As many of you bean juicers know, over the past several months the global coffee industry has been riding wave after wave of uncertainty. Between extreme weather, rising shipping and labor costs, and unpredictable commodity markets, roasters everywhere have been bracing for more volatility. But one of the biggest developments this year has been the swift rise, and sudden removal, of tariffs on imported coffee.

Yes, the tariffs are now gone.
Yes, they created months of (unnecessary) chaos.
And no, removing the tariffs didn’t magically bring green coffee prices back down.

I’ve done my best to sum up what happened, why tariffs hit Brazilian coffee especially hard, and what all this means for the future of coffee prices.

How We Got Here

When the U.S. first implemented wide-reaching import duties, most agricultural products were temporarily exempt, except coffee. These tariffs kick started month’s long processes that affected every aspect of the coffee market across the world. The C-market prices, which I discussed in a previous blog, has hovering around an all time high the last year. And the tariffs only added additional financial pressure directly and indirectly (through market pressures and the volatile stock market. )

For roasters, this wasn’t just an accounting issue. This was landed cost, real dollars, real margin pressure, and it hit at a time when pricing was already historically elevated.

Importers held shipments. Contracts were renegotiated. Some coffee lots, especially in Brazil simply didn’t move. One of my importers Crop to Cup took a massive gamble by rerouting all their Brazilian coffee to Quebec, in hopes that if/when tariffs were lifted, they would have a fresh and ready supply of Brazilian beans for their U.S. roasters (like me.)

Thankfully, the tariffs were removed. But not without termporary and permanent damage to the coffee industry as a while.

Tariffs Finally Lifted, but Prices Still Remain High

Removing tariffs restores a baseline trade environment and allows importers to resume more predictable scheduling and contracting. It also means roasters aren’t paying a tax simply to bring green coffee into the country. However, while tariff removal is a positive development, it doesn’t unwind the steep price increases and the tariffs that came before it.

Even though tariffs have ended, the coffees arriving now (or sitting in warehouses) were contracted months ago, during peak uncertainty and elevated costs. What that means is that the green coffee roaster’s bought in September don’t get cheaper because tariffs ended in November.

Those higher contracted prices are now simply working their way through the system. Basically, all coffee purchased while tariffs remained on coffee are/were still subject to those tariffs. They weren’t retroactively removed nor is there any indication that they’ll be refunded. All while green coffee prices remained at an all time high.

Why Are Coffee Prices Still so High?

The supply of coffee is currently limited around the world, but hopefully only temporarily.

Brazil’s recent harvest cycles have been heavily impacted by drought and frost.
Colombia continues to face reduced productivity.
East African yields have been inconsistent due to rainfall extremes and rising production costs.

And there are massive labor shortages in Central and South America lowering the total harvests from those countries.

Additionally, freight, insurance, container availability, fuel, labor, and inflation all remain significantly higher than pre-pandemic norms.
Even without tariffs, the cost to move coffee from origin to port to warehouse hasn’t cooled meaningfully.And when supply is short, prices stay high — regardless of import policy.

Market Psychology 🤔

Coffee is a commodity, and it’s base price (following the C-Market) is traded daily as a stock option. Again I talk more about this in detail in a previous blog post about the C-Market. Coffee “futures” aka future harvests of coffee are traded on the stock market.

So while futures dipped briefly after the tariff announcement, markets remain historically elevated, and physical coffee prices follow. Climate volatility, geopolitical uncertainty, and tight inventory mean the market (stock brokers and hedge funds) continued behaving cautiously.

Don’t get me wrong, tariff removal is genuinely good news. It removes artificial inflation on Brazilian coffee, reduces uncertainty for importers, and ultimately helps stabilize the U.S. specialty coffee market.

But it does not mean that prices will immediately return to “normal.” At least not anytime soon. Industry experts and long time coffee professionals are estimating that raw coffee prices might return to “normal” (prior to October, 2024) in late 2026 or early 2027. And that’s only if climate, labor, and socio-economic unrest don’t impact future yields.

Some additional food for thought, a new coffee shrub takes 2-4 years to start yielding cherries…

What This Means Going Forward

Short-Term, 1-2 years:

Green coffee remains expensive.
Contracts written during high-tariff periods will continue flowing through the rest of this year and much of next year.
Any savings will be gradual, not instant.

Medium-Term, 2-4 years:

Brazil and other countries may regain some price competitiveness, i.e. cheaper raw coffee. Producers will still make the same but it will be cheaper for importers and roasters because the “middle man” is taking less of a cut. But many Brazilian producers could remain skeptical about continuing to market their coffee to the USA.
We could see downward pressure on prices if global supply improves and increases in the next 1-2 years.

Long-Term, 4+ years:

The biggest forces shaping coffee pricing remain climate change, labor shortages, fertilizer cost, currency volatility, and rising global demand, all issues that are bigger than tariffs.

And unfortunately there’s just no way to predict what the market will look like. In 4 years, so much could change with our climate, with politics, with market resources.. and with tariffs. Sadly, no single policy change can solve these structural challenges.

So What’s Next? What Can We Do?

Support your local roaster. Whether it’s Craig’s Coffee or another local roaster in Detroit or your town. Because my goal, like so many other small rosaters out there, remains the same-

Sourcing from responsible producers and farmers. Working with ethical importers.
Paying sustainable premiums and ensuring fair payouts to producers.
Maintaining quality over shortcuts.
Maintaining expectations and educating our customers on how the industry works.

The path forward will be gradual, not instant. And as always, we will adapt, stay informed, and continue bringing Detroit the best bean juice possible.

Final Thoughts

Support local this holiday season. While coffee tariffs have been lifted, so so many other small businesses are unfairly being affected. Your dollar matters and supporting local not only supports small business, it supports your neighbor and your community. We’re all in this ride for the long haul and the least we can do is look out for each other.

Cheers.

- Craig

Tariffs on Coffee Have Finally Been Lifted, But Prices Are Still at Record Highs