Higher coffee prices may impact local buyers
Fungus, drought could affect small roasters
The steadily rising price of coffee worldwide has hit major grocery store brands, but may have a varied impact on local shops.
A drought in Brazil and an epidemic of coffee rust fungus in South America caused wholesale coffee prices to rise steadily from $1.10 per pound in January to $1.70 per pound in April. Prices saw a slight reprieve in May, falling to $1.63, but it was still 37 cents higher than this time last year, according to the International Coffee Organization.
Kraft increased the price of Maxwell House and Yuban coffee by 10 percent June 7. Smucker raised the price of Dunkin’ Donuts and Folgers by 9 percent.
That is unlikely to deter coffee hounds. The National Coffee Association estimates that 83 percent of the adult population in the U.S. drinks coffee and U.S. consumption is rising.
“Coffee is America’s favorite form of caffeine. It’s one of those products that’s fairly recession-proof,” said Matt Lauer, a coffee roaster and owner of Fahrenheit Coffee in Mancos. He said he didn’t see a huge dip in sales during the recession.
As the coffee growers in South America work to battle the coffee rust, Lauer is afraid that an increase in his prices will be inevitable. Lauer buys all certified organic and fair trade coffee, beans that are already more expensive.
“It’s a matter of staying in business, while trying to keep our prices as reasonable as possible,” Lauer said.
Coffee rust is fungus that coats the leaves of the tree and eventually kills the plant. Lauer sees it as a long-term market problem because of the way it is combatted.
The trees can be trimmed of all their rust-infected leaves with the hope that the plant will grow back healthier or new trees can be planted. But coffee trees require three years to mature
It has already lead to a decline in the variety of beans that he carries because his importer can’t keep them in stock.
Jude Schuenemeyer, the owner of Let It Grow in Cortez, also roasts his own coffee. But he doesn’t foresee an increase in his prices because he’s already buying the highest-quality available and is paying more per pound than broader commodity prices.
“If I was doing a lot of wholesaling, I couldn’t afford to do the margins on the commodity side,” he said.