Coffee Prices On The Rise

Coffee prices are the latest grocery item troubling American consumers. The United States is the world’s largest importer of coffee, but produces less than 0.1% of all coffee for domestic consumption, importing over $8.2 billion (1.6 metric tons) of coffee last year alone. The average retail price of coffee spiked 21% in the past year, marking the sharpest rise since the late 1990s.

Tariffs are certainly part of the problem. Brazil produces around 37% of the world’s coffee, but now faces a 50% tariff on coffee beans. The average price of Brazilian coffee now sits around $6 per pound. Brazil also experienced a depleted harvest in 2024-25 due to drought and unfavorable weather conditions. The harvest was 9% beneath traditional levels. Global production rose by 4.3 million bags, but was offset by lower stocks, and prices remained high. The US spent $1.41 billion last year on Brazilian coffee alone, and a 50% tariff in addition to increased prices is causing grocers and retailers to raise prices.

Brazil and Colombia primarily focus on Arabica beans, with Colombia being America’s second-highest importer. In far contrast to Brazil, Colombia’s tariff sits at 10%. Still, the US purchased $1.4 billion in coffee beans from Colombia last year and any levy will be felt by consumers. Colombia’s 2024-25 coffee harvest was extremely robust at 13.2 million bags, a 23% increase from the previous year. Farmers believe production will fall by 5.3% in the coming harvest due to weakening La Nina conditions and heavy rain.

Vietnam supplies 17% of the world’s coffee, but the US mainly relies on South America for imports. Vietnam’s tariff sits at 20% and many roasters have complained that this is affecting their bottom line. Same with Indonesia, which has a 19-32% levy.

Brazilian coffee exports to the US have fallen by nearly 46% since tariffs were imposed. While the US consumed 15% of Brazilian coffee exports, Germany was close behind at 14% and has surpassed the US to become the top buyer. It is undeniable that tariffs on Brazil have caused a spike in US coffee prices, which has been exacerbated by a weak harvest.