By Rachel Beebe
As recent climate change news has us all sitting up and listening (and hopefully acting), you might have also heard about the severe frost that hit the Brazilian coffee harvest in July of this year (2021). Reuters called it the worst cold snap in 30 years and the impact was felt by the global coffee market immediately and will be felt by Brazilian farmers for years to come.
The weather in Brazil affects the global coffee market because Brazil is the largest exporter of coffee in the world—if supply is pinched there, prices go up, and they go up everywhere. In this case, the commodity market price (C-market, as they say in the biz) went up to $2.17/lb., a 7-year high.
But immediate market fluctuations are only one piece of the picture. Frost doesn't just affect the current harvest, it'll reduce the yield for plants in the next harvest as well, and some plants will simply be killed and need to be replanted. In addition, Brazil has a biennial crop cycle. This means that in normal years the harvest will grow and shrink alternately every other year. The 2020/2021 harvest was the largest ever on record for Brazil. This means that the harvest we're currently in is an "off" year, and it's been reduced even further by a drought during the flowering season. The calculus of all this—drought plus frost plus off year crop cycle—means that coffee prices are set to rise steeply.
Oh, and don't forget the lingering effects of the global pandemic, which are still being very much felt in labour costs as origin and overall in global logistics and shipping. (Almost all of the coffee containers we're watching come in to port are currently delayed - so frustrating to have to wait for our delicious coffee!)
So, it looks like us consumers are going to have to pay more for the beverage we love. But is that really such a bad thing? Post pandemic cash flow might be tight for us in the global North, but did you know that the average prices paid to farmers for coffee haven't changed significantly in 50 years?
Some specialty coffee importers are arguing that the current market conditions might be our chance to correct that inequity. Please take a look at A Pivotal Moment for Specialty Coffee by Alejandro Cadena, co-founder and CEO of Caravela Importers in Caravela's blog.
"I think this is an opportunity that the specialty coffee industry must capitalize, to reset the meaning and value of specialty coffee, for the entire industry," Alejandro Cadena