Americans – those lovers of café, mochas, espressos and all types cappuccino – better start bringing a few extra pennies with them to the supermarket when shopping for their stacks of caffeine.
That’s because coffee production in Colombia is going down, a decrease that’s driving prices up. Popular brands such as Folgers and Maxwell have increased the retail prices internationally of several products by at least 25 percent since 2010 because of higher wholesale prices and short supply.
Following the La Niña weather phenomenon throughout 2010, heavy rains have dominated this region. And though these types of weather events usually have a subsequent dry period,
Colombia was not that fortunate.
Coffee growers here are scrambling to harvest their crops, but the odds are more against them than usual.
“Excess rain has become a problem because it has affected flowering,” says Luis Fernando Samper, a spokesman for the Colombian Coffee Growers Federation. “Coffee needs a dry period because it needs to grow properly. But we’ve had too much rain and it has affected production for the past year.”
The country has set a goal of 17 million, 132-pound bags of coffee for 2014. But with last year’s output of nine million bags, that plan may be in jeopardy. Growers are concerned about making a living and producing their Arabica species of coffee, the highest quality bean you can find here. It’s getting more challenging as Arabica futures hit a 34-year peak in early March because of investor fears in the agricultural markets and tighter supply.
Aside from the excess rain, temperatures have risen and humidity in Colombia’s growing regions has been higher than usual. The harsh weather has even fed fuel to the climate change debate among scientists.
The extreme heat is drawing more pests, too, which eat crops and have caused vegetation to develop fungus or plant “rust.” But the coffee federation is remaining optimistic, and believes it can make another genetic variety of bean that can withstand all of these issues.
“There [are] a number of varieties, and some of them that we have been improving are impervious to rust,” explains Samper. “So we are pushing for growers to convert their plantations in five or six years to be rust resistant.”
That may not be fast enough as the global demand rises. Colombia is the second biggest exporter of Arabica to the U.S., only behind Brazil, another country that has felt the effects of La Niña. If all goes well, officials here believe that the new bean varieties will allow supply levels to get back to normal or even surpass what they were producing before the weather issues.
Colombia is renovating around 80,000 acres of coffee land, hoping to make more varieties and even get up to some 130,000 useful acres. That increase, the thinking goes, could get coffee production back to normal levels in three or four years. To get these concrete plans underway, however, it’s going to cost them.
“We are investing in excess of $200,000 million a year in one way or another in supporting coffee growers to get those renovation plans going,” Samper explained.
The Colombian Coffee Growers Federation knows that many other factors play a part in the higher coffee prices, such as high fertilizer prices and the falling price of the U.S. dollar. To get its American importers to buy a good amount of supply, Colombian exporters know that the price must be as low as possible.
Still, the dollar has been weak, making it tougher to do business internationally. The rising international prices can also be felt domestically in Colombia, as consumers pay a lot for beans at local specialty shops and supermarkets. The federation claims that jump is expected, and locals should always anticipate a price that is similar to the international one.
Americans may want to monitor developments here, as it could affect that beloved cup of joe in the morning.
David Noto is the Latin American correspondent for Fox News Radio in Bogotá, Colombia.