Coffee Price Soars Past $3.20/Pound: What This Means Historically

Coffee has long been a staple of daily life, but the way its cost impacts your morning cup has shifted dramatically over the decades. From the soaring coffee prices of the 1970s to the undervalued cups we drink today, the journey of coffee pricing tells a fascinating story about economics, consumer behaviour, and value.

In the 1970s, coffee prices were volatile, reaching record highs in 1977 when the Coffee C price hit $3.40 per pound (equivalent to $17.50 in today’s money). This spike was largely driven by the infamous Brazilian frost of 1975, which decimated crops and sent shockwaves through the market.

Back then, green coffee made up a significant portion of a cup’s price—sometimes 25-30%. Other costs, such as rent, labour, and utilities, were relatively low, meaning cafés could adjust their prices to reflect rising coffee costs without overwhelming consumers. Simpler menus and a focus on basic drip coffee also kept overheads manageable.

Consumers, too, were accustomed to seeing price fluctuations in their daily lives, thanks to rampant inflation and broader economic challenges. They might grumble about paying more for their coffee, but they understood the reasons behind it.

Fast forward to today, and the landscape is completely different. Despite inflation affecting nearly every other sector, the price of green coffee has barely risen in real terms over the decades. The Coffee C price now hovers around $3:20 per pound—lower than its 1970s peak when adjusted for inflation.

Yet, the price of a cup of coffee hasn’t stayed stagnant. What’s changed is the cost structure. Rent, labour, marketing, and utilities now dominate a café’s expenses, with green coffee accounting for just 5-10% of the price of a cup. Specialty cafés, in particular, often absorb increases in green coffee prices to stay competitive in a market conditioned by chain cafés offering cheap coffee.

Consumers, meanwhile, expect coffee to remain affordable. The rise of commodity coffee culture has made the notion of paying $5-$7 for a thoughtfully crafted specialty coffee seem excessive, even though other artisan goods like wine and beer have adjusted their pricing to reflect quality and production costs.

While it’s tempting to dismiss green coffee prices as a small part of the equation today, they still matter. Coffee producers are often paid unsustainably low prices, struggling to invest in their farms or adapt to challenges like climate change. Without fair compensation, the future of coffee farming—and the supply of quality coffee—is at risk.

At the same time, the undervaluation of coffee at the retail level undermines its true worth. Compared to other craft products, coffee hasn’t seen the same respect for its journey from origin to cup. Consumers often fail to realise the immense effort, expertise, and risk that go into every bean, from farmers and processors to roasters and baristas.

In the 1970s, high coffee prices were passed directly to consumers because operational costs were lower, and the supply chain was simpler. Today, cafés bear the brunt of rising costs while balancing consumer price expectations and skyrocketing overheads. As a result, coffee prices at the retail level have become disconnected from the realities of green coffee production.

The price of coffee needs to reflect its true value—not just the operational costs of running a café but also the labour and care of the producers who grow and harvest it. Specialty coffee is more than a beverage; it’s an artisanal product that deserves the same recognition as wine, cheese, or craft beer.

By choosing to pay a fair price for coffee, consumers can help ensure that every part of the supply chain—from the farmer to the barista—is sustainably supported. The next time you sip a thoughtfully brewed cup, remember the journey it took to get there—and consider its true worth.