musings of a coffee ragamuffin.

Many consumers are not aware, but the prices coffee roasters pay are dictated by the New York Board of Trade via the “C” Market. C standing for commodities. Coffee is sold in futures contracts, or contracts to buy a certain amount of coffee in the future for a certain amount. Just like oil. Many have said it’s thought that coffee is the second most traded commodity behind oil (although I don’t know that to be fact.) These prices are affected by many things, including: output changes up or down based on weather conditions at origin, political unrest, processing challenges, transportation costs and/or strikes, and lately, speculation. Also, supply and demand, with the example of Brazil in particular. Brazil has become the second largest coffee consumer in the world. As that happens, the world’s largest coffee producer in the world has also become a larger factor in coffee pricing, due to the amount of total coffee that takes off the market as a whole.

Do you ever notice that the price you pay for gas goes up and down throughout the year? And what is it based on? Well, mostly it’s based on speculation as to what it will cost in the future to replace what gas the oil companies have. As prices go up, their costs go up, and so it is with coffee. Roasters like Batdorf & Bronson have to lock in futures contracts at whatever the current futures prices are, and this is precisely why you should expect to start paying a good bit more for your coffee. Coffee prices are up 91.56% over the past year. Have you seen that 91.56% increase in the price you pay for your coffee, either at your local coffee shop or grocery store? Nope. Should you? Yes. Why? Because you should want these coffee roasters to be able to stay in business. Especially coffee roasters like ours who work hard for the very farmers not only growing the coffee, but the millers and processors as well. Not to mention their families. Roasters like us work incredibly hard to get more money back to where the coffee starts, and that’s important work. (And that’s not to mention the people here whose jobs and livelihoods are dependent on it, like mine. And the people who run your local favorite coffee shop or local coffee roaster.)

It’s one of the things that’s frustrating about this society where the 99 cents cup of coffee is promoted as a good thing, and all I can think of is, A. What kind of poor quality are they selling? and B. What farmers are getting screwed on the other end of that 99 cents cup of coffee? Let’s face it, when you think about it, when we’re demanding lower prices from coffee farmers who are already making piss-poor wages, just who are we screwing? Coffee consumers have got to understand that in coffee, we have got to be willing to pay more for this highly labor intensive crop. Have you seen how coffee is grown, picked, and processed? Find videos of it online. Look at all the people that touch coffee along the way to give you your morning fix. There’s no way you can see how labor-intensive coffee is and complain about the price of it.

So, coffee prices are at prices we’ve not seen in many years. It will cost more for roasters to buy coffee to roast. And as they continue to increase, to remain sustainable they will be forced to increase the prices they charge to wholesale customers like your local coffee shop and your grocery store. There’s no way around it. These roasters can’t afford to lose money in this economy, and no business can and stay in business. So, you’ll see smaller coffee roasters go out of business, because bags of coffee that they were once paying $162 for before roasting, now costs almost double that price. For larger roasters, the prices become exponential. The increased costs become much bigger numbers as they buy much larger amounts of coffee. Add to it the increased cost to get coffee delivered, and you can see, it’s a challenging time for coffee roasters. (And if you’re wondering where why coffee is bought at $2.51 by coffee roasters and you buy it for $15, keep in mind there are the costs to get the coffee in, to roast the coffee, to package the coffee, to deliver the coffee to the shop, and the shop’s cost in selling it to make a profit for themselves.) Roasters everywhere are trying to figure out what to do to avoid passing large increases on the their customers for fears of losing business, but let’s face it, it’s inevitable and unavoidable.

Which is why this blog post is SO important. Because your local coffee shop will be forced to raise their prices. Your local coffee roaster will be forced to raise their prices. You really need to understand why these prices are going up. Do a little research on coffee prices. Understand, and I can tell you from first hand experience, people in the coffee industry are NOT making money hand over fist here. We do it because we are passionate about the product and it’s people. Ask your local coffee shop owner if they’re retiring soon. They will laugh in your face. There is simply not tons of money in the coffee shop business unless you’re buying cheap Robusta coffee and specialty coffee roasters and retailers like us are certainly not doing that.

Please continue to support your local coffee shop. Please continue to support your local roaster. Please educate yourself as to why these increases happen. Please know that on the other end of that cup of coffee are people like myself that have invested our lives into coffee as a passion, not a commodity. Please know that coffee needs to be more expensive so that farmers can make real, living salaries, so that their kids can have access to the same things our kids here in America have. So that they can carry on with growing crops that have meant so much to the generations before them. So they can eat, and have clothing. There really is so much riding on it.