Dropping Coffee Prices on the Market – Also For You?

Prices for coffee beans are falling. Specifically for Arabica and Robust beans. They are trading at multi-year lows right now and are expected to fall even more.

Coffee plants produce coffee beans in a two year cycle. The crops typically cycle through a rising and falling production in a two year timespan. Right now we seem to be in the middle of a two year rise and thus there are too many coffee beans on the market which in turn reduces the price of the beans.

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Coffee Beans

You can check out the whole background story on fool.com

The other factor influencing prices is the failure of the free market, or government intervention, as the Brazilian government props up loss-making farmers with subsidies. In Brazil, coffee costs around $1.26 per pound to grow, and in Colombia it cost around $1.60. Right now, coffee can be sold for $1.20, but has dipped as low as $1.17, making it totally uneconomical for growers. However, Brazil’s government is supporting growers, and recently unveiled a $1.4 billion support package to help farmers who are not making enough from their crops – effectively maintaining oversupply in the market and keeping prices low.

Read the whole story at Falling Coffee Prices Will Lead to Higher Profits for Starbucks.

Will the consumer see this through cheaper coffee prices? The answer to this is: depends. While brands like Starbucks and Green Mountain Coffee are expected to have rising profits, other brands like Folgers have traditionally reduced prices for coffee for the consumers. While this might not be the best strategy to make investors happy, it does foster brand loyalty and might pay back in the long term.

What do you think? Will your favorite brand of coffee get cheaper or will they increase their profits? Let us know in the comments below!

If you want to find Single Cup Coffee Maker Reviews then go to http://singlecoffeemaker.biz.

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