If you have noticed your usual bag of coffee costing more lately, you are not imagining things. In 2025, coffee prices have surged to record highs in the U.S. and globally— but it is not just about inflation. The spike is driven by a perfect storm of environmental, economic, and logistical challenges brewing behind the scenes.  

But what's really driving this sharp rise in coffee prices? Let's break down the key causes and what they mean for coffee lovers, producers, roasters, and other coffee businesses.

 Quick Overview

• Coffee prices in the U.S. have risen by 75% since 2020, averaging $7 per pound in 2025.

• Climate change is disrupting major coffee-producing regions.

• Labor shortages on coffee farms are increasing wage pressures and reducing harvest efficiency.

• Global coffee demand is surging, especially in China, India, and South Korea.

• Rising production costs affect every stage of the coffee supply chain.

• Supply chain disruptions and tariffs are driving up import and shipping costs.

 

Why Are Coffee Prices Rising?

According to the U.S. Bureau of Labor Statistics, the average retail price for ground coffee hit $7 per pound in early 2025 — a staggering 75% increase from just five years ago. Global market data supports this sharp rise: the FAO reports that average coffee prices rose 38.8% in 2024 compared to the previous year. In December 2024 alone, high-grade Arabica prices were 58% higher, and Robusta (commonly used in instant coffee) surged 70% year-over-year.

Line graph showing the average U.S. retail coffee prices from 2015 to 2025

Climate Change and Coffee Prices

Most of the world’s coffee is grown in the tropical regions around the equator, the bean belt, which stretches across Latin America, Africa, and Asia. Unfortunately, these coffee-producing areas are increasingly affected by extreme and unpredictable weather patterns linked to climate change.

Farmers across the Bean Belt are struggling to adapt to these conditions. For instance, In Kenya, one smallholder farmer saw his annual yield drop 40% over a decade due to erratic rains. When farms shrink and become less productive, the total supply drops, pushing coffee prices up. 

These climate pressures are long-lasting. Even if one good harvest comes along, coffee trees cycle through “on” and “off” years. In an off-year, trees still are recovering from a bountiful prior crop and naturally produce less. Until yields stabilize, the smaller global supply will keep coffee prices elevated.  In short, climate change directly raises costs.

Read more about climate change and the future of coffee.

Labor Shortages on Coffee Farms

Coffee farming is labor-intensive, and many producing regions now face worker shortages. The reasons vary by country. Harvest seasons are a race against time; missing rains or crops out of reach means lost yield forever. Labor gaps during the harvest have already led to outright losses in multiple regions.

• In Mexico and Central America, aging rural populations and migration to cities or the U.S. have left fewer pickers. 
• In 2024, strict immigration policies out of Nicaragua reportedly cut labor flow into Costa Rica, so much so that roughly 15% of Costa Rica’s coffee crop was left unpicked. This kind of loss directly cuts the future supply of beans.
• Even where labor is available, it’s often at a higher price. To attract workers, farms must offer better pay or conditions. Solai Coffee notes that farmworkers in Kenya earn as little as $1.40 per day despite the high value of the final cup. The overall supply will tighten if enough farms cut corners or leave coffee behind for other crops.
• In large producers like Brazil and Colombia, mechanization can offset shortages, but human pickers are irreplaceable for small-scale growers (who produce the bulk of specialty coffee). 

Global Coffee Demand Is Booming

Coffee isn't just popular in the U.S. and Europe anymore. Countries like China, India, and South Korea are seeing exponential growth in coffee consumption. According to ICO (International Coffee Organization) data, demand in emerging markets has risen by 2-3% annually.

More global drinkers mean:

• Greater competition for limited green bean supply.
• Higher pressure on coffee-growing regions to meet demand.

Even slight increases in consumption can tip the balance, leading to significant price volatility — and consumers worldwide feel the ripple effects.

Supply Chain Disruptions and Tariffs

Geopolitical tensions and trade policies have strained global supply chains. Recent tariffs imposed by the U.S. government have increased import costs for coffee and related goods. These tariffs, combined with shipping disruptions, have contributed to the rising prices consumers are now facing.

While climate and demand play a significant role, economic inflation touches nearly every stage of coffee production:

• Fertilizer and input costs have risen due to geopolitical tensions.
• Labor shortages in both producing and consuming countries have driven up wages.
• Energy and fuel prices have impacted transport, roasting, and distribution.

Our Response at Solai Coffee

The rising cost of coffee is a window into a complex global system facing mounting pressures while some factors, like weather and inflation, are beyond our control, how we source, support, and consume coffee matters more than ever.

Amid these challenges, Solai Coffee highlights its direct-trade, farmer-first model as a stable, transparent alternative. This “farm-to-table” approach means a larger share of your purchase goes back to the farmer. Cutting out intermediaries “reduces the risk of compromising quality and price fixing.

For example, Kenya AA coffee (a top-grade bean) is listed at about $14 for a 12-ounce bag – significantly higher than commodity-grade coffee. That premium covers farm-level costs (wages, fertilizer, processing) fairly.  

When you choose Solai Coffee, you support a movement for fairness, sustainability, and resilience in coffee.

Make your next brew count. Shop Solai Coffee