Retail Coffee Prices Up 38% in One Year
This week, Smuckers, the makers of Folgers and Dunkin Donuts retail coffee announced an 11% increase in the cost of their coffee. This comes on top of a 10% increase in February, a 9% increase in August of last year and a 4% increase in May of last year.
If you apply all of the increases announced by Smuckers, the wholesale cost of coffee has increased by slightly more than 38% from May of last year. This price increase is what Smuckers charges to the retail stores that sell the coffee. The actual price increase to consumers may be slightly more or less than this, but we know coffee prices are dramatically higher than last year.
There is some speculation that commodity investors and speculators have caused most of the increase, however, as previously mentioned in this blog regarding other commodity increases, the world is rapidly reaching the point where food demand is outpacing food supply and if this keeps up, we will continue to have rapid price increases like in coffee.
Paul Neiffer is a certified public accountant and business advisor specializing in income taxation, accounting services, and succession planning for farmers and agribusiness processors. Paul is a principal with CliftonLarsonAllen in Walla Walla, Washington, as well as a regular speaker at national conferences and contributor at agweb.com. Raised on a farm in central Washington, he has been immersed in the ag industry his entire life, including the last 30 years professionally. Paul and his wife purchase an 180 acre ranch in 2016 and enjoy keeping it full of animals.
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