What A Drop In Coffee Production Means For You

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You might have noticed that your morning cup of Joe has been getting more expensive. In June, Starbucks announced it would raise prices on both its specialty drinks and its packaged coffee. According to Reuters, prices on grande and venti drinks went up 10 to 15 cents on June 24. Earlier this summer, JM Smucker, who is behind Folgers and Dunkin Donuts, raised its coffee prices for the first time in three years. That caffeine fix is getting pricier, and you can expect prices to keep going up. As a crop that's very sensitive to climate change, coffee-bean growth will continue to struggle as our environment warms.

After petroleum, coffee is the second most valuable traded commodity on the global market. Rising demand coupled with a predicted drop in production of 1.5 million bags (about 200 million pounds) between 2014 and 2015 means higher prices at the counter. The shortage has been blamed on both a fungus called coffee rust that’s sweeping through the plantations of Central America as well as a drought in Brazil — the world's biggest coffee producer — that’s the worst the country has seen in decades.

In the face of climate change, in the long term, we may be looking at a very different global coffee economy.
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A 2013 report by the Intergovernmental Panel on Climate Change says that rising global temperatures will reduce coffee growing areas around the world, according to The Guardian. The IPCC paper "projected the world will warm by 2.6 to 4.8 °C by the end of the century without deep cuts in greenhouse gas emissions," and cautions that if there were a 3° Celsius rise (roughly 5 °F) in the average temperature in Brazil by 2050, the area suitable for production would decrease by two-thirds in the main growing states of Minas Gerais and São Paulo. In other areas, The Guardian adds, rising temperatures could entirely eliminate the amount of land suitable for coffee production. And, while still other regions in Brazil may be able to start growing coffee because of a change in climate, it would not compensate for the loss. That’s a big deal in a country that’s responsible for producing one out of every three cups worldwide.

But, don’t panic just yet. “Consumers will not go without coffee,” says Dan Cox, the president of Coffee Enterprises, a legal and strategic consultancy for the bean trade. He emphasizes that roasters will do what they need to do to continue producing enough roasted coffee to keep up with demand, but others caution that these environmental changes may negatively affect flavor. And, a lower supply of coffee can have a particularly pronounced effect on specialty roasters, who often focus on single-origin coffees. With a decreased supply, some may struggle to find producers to keep their supplies stable.

In the short term, some coffee from previous years is still available. Green coffee that goes unsold remains as inventory that carries over from year to year. Suppliers can pull from this leftover stock to boost the supply that they sell to roasters, who in turn sell to consumers. Plus, some roasters have already purchased the beans but haven’t roasted them yet. Those are safe, too. But, as the drought and rust continue to plague coffee growers, you can expect your cup to get a little more costly.

While your wallet may take a small hit, it's the coffee farmers and communities around the world who depend on the crop for their livelihood who will suffer the most on account of these changes. "Climate change is the biggest threat to the industry. If we don't prepare ourselves we are heading for a big disaster,” Mauricio Galindo, of the International Coffee Organisation, told The Guardian.

Sounds like your caffeine fix is worth a little more than you thought.

This post was authored by Anna Brones.

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