The Costs of Coffee

And why paying more for coffee could actually make coffee better.

Dear BOPpers,

For the past few years we've been living in an inflated world. I'm not an economist and I have nothing useful to say about a vibecession or anything like that, but I will make the obvious observation that our dollars don't stretch as far as they used to. And because I so often have beans on the mind, I'd like to reflect a bit on the price of coffee specifically, and how and why it changes.

You may remember headlines from the beginning of February about how the price of commodity coffee had reached a record high. If you didn't see those stories, here is a brief timeline of what's been happening with coffee prices in 2025, along with some important context.

A Timeline of Coffee Prices

2025	C-price ($/lb)	Grocery price ($/lb)
Jan	$3.10	$7.02
Feb	$4.30	$7.24
Mar	$3.47	$7.39
Apr	$3.35	$7.54
May	$3.34	$7.89
Jun	$2.95	$8.13

The ICE, where people buy and sell coffee futures (and other commodities) (photo: Bloomberg News)

Important Context:

• The "C-price" is the commodity price of coffee futures contracts. So if the C-price was $3.10, this means that investors buying coffee futures (i.e., contracts for raw coffee beans leaving the farm to be roasted) being sold on the Intercontinental Commodities Exchange agreed to pay that price per pound of arabica coffee. For context, in 2024, the price flickered between the high $1's and the mid $2's.

• None of this is adjusted for inflation. While February 2025 the C-price hit an all-time high in nominal terms, the highest inflation-adjusted C-price came in 1977 - which was equivalent to about $20 today. Those people in the late 70's were paying the equivalent of ~$22 for a pound of Folgers.

• Because the C-price is an international benchmark, it does not include the cost of tariffs imposed by any importing country. The Trump tariffs are changing, but they could add an additional 10%-50% for American companies importing green coffee, depending on the origin and the time that the coffee came into the states.

What All That Means

1. The commodity market is not the supermarket.

   • Since the commodities market is based on future contracts (a contract bought today is for coffee that will be delivered in September), there is always a lag.

   • The C-price goes up and down constantly, while the prices consumers pay tend to rise more slowly, and generally don't fall back down easily.

2. All of these prices are still very cheap.

   • Depending on the conditions at origin - how productive the farm is, how much the growers have to pay for fertilizer and processing, etc. - even these "high" C-prices tend to translate to poverty wages.

BOP Beans, in situ at Urban Lodge on Pratt St.

How Most Coffee Moves

Roughly half of all the green coffee in the world is bought by a small handful of multinational companies (Nestle, Starbucks, Lavazza to name a few). Those large multinational coffee roasters have the resources to play just about every role in the supply chain: they do the importing, they roast, they distribute, and in many cases they serve the coffee. By controlling each of these steps, these companies are able to capture a huge portion of the value that's created across the coffee supply chain. They do, however, outsource one very important role in the chain: the actual farming of the beans.

So it's worth asking, why don't these big companies just grow the coffee themselves?

The core reason these companies are happy to outsource the farming of the beans is because farming is far and away the least profitable stage of the coffee supply chain. There is far more risk of loss due to weather, climate change, pests, and politics. Farming requires a great deal of labor and capital investment.

The sobering reality is that Big Coffee companies benefit from coffee farmers staying poor. The status quo, in which the worldwide network of mostly smallholder coffee farms bears the greatest risks and burdens, means that Big Coffee can extract value from the people responsible for bringing this divine crop to life. Farmers in regions that have been ravaged by the legacies of colonialism and climate change have essentially no sway in setting the price for the coffee they sell. The handful of multi-billion-dollar companies that buy most of the world's coffee have massive influence over that C-market price. For every $7 latte Starbucks sells, only a few cents are captured by the farmers. This imbalance helps explain why coffee prices are still so low despite the fact that almost half the world's coffee farmers barely make enough money to survive.

Where the BOP Coffee Comes From

Diever Galindez, the man who farms the Colombian coffee we have on currently

We don't have the power to fix this system on our own. But as a small roaster, we do have the power to buy, roast, distribute, and serve our coffee in a way that doesn't directly contribute to a system that extracts value from the least powerful.

To do this, we work with importers we trust. "Direct Trade" - an agreement between the roaster and the farmer - is something we'd love to do in the future, but as of now we don't sell enough coffee to give farmers the guarantees they'd need to make the relationship worthwhile. There are lots of importing companies out there that do have those relationships with coffee farms and cooperatives. They often work with the farmers to help them develop bean profiles that Specialty Coffee consumers in America demand, and they come to an agreement with the farmers to buy some or all of their harvest every year. These importers then sell those beans to roasters.

A fresh shipment of beans from our importing partners at Cafe Kreyol and BD Imports

Obviously this dynamic has the potential for abuse. How the importer works with the farmers to negotiate a price matters a great deal. We only buy coffee from importers who have demonstrated, fair relationships with the farms they work with, and who go out of their way to communicate the details of that relationship with us.

All of our importing partners pay a premium above the C-price for all the coffees they buy. The average price we pay them for raw coffee is currently $5.70 - almost 30% higher than what the C-price was at its highest, and almost 100% higher than the C-price was in June.

Who Cares

We are not reinventing the wheel here at the BOP - we are taking part in a movement. Other Specialty Coffee roasters and importers have long been putting in the work to operate for the greater good. And, ideally, the more American consumers are willing to pay honest prices for coffee, the more money coffee farmers can demand for their product.

Arturo Rodriguez, the man who farms the Guatemalan coffee we have on

At least that's the hope for now. Who knows. The economics, science, and politics of this business are genuinely complicated. Maybe the premium prices some farmers are getting from the Specialty Coffee market will never fix this system, and things will only get worse. Or maybe some unforeseen developments will miraculously solve all our problems, making delicious coffee cheap for consumers while being a viable product for producers.

In any case. Until I am convinced otherwise, I'll keep buying beans in the most responsible way I know how. And I'll keep roasting, brewing, sipping and selling those beans to everyone who'd like to join me in the struggle to live well while making the world more livable for others.

Until next time,

Jack@theBOP