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Permalink Reply by Bridget Jones on February 18, 2011 at 3:24pm

wow i had no idea. Whats happening here in little old New Zealand, we just frozen milk prices for the whole year! Its been going up so fast which is no good as we are a dairy Country with more cows then people lol.  I hope this helps to hold the price of coffee :)

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Permalink Reply by Tom Maegdlin on February 21, 2011 at 6:27am

I have some kind of interesting insight on this being that I work in the financial services industry as well as run my little outfit. Here is my take on it. Institutional and retail investors are still blanketing their portfolios with commodities. What I mean by that is the average investor still does not feel confident enough in the global economy to bring their money off the sidelines and put it back into growth securities that offer higher returns. Although there has been a lot of indication with inventories and general volume on the trading floor, people still feel commodities are the best way to shelter themselves from the volatility of the broader market. This will mean higher commodities prices until investors start to feel greedy again and throw their money back in growth. So I guess my thesis is, blame reactionary investors! All in all I think when this is over, prices will be slightly higher but nowhere near these highs of late.

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Permalink Reply by Stickman on February 21, 2011 at 8:23am

Gotta be careful not to instill too much panic here, though.

Green bean prices doubling doesn't mean that a 12 ounce Huehue is going to be $4 per cup.  It means that the cost to the roaster of one of their ingredients has doubled.  Labour locally hasn't doubled, gas or propane or electricity hasn't doubled, sugar, cream, cups and lids and rent haven't doubled.

 

By my calculations a pound of ROASTED specialty beans that I used to sell for $10 wholesale will now have to be about $13 wholesale.  Do the math and figure out how much per cup we'll be raising prices.

 

Of course we don't want to raise them now and then again when our next shipment comes in...The big question is: blip or trend?

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Permalink Reply by Stickman on February 21, 2011 at 8:25am

That's something I wondered about - tax season, time to stash extra cash in investments before the end of the season.  In Canada we have until March 1 to get our taxes filed which means most people with money are buying mutual funds and the like.  Commodities heavy I would bet for this year.

Tom Maegdlin said:

I have some kind of interesting insight on this being that I work in the financial services industry as well as run my little outfit. Here is my take on it. Institutional and retail investors are still blanketing their portfolios with commodities. What I mean by that is the average investor still does not feel confident enough in the global economy to bring their money off the sidelines and put it back into growth securities that offer higher returns. Although there has been a lot of indication with inventories and general volume on the trading floor, people still feel commodities are the best way to shelter themselves from the volatility of the broader market. This will mean higher commodities prices until investors start to feel greedy again and throw their money back in growth. So I guess my thesis is, blame reactionary investors! All in all I think when this is over, prices will be slightly higher but nowhere near these highs of late.

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Permalink Reply by Mike McGinness on March 11, 2011 at 11:38am

Have we seen the end of this insane upward price spiral!? Time will tell. Tickled $300 hitting $299.xx day before yesterday, Wednesday. Really thought it would crack three this week but didn't. Instead yesterday jumped down to low $280s. Today currently mid to low 270s. Crazy, over $25 swing in 2 days. Here's hoping the down trend continues!

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Permalink Reply by Bryan Wray on March 11, 2011 at 12:29pm

I'd just as soon see the upswing continue as long as we can educate our customers as to why, and more importantly, why specialty coffee is still a great value that they can more than afford.

 

Comparisons to the price of a fine dining meal verses fast food, a box of wine verses a bottle, a 30 of crap beer verses a 750mL of craft beer.  I think as we reach to educate our customers more- which it seems everyone is being extremely vocal about doing at this point- it will end up being a great thing for the Specialty coffee scene and a bad thing for mediocre coffee.

 

Here's to hoping

-bry

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Permalink Reply by Jason Card on March 11, 2011 at 12:58pm

A bit of info, if you're interested:

 

NYtimes on Climate change and bad harvests in Colombia:

 

http://www.nytimes.com/2011/03/10/science/earth/10coffee.html?_r=1&...

 

NYT Debate on future of coffee (Peter Giuliano from Counter Culture has a good piece in here, among others)

 

http://www.nytimes.com/roomfordebate/2011/03/09/coffee-the-new-shak...

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Permalink Reply by Bryan Wray on March 11, 2011 at 1:15pm

There's a ton of info on the internet about the rising prices and why.

 

Jason Dominy had a good write-up

The Counter Culture comic that just rolled out

Sweet Marias/Coffee Shrubs/Chris Schooley had a good write up

 

Simply searching "rising coffee market prices" in Google will return a lot of pretty solid results.

 

Truth is, consumption is up considerably in coffee producing countries, consumption is up everywhere else as well, some markets are hording their coffee- waiting for the "perfect moment" of price spike to release it.  Adding to the problems are the obvious comments listed here about speculators driving the prices up.  We also have global warming playing it's part, making the growing area on every mountain a little smaller (because the "best" starting altitude keeps moving up the mountain, but the peak of the mountain/growing region isn't getting any higher...)

 

There's a ton to it.  Basically, as long as we can explain to our customers why this is a GOOD thing and not a bad thing and we adjust our prices accordingly to reflect the spikes we should be fine.

 

-bry

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Permalink Reply by Mike McGinness on April 20, 2011 at 10:01am

Yup, hit $300.10 yestday. Today highest I've seen so far is $307!

Josue Morales said:

Its going steady, I think we're going to be seeing those $300 soon! 

Ridiculous, I believe, is the right word to use. 

Mike McGinness said:

So far since yesterday up $4 = up 1.45% in less than a day. Speculator investors gone wild... Wait just checked again, up another $1.45 to $276.55 while I typed this!

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