U.S. Coffee Bean Supplies Are at a 6-Year Low, and More Problems Lie Ahead
Large coffee chains like Starbucks make grabbing a cup of coffee one of the easiest things you do all day; but thanks to the COVID-19 pandemic, getting those coffee beans from places like South America to the United States has become extremely difficult—and the cost of coffee could start to creep up if things don't get any better.
A massive shipping container shortage has made moving anything around the globe more difficult—just look at Costco's cheese supply—and coffee, which is consumed around the world but grown in specific regions, is no exception. Bloomberg reports that U.S. stockpiles are at a six-year low—and that's coming off a record 2020 crop in Brazil, the top-producing country. Conversely, Brazil's 2021 season is shaping up to be a disaster due to poor weather, leaving the whole industry in flux: Future supplies are up in the air at the same time that the pandemic has created uncertainty in consumer behavior. Add in "nightmare"-like shipping costs, and businesses could be faced to make tough choices about pricing.
Even if the shipping container situation gets resolved, multiple analysts are reportedly anticipating a global supply deficit in the coming year or two. Futures on Arabica coffee beans in New York are up about 24 percent since October, according to Bloomberg, and supplies of unroasted beans in the U.S. were down over 8 percent year-over-year last month.
Meanwhile, in the short term, large amounts of beans are sitting around with nowhere to go. One Brazilian coffee warehouse company, Dinamo, said they were waiting for 18 empty containers to arrive. "These containers will probably take about 15 more days to get here amid bottlenecks at the port," Luiz Alberto Azevedo Levy Jr., a director for the brand, was quoted as saying.
Overall, the ramifications don't seem that terrible for consumers quite yet: Maybe a more expensive cup, especially if all these issues drag on. But next time you easily grab your morning coffee, maybe take a moment to appreciate how difficult it all was behind the scenes.