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(Iowa) -- Coffee prices are brewing up trouble for consumers, up 20 percent from this time last year. Currently, there is a 50 percent tariff on the United States’ largest supplier, Brazil. However, there are many other factors contributing to the increasing coffee prices.
"The tricky part with coffee prices right now is that the tariffs are increasing an already unstable pricing market." said Robb Pearson, Director of Coffee at Windmill Coffee Roasters. "Last year Brazil, who produces over 60 percent of the coffee worldwide, had a bad year and so because of a small harvest the price went up last year significantly."
Windmill is a coffee roaster based out of Ames that provides coffee to over 20 central Iowa coffee shops, including The Slow Down, Daisy Chain, and La Mie. The company imports coffee from all over the world, but their main suppliers are Brazil, Ethiopia, Colombia, and Guatemala. Pearson says that Windmill had to raise their prices this spring to offset increasing costs.
Coffee can't be grown in the U.S., so 99 percent of all the coffee consumed in the United States is imported. However, the U.S. is the largest importer of coffee in the world. Pearson says several factors are playing into the increased prices of coffee, including supply and demand, and the vulnerability of growing coffee due to various weather conditions.
"Since Brazil is off the table for many coffee roasters, the prices of places like Nicaragua and Honduras is all going to go up because of that increased demand," said Pearson.
There is a 10 percent tariff on other coffee imports including Ethiopia, and Colombia. Vietnam another large supplier of coffee has a 20 percent tariff currently.
Consumers will see the most increased prices at grocery stores. Peter Ralston, an associate professor of supply chain management at Iowa State University, says that he believes prices will go down a bit in a few months when Brazil recovers from their bad harvest.
A bipartisan No Coffee Tax Act has been introduced in the House to repeal the 50 percent tariff on Brazil, in hopes of bringing down the price of coffee. The bill, led by Representatives Don Bacon (R-Neb.) and Ro Khanna (D-Calif.), aims to exempt coffee from tariffs imposed after January 19, 2025.