The Rising Cost of Breakfast: Why Coffee and Eggs Are Getting Pricier

Introduction: The Perfect Storm Behind Rising Coffee Prices

The cost of breakfast is soaring, and it’s not just eggs that are to blame. Coffee, a staple for millions, is also becoming more expensive due to a combination of factors that are driving up prices globally. Wholesale arabica beans, the most popular type of coffee bean, have reached an unprecedented $4.30 per pound as of February 2025, doubling in price over the past year. Retail prices have followed suit, with ground coffee hitting a record high of $7 per pound in January 2025, up 75% from $4 per pound in January 2020. This surge is not just a temporary fluctuation; industry experts predict that coffee prices could rise by another 25% in the coming months. For consumers already grappling with high food costs, this trend is making morning routines increasingly expensive.

The root causes of this price hike are multifaceted, involving supply chain disruptions, climate change, geopolitical tensions, and shifting consumer demand. Coffee is an essential commodity for many, and its unique position in consumer budgets means that people are often willing to pay more for their daily fix, even as prices climb. Unlike some other goods, coffee has no direct substitutes, giving suppliers and retailers more flexibility to increase prices without losing customers.

The Role of Supply and Demand: Climate Change and Production Challenges

Supply and demand dynamics are at the heart of the coffee price surge. The world’s two largest coffee producers, Brazil and Vietnam, have faced severe climate-related disruptions in recent years. Brazil, which accounts for a significant portion of global coffee production, experienced a devastating combination of drought and frost in 2024, while Vietnam dealt with flooding after a prolonged dry spell. These weather events have significantly reduced coffee yields, with Brazil’s coffee exports dropping by 7.4% year-over-year in 2024 and Vietnam’s December exports falling nearly 40%.

Gregory Zomfotis, CEO of Gregory’s Coffee, highlights that when production in Brazil and other major coffee-producing countries falls short of expectations, it leads to sharp price increases. His company alone expects to purchase up to 700,000 pounds of coffee this year, underscoring the scale of demand even as supplytightens. The impacts of climate change are compounding these challenges, as rising temperatures, droughts, and extreme weather events become more frequent. These disruptions are not just short-term problems; they threaten the long-term sustainability of coffee production, making it harder for producers to meet growing global demand.

Economic and Supply Chain Challenges: Inflation, Tariffs, and Trade Disruptions

Beyond climate-related issues, economic and supply chain factors are exacerbating the coffee price crisis. Inflation has driven up production and transportation costs, making it more expensive for coffee beans to reach consumers. Companies like J.M. Smucker, which owns brands such as Folgers and Café Bustelo, have noted significant inflationary pressures in their operations. Mark Smucker, the company’s CEO, emphasized that coffee is a “pass-through category,” meaning that costs are often passed on to consumers, contributing to higher retail prices.

Further complicating the situation are geopolitical tensions and trade policies. President Trump’s threatened 25% tariffs on imports from Canada and Mexico, for instance, could push coffee prices even higher, particularly for coffee imported from Mexico, a major supplier to the U.S. market. Additionally, a new European Union law set to take effect in December 2025 prohibits the sale of products linked to deforestation, a measure aimed at combating climate change and biodiversity loss. While this initiative is well-intentioned, it could further constrain coffee supplies by limiting imports from regions where deforestation is prevalent.

Geopolitical Tensions and Trade Disruptions: Global Coffee Supply at Risk

The ongoing conflict between Israel and Hamas has added another layer of complexity to the coffee supply chain. Fighting in the Red Sea, a critical waterway for global trade, has disrupted shipping routes, delaying the delivery of coffee beans to key markets. According to the International Coffee Organization, as many as 5 billion bags of coffee destined for Europe were delayed due to slowdowns in the Red Sea and the Suez Canal. These disruptions have created bottlenecks in the supply chain, further driving up prices.

The situation highlights the fragility of global trade networks and the potential for geopolitical conflicts to impact even seemingly unrelated industries like coffee. As tensions elsewhere, such as in the Middle East, continue to escalate, the risk of further supply chain disruptions looms large. For consumers, this means not only higher prices but also potential shortages of their favorite coffee brands.

Growing Demand and Changing Consumption Patterns: A Worldwide Phenomenon

While supply challenges are a major driver of coffee price increases, growing demand is also playing a significant role. Coffee consumption is on the rise globally, particularly in emerging markets like China, where coffee drinking has become increasingly popular. According to the U.S. Department of Agriculture, coffee consumption in China has grown by 150% over the past decade, driven by a younger, more urban population embracing Western-style coffee culture. This surge in demand is putting additional pressure on global coffee supplies, even as production struggles to keep up.

The combination of rising demand and constrained supply has created a perfect storm in the coffee market, with prices likely to remain high in the near term. Companies like Illycaffè, a leading Italian roaster and retailer, are bracing for further price increases, with Chairman Andrea Illy predicting that bean prices could climb by another 25% in 2025. For consumers, this means that the cost of their morning cup of coffee may continue to rise, adding to the financial strain of inflation.

Conclusion: The Broader Implications of Rising Coffee Prices

The surge in coffee prices is more than just a inconvenience for consumers; it has broader implications for the economy and global trade. Coffee is a trillion-dollar industry, employing millions of people worldwide, from farmers and traders to baristas and café owners. Rising prices not only affect consumers but also put pressure on businesses, many of which are already struggling with inflation and supply chain disruptions.

As climate change, geopolitical tensions, and shifting consumer demand continue to shape the coffee market, the outlook for prices remains uncertain. While some experts predict that prices may stabilize as supply chains recover and production levels rebound, others warn that the structural challenges facing the coffee industry could lead to long-term price increases. For now, consumers will have to adjust to a more expensive cup of coffee, a small but tangible example of the far-reaching impacts of global economic and environmental trends.