Coffee is in trouble. Even before the United States imposed tariffs of 50 percent on Brazil and 20 percent on Vietnam—which together produce more than half of the world’s coffee beans—other challenges, including climate-change-related fires, flooding, and droughts, had already forced up coffee prices globally. Today, all told, coffee in the U.S. is nearly 40 percent more expensive than it was a year ago. Futures for arabica coffee—the beans most people in the world drink—have increased by almost a dollar since July. And prices may well go up further:
There is American-made coffee, but it’s primarily made in Hawaii, where land and import/export costs are already exorbitant. And if Americans are increasingly looking to buy American-made coffee, it makes sense that those Hawaiian growers would increase their costs to make up for the sudden surge in demand.
Crops are one of those things with a relatively inelastic supply, because it takes so long to grow. Crops being three months away from harvest doesn’t help when people are hungry now. You can’t just have the army corps of engineers spin up a coffee factory in a week, and expect it to immediately start producing. Because the coffee beans’ harvest is the limiting factor, and that’s not something that can be built overnight. There’s a reason governments keep strategic reserves of things like wheat, rice, cheese, etc… All things where demand can suddenly spike, or where supply can be suddenly wrecked and take a long time to recover.
The Hawaiian coffee is like $10 a bag 😂