How many price hikes are Americans willing to stomach for their morning coffee?
Roasted coffee prices surged 12.7% in June compared to a year earlier, according to inflation data from the Bureau of Labor Statistics, while instant coffee saw a 16.3% increase. The retail price for a pound of ground coffee last month was $8.13, up about $1 since January.
Still, demand isn’t likely to go anywhere but up in the US, where Americans drink more coffee each day than bottled water. Instead, coffee drinkers may want to prepare for a future where prices ratchet up even further thanks to a combination of tariffs, rising global consumption, and climate change.
Read more: Are tariffs costing us more?
“As a coffee lover, I wish $8.13 were likely a ceiling. I sincerely doubt it,” Chris Barrett, an agricultural economist at Cornell University, told Yahoo Finance. “I don’t know what might be in store because that depends an enormous amount upon weather in key growing areas. But given the tariffs that seem likely to go into effect over the coming month or so, it’s unlikely prices are going to come down. They’re likely to go up, perhaps quite appreciably.”
In April, President Trump set a universal 10% baseline tariff with higher “reciprocal” tariffs set to take effect Aug. 1. Trump has threatened Brazil, the world’s top coffee producer, with a 50% tariff, while imports to the US from Vietnam, the world’s second-largest coffee producer, are looking at a 20% tariff, Trump has said.
Everyone wants coffee
Last year, world coffee prices increased 38.8% from their average levels in 2023, according to a report from the Food and Agriculture Organization of the United Nations.
Price increases in 2023 and 2024 were largely driven by adverse weather conditions in major coffee-producing countries like Brazil, Indonesia, and Vietnam and increased shipping costs, the report noted.
“Brazil is the biggest coffee producer in the world,” Barrett said. “When you get a hot, dry period in the Brazilian coffee-growing regions, that depresses supply. We saw that last year.”
Some growers have sought to plant at higher altitudes to mitigate the effects of warming temperatures and drought, even moving into areas that were traditionally used for tea production, Barrett said. But supply can hardly expand enough to keep pace, especially as demand increases in countries like China.
“The impact of prices globally really stems from increased demand and issues that coffee growers are facing, primarily related to weather conditions,” said Billy Roberts, a senior economist of food and beverage at CoBank’s Knowledge Exchange research division.
That demand for coffee is pretty steady, Roberts noted, so consumers are willing to spend a bit more when they have to. Higher prices may translate to consumers drinking more coffee at home, but “consumers are going to continue to have their coffee — it’s just going to be a question of where they’re ultimately going to do so.”
Read more: 5 ways to tariff-proof your finances
Taylor Mork, co-founder and president of Crop to Cup Coffee Importers, a specialty coffee importer based in Brooklyn, noted that the “real scary rise” in prices came when futures for arabica in New York — the world’s most popular beans — soared past $4 a pound earlier this year.
Coffee futures have since cooled from those record highs closer to $3 per pound amid expectations that world coffee production will be higher this year, though Barrett noted that futures have swung higher recently due to tariff concerns.
In Mork’s business, tariffed coffee imports are only just starting to arrive in the US, and tariff bills from US Customs are “rolling in now quite steadily.”
“Our costs for quite a while have been up about a dollar a pound,” an increase of more than 30%, Mork said. “That’s pre-tariff.”
Still, there are a few silver linings for coffee enthusiasts: The price differential between specialty beans and the cheaper stuff has been narrowing, Mork said.
“Even with these price increases, the portion of roasters and consumers that are purchasing high-end coffees — which are just getting more expensive — is not falling,” Mork said.
Emma Ockerman is a reporter covering the economy and labor for Yahoo Finance. You can reach her at emma.ockerman@yahooinc.com.
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