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Your morning cup has gotten more expensive of late. Why? Raw, green coffee beans now cost more than they have at any point in the past 14 years. There are a lot of reported reasons for this state of affairs: Development and climate change are eating away at the amount of land suited to coffee growing; demand for coffee—especially the high-quality stuff Portlanders take for granted—is on the rise in India, Brazil and China; and speculators have flooded into the commodity coffee futures market, causing the market to spike.
The cost of green coffee, for tiny local roasters and Starbucks alike, is set by the International Exchange in New York, where contracts for future deliveries of coffee are bought and sold. While specialty roasters like Stumptown generally pay much higher than market price to get the best beans available, the commodities, or "C," market sets the lowest price any farmers co-op is likely to sell for. On March 9, according to Reuters, the C market hit a 34-year high at $2.96 per pound. One year ago, the price hovered between $1.20 and $1.60 per pound.
In response to the upheaval in the market, all of Portland's small roasters have raised their retail and wholesale prices: Stumptown's Hair Bender blend has risen to $16 per pound retail from $14 since May 2010, and now wholesales for just over $9 a pound. So with a small drip coffee running $2, where does the money go? We crunched the numbers to find out.
WWeek 2015