The price of green coffee has been steadily climbing over the past year, with the most significant increase since November 2024, impacting coffee buyers worldwide.  The price surged beyond historic highs → In February 2025, our cost for green was up 70% year over year. What happened? What does the “C Price” and coffee futures contracts have to do with this? And how is this going to impact coffee in cafes and the grocery stores?

Let’s dive in.

Supply and Demand

There has been an increase in global demand for coffee. Specialty coffee has grown in popularity and is expanding to new markets. According to one of our importers who spoke with a green buyer from China early this year, coffee demand there is expected to rise by 15%! There is a growing demand for coffee in countries that have historically not imported much.

Pair increased demand with decreased supply and you have a recipe for rising prices. A few factors have contributed to the slowdown in the supply: 

• Climate change in key producing countries like Brazil, affecting harvests

• Aging farmer population, with fewer young workers entering coffee farming

• Labor shortages for picking on the farms, leaving cherry unpicked

• Low inventory in consuming countries due to high interest rates

• Shipping challenges, including container availability and logistics disruptions

• Rising production costs at the farm level, making it harder for farmers to maintain yields

These challenges have been simmering for a number of years, and when you mix in high interest rates and speculation from Wall Street, the pot comes to a rolling boil. Because of the high interest rates, the cost to purchase and carry coffee has become a much higher risk. Because of this, importers are holding a much slimmer position. This has led to extremely low stocks of coffee in consuming countries. 

The “C Price”

The global benchmark price for coffee is determined by the market, known as the C price. Green Arabica coffee futures contracts (that’s a mouthful) are traded daily on the Intercontinental Exchange. When we contract coffee through our importers, it’s like a drop in the ocean, too small to influence the market. Instead, it’s the big trade houses and investment funds that drive price movements by buying and selling at scale.

While the C price serves as a baseline for green Arabica coffee costs, the final price we pay is higher. If the C price is $4.00/lb, by the time we factor in origin-specific premiums, quality bonuses, logistics, warehousing, and exporter/importer margins, our final cost for green coffee could range from $5.00 to $7.00 per pound—or even higher for rare or exceptional coffees.

The “C price” of coffee has more than doubled in the last year. It climbed steadily all year, and spiked sharply beginning in November 2024. The former high was in 1977 at $3.39/pound. Feb 6th 2025 it closed at $4.00, and on Feb 13th 2025 it peaked at $4.39. 

For our first 11 years in business (2013-2023), the average C price was $1.25. We are at 3X that level now as I write. 

While a high C is great for farmers, the current market conditions are putting excessive strain on the supply chain, which could lead to long-term instability. With cash flow tightening, financing becoming more expensive, and credit availability shrinking, many businesses in the coffee industry are struggling to keep up. 

But what goes up, must come down…the catch is, everyone expects the C to level out at a much higher normal. 

Uncertainty

Uncertainty is the big factor causing the C price to skyrocket through Q4 2024 into Q1 2025. The C price fluctuates due to supply and demand, uncertainty, and speculation by traders in the futures market.

As Bob Fulmer of Royal Coffee put it: “Of all the factors driving the market, speculation by far is the reason the market gets too high or low and gets there too fast. It is a casino.”

Wall Street has a big impact on the C price, and that seems to be the case right now. Hedge funds, large investment firms, and individual speculators actively trade coffee futures without ever taking physical delivery, treating coffee as a financial asset rather than a commodity they intend to use. Add in the uncertainty of potential tariffs on top of all the supply and demand shifts and you have a recipe ripe for a price surge. 

Your Wallet

This year we will be paying more for coffee than ever before, and so will every other roaster. It doesn’t matter if you are buying direct or through an importer, farmers can get more for their coffee so contracts are being re-negotiated. 

Cafes and shops that sell to-go coffees are already raising the price of their cups by about $0.50. Retail bags of 12oz coffee are going up a few dollars.

While coffee prices rise and fall, our commitment to quality and responsible sourcing will not waver. We remain focused on bringing you the best coffee possible and running an efficient, sustainable business. We are doing everything we can to continue offering a great product at a competitive price.

We truly appreciate your support—thank you for being part of our coffee community! If you have any questions, we’d love to hear from you: hello@backyardbeans.com