Coffee Prices, Bob Dylan and Changing Times

In 1964, Bob Dylan wrote what would become the archetypal protest song, “The Times They Are a-Changin’.” Since then, this song has been quoted, covered, and revered.

Bill Gates quoted the song in his 1984 Apple Shareholder meeting when he introduced the Macintosh for the first time.

Public Enemy, the hip-hop group formed in 1985 by Chuck D and Flavor Flav, quoted the song in their hit "A Long and Whining Road," which reflects on 20 years of their music. In it, Chuck D directly compares himself to Dylan as a spokesman for a generation. In fact, there are 22 references to Bob Dylan songs in that one song.

Shoot, even the NHL had a commercial made using that song, covered by Susan Calloway (full disclosure, I don’t know who Susan Calloway is) for the 2022 Stanley Cup Finals.

(Really, this intro is just giving you some material to go and look at)

The Changing Times and Coffee Prices

Needless to say, this song is timeless and has a wide reach and influence within our world.

It’s not breaking news that times are changing, and they are changing quickly.

You know one thing that has not changed for a long, long time until just several weeks ago? The price of coffee. At the end of 2024, the “Arabica futures” price hit an all-time high.

Rising Costs of Coffee Production

You know what has changed a lot in the last 50 years? The cost of production to make that coffee. It’s a math problem that just won’t be solved if “we” keep operating in historical patterns.

To be honest, I feel like I’m wading into the deep end of a pool and can barely tread water when it comes to understanding this topic, even when what may be expected of me is to dive deep. With that, let’s proceed in this conversation by acknowledging that this is an extremely nuanced and important topic. I don’t understand this subject as deeply as I’d like, but am trying to remain teachable and open. I want to share the things I do understand along with Fika’s perspective.

Understanding the C Market

What We Know

Around 70-80% of coffee is sold through the C market. The C Market, also known as the Coffee C Market, is a global exchange where coffee is traded as a commodity on a daily basis. It's run by the Intercontinental Exchange (ICE) and primarily deals with Arabica coffee. The prices on this market are determined by supply and demand dynamics, as well as market speculation.

While most specialty coffee roasters like Fika do not purchase coffee through the C Market, the “market” still greatly affects even the cost of specialty coffee sold outside of the market.

Reasons for the Drastic Increase

What has caused the market to increase so drastically? While there are several perspectives to consider, here are a couple of the main reasons, generally explained: First, the weather in Brasil. To be more precise, the predicted weather in Brasil (Brasil is the largest producer of coffee in the world and has a great influence on the market). There is one report that is predicting a 30% drop in production from Brasil.

Other reasons include geopolitical factors such as the delay of EUDR and unrest on international shipping ports around the world. There are also the unstable weather patterns that have and will bring events like early frosts and more rains than expected.

This is just the tip of the iceberg, and a full understanding of this could easily be the subject of an entire college degree.

Impact on Specialty Coffee Prices

Even though we don't purchase our coffee from the market, the prices of our coffee and other specialty coffees rise because of it. Why? When the market prices increase, some coffee producers may find it more appealing to sell their coffee on the market instead of putting in the extra time and expense to meet specialty standards. Consequently, this affects the rise in the price of specialty coffee. Coffee sold on the market is cheaper to produce, whereas specialty coffee is more costly for producers to cultivate. As market coffee costs rise, pushing up the cost of specialty coffee with it, we (we are using “we” very loosely) are still hoping that producers can get paid a wage that is above the cost of production and encourages them to live a healthy life.

Understanding Specialty Coffee Costs and Fika's Approach

If you're reading this, you likely drink specialty coffee and want to continue doing so. We're not trying to convince you, but rather help you understand these realities:

There are the costs of coffee and the costs of doing business. Within both of these realms, there exists a wide spectrum of choices on how to operate. Each decision is interconnected, creating a complex web. At Fika, we have our own systems and make decisions based on our mission, vision, and values. However, Fika also exists within a broader complex web of businesses, organizations, systems, and families. It's our community, the place we call home.

A healthy community is much like a healthy ecosystem, “one that is resilient and can withstand change, while still providing essential services to the environment and to people.”

Balancing Innovation and Community

As we work to achieve a balance in all of this, we strive to be innovative, ensuring we don't lose our imagination or our business cents. We must remain hopeful, open to change, and work together for the good of our ecosystems, both here and where coffee is produced.

As we strive for balance, we must remain hopeful, open to change, and work together for the good of our ecosystems, both here and where coffee is produced.

Que the music!

Verse one.
Come gather 'round people
Wherever you roam
And admit that the waters
Around you have grown
And accept it that soon
You'll be drenched to the bone
If your time to you is worth savin'
And you better start swimmin'
Or you'll sink like a stone
For the times they are a-changin'