Coffee Prices Retreat From Record Highs
Yet, Bloomberg warns of double digit increases in coming months...
By: Joe Boudreau.
Back on June 15, 2020 the price of coffee per pound hit a low of just 72.67 cents per pound. Fast forward to February 13, 2025, coffee hit a record high of $4.59 per pound.
To calculate how much of an increase percentage wise this amounts to, I visited calculatorsoup.com and plugged in the numbers. In less than five years, coffee prices have exploded 531.622%!
Yet, the coffee we buy at the store, whether pre-ground or whole bean have definitely not risen by over 500%. Neither have the cups of coffee at your local favorite coffee shop. A medium cup of coffee cost about $1.50 in 2020 (in Canada) and you can still get a medium cup of coffee for well under $2. Had it risen 500% along with the wholesale price, we'd be paying about $7.50 for a single cup so kudos to retailers for somehow keeping prices down.
Myself, I prefer to buy whole bean coffee. I just love the flavor of coffee made from freshly ground beans. From my own observations, I estimate that whole bean coffee prices have risen somewhere around 150% in stores over the last 5 years, a far cry from the 531% increase in wholesale prices over the same period.
That should come as good news to coffee lovers everywhere. Fortunately, the price has fallen a bit over the last month and a half. Coffee prices have retreated from the record high $4.59 seen in mid-February to $3.60 seen at Friday's close. That amounts to a 21.57% drop in price which is quite significant, although I don't expect to see any relief in the stores.
Retailers have done their darndest to keep prices low and I must admit, I am thankful for them doing so but how have they managed to do so without losing their shirts? I suspect they dipped into their stockpiled inventories but what happens when those stockpiles run out?
It means they'll restock at much higher prices. Just in the last 12 months alone, wholesale coffee prices have doubled. Bloomberg, in an article published on March 27, warns of double digit coffee price increases in the near future. The article suggests that a 25% increase in retail prices is in the cards. With that, I am expecting the cost of my fave whole bean coffee to rise by $5 to $7 per 1 kg bag, sometime over the next six months.
We were warned well ahead of time that severe drought in Brazil would could put a damper on coffee production. AP News mentioned this last September!
So while we are seeing coffee futures retreat slightly, prices are still elevated. The best way for us coffee lovers to keep prices down is to brew our own coffee at home. I know this hurts all the coffee shops out there but when 50% of the population lives paycheck to paycheck, brewing your own coffee in these inflationary times makes perfect sense.
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