Brace yourselves, coffee lovers, for a bit of sticker shock. It'll soon cost you more for your favorite cuppa joe, because of drought conditions half a world away.
A prolonged and severe dry spell has hit Brazil and damaged some of its coffee crop. About one-third of all the world's coffee and more than half of the world's arabica beans – which are prized for their mild flavor and used in gourmet blends – grows in Brazil. Prices for coffee beans at the wholesale level are at a two-year high, WCCO reports.
At least one commodities trader, Volcafe, has cut its 2014 coffee crop outlook by 11 percent compared to January, according to the Wall Street Journal. And that could translate into a shortage of 11 million 60-kilogram (132 pounds) bags of coffee beans this season.
The situation will be clearer in May, when the harvest gets underway in Brazil. But analysts are saying we'll likely see a 20-25 percent increase in coffee prices at grocery stores starting next month, according to the Wall Street Journal.
Prices for cans and bags of coffee sold in supermarkets typically go up first, according to the Journal. Coffee shops can hold out longer, because the cost of beans is a smaller share of their overall costs.
Just a few weeks ago we were told to expect higher prices for bacon, ham and other pork products, along with costlier beef.