Nov 27, 2019

Extremely dry conditions in Latin America are driving a surge in coffee prices

Local roasted coffee beans, Arabica, in Minca, Colombia. Photo: EyesWideOpen/Getty Images

Extremely dry conditions in Latin America have led to a slowdown in coffee harvesting in Honduras, causing prices to surge 20% on the Intercontinental Exchange in recent weeks, the Wall Street Journal reports.

Driving the news: Coffee futures in mid-October were at $.93 a pound and have now reached around $1.157, spiking a total of 12% over two trading sessions last week alone, per the Journal.

The backdrop: Honduras is the third-largest producer of arabica coffee in the world and has a "disproportionately high influence on futures prices," according to one commodities brokerage firm cited by the Journal. It's here and in other arabica-growing countries like Peru and Brazil where dry conditions have taken a toll.

  • Coffee demand is expected to rise globally in the coming year. But the International Coffee Organization is forecasting a decline in world coffee production by 0.9%, to 167.4 million bags for the 2019–20 marketing year.
  • That is being driven by a 2.7% decline in arabica production, which is on pace to fall to 95.68 million bags.

Go deeper: The scientists saving coffee from climate change

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Investors react to Brazil's plummeting coffee reserves

Brazilian coffee beans in Rio de Janeiro. Photo: Christophe Simon/AFP via Getty Images

Brazil, the world's largest coffee producer, could reach its steepest drop in coffee reserves since U.S. government records began in 1962, according to new Department of Agriculture projections reported by Bloomberg.

The big picture: Hedge funds and other money managers are taking their net-bullish holdings on arabica coffee to their highest levels since 2016, Commodity Futures Trading Commission data showed Friday. A "bigger biennial crop in 2020-21 in Brazil may bring relief to supplies," Bloomberg notes — but 60% of wild coffee species worldwide were found to be in danger of extinction earlier this year.

Go deeper: The scientists saving coffee

Keep ReadingArrowDec 14, 2019

The economics of a Thanksgiving meal

Illustration: Sarah Grillo/Axios

The holidays are often a pricey time for families. But new numbers show that the cost of an average Thanksgiving meal remained steady this year — with certain staples actually seeing a cut.

Where it stands: The average cost of a Thanksgiving dinner for 10 is up only one cent — to $48.91 — from last year's total, the American Farm Bureau Federation reports. A 16-pound bird costs about $20.80 — or about $1.30 per pound — down 4% from last year.

Go deeperArrowNov 28, 2019

Report: Trump's new SNAP rules could push thousands off benefits

A volunteer packs boxes with food to be handed out to needy people. Photo: Justin Sullivan/Getty Images

The Trump administration is rolling out new rules in April 2020 that could cause 223,000 people to lose food aid benefits, The Wall Street Journal reports.

Why it matters: Officials say the rule will encourage more people to work. However, critics say this is another example of the Trump administration's "efforts to deepen hardships" of the poor while cutting congressional authority over assistance programs, the Wall Street Journal writes.

Go deeperArrowDec 4, 2019