30%? That’s just an arbitrary number, as I tried to make clear by writing “Let’s say …”.
the price doesn’t need to change at all. if it does, it is a decision someone makes.
You’d be right in theory - the cost of logistics should scale with weight or volume, not price - but we’ve already seen from the price shocks over the last few years that in reality corporations will always take the opportunity to price gouge on any upstream change, even when it has no impact on their costs.
But even putting aside the fact that capitalism will take it’s cut, you’re citing the potential impact of 700% price increases, but I’m not ruling out the possibility of 7,000% increases or higher. With the potential scale of impact that we could see from climate change, and how it affects delicate ecosystems like those in which coffee grows well, that’s not outside the realm of possibility.
Oh yeah, even a tiny increase in bulk price is a fantastic excuse to bump the profit margins for corporations, I’m not even pretending that wouldn’t happen in real life. Just look at the US egg prices and the massively increased profits of the companies selling them.
As for what’s the upper limit on the price increase in the long run, that’s quite hard to estimate, because the more expensive coffee becomes, the more options there will be for growing it in sub-optimal conditions. At some point, somewhere, growing coffee in a greenhouse becomes profitable to do.
Is that at $10/kg, $30/kg? $100? Over 9000? I don’t have a clue.
But for quite a lot of people the coffee they currently drink is so ridiculously overpriced that even an absolutely massive increase wouldn’t have to mean they actually need to stop drinking coffee - to make a latte at home that was expensive as the one from Starbucks, the coffee itself could cost $350/kg - 15 grams of it would be $5.25, plus the milk. It would just completely kill coffee shops as a concept.
You’re forgetting the most obvious factor: charge the most people are willing to pay.
How, exactly?
It’s my understanding that coffee does best in warm climates. Shouldn’t global warming, at the very least, change where we grow coffee as opposed to just removing the areas we can grow it in?
It’s not quite as simple as that and there are other growing conditions that are required. If we take Arabica, it requires a very small window temperature window, sunlight but not so much it scorches the plant, a particular pH of soil, and consistent rainfall.
Climate change brings unpredictability to growing conditions so even if you had to move where you grow it, it won’t necessarily mean it’ll grow well. Plus different locations can bring on new diseases for the (coffee has its fair share of diseases to combat with) and so new varitals would need to be selected which is no simple task.
As the article points out, coffee is notorious for being fussy when growing it.
Short answer: more atmospheric heat = more energetic weather = more extremes and variation.
Many crops don’t just need an average temperature, they need protection from extremes and the climate they evolved for. Buckle up.
Others have given the detailed answer, but the really simple one is this; “How many jungle plants grow well in deserts?” If it was simply a matter of “hot = good”, surely the answer would be “all of them.”
There are specific conditions that every plant requires to grow well. Some plants are more tolerant of disruption to those conditions, some less so. Climate change affects all of those conditions. Increased global temperatures can make some places hotter, some places colder, some places wetter, some places dryer, and have all sorts of other knock on effects too.