The last time I covered the subject of coffee, “experts” tried to gin up fears about caffeine addiction.
It turns out that three out of four Americans drink coffee daily, and over a third enjoy 3-5 cups each day. To say coffee is a staple of the national diet is no understatement.
Coffee ties into some recent news released about the Biden administration today. New Consumer Price Index data was just released, resulting in a positive jolt to the stock market.
Global stock markets rose to record highs while U.S. Treasury yields and the U.S. dollar fell on Wednesday as data showed U.S. consumer prices rose less than expected in April, suggesting inflation has resumed a downward trend in the second quarter.The CPI report raised expectations that the Federal Reserve will cut interest rates two times this year.The Dow and S&P 500 registered record closing highs for the first time since March 28 and the Nasdaq posted a record closing high for the second session in a row, while the MSCI world stock index was also set for a second straight record high close.
Team Biden is desperately trying to change the inflation narrative by highlighting the fact that food prices are not rising. However, pretty much everything else is costing more.
Consumer inflation remained persistently high last month, boosted by gas, rents, auto insurance and other items, the government said Wednesday in a report that will likely give pause to the Federal Reserve as it considers how often — or even whether — to cut interest rates this year.Prices outside the volatile food and energy categories rose 0.4% from February to March, the same accelerated pace as in the previous month. Measured from a year earlier, these core prices are up 3.8%, unchanged from the year-over-year rise in February. The Fed closely tracks core prices because they tend to provide a good read of where inflation is headed.
According to the Bureau of Labor Statistics (BLS), commonly purchased items such as breakfast cereal, milk, coffee, chicken, wine, full service meals and snacks are used in the analysis. As the new CPI report was discussed, rumors that coffee was removed from the analysis began to spread.
Clearly, not many Americans trust the “science” offered by officials of the current administration.
The BLS strongly denied the removal, indicating certain-sized packaging was no longer being used.
A fun, new word is being used to describe the phenomenon of making packages smaller to keep prices the same.
It would not surprise me in the least if Biden’s BLS didn’t shrink the package for the analysis used on other staples as well, resulting in the halt to food price increases that the administration is now promoting in the media.
I thought “shrinkflation” was Biden’s enemy. Maybe it’s more like a frenemy.
A graph showing the rapid escalation in coffee prices since 2021 is dark and bitter.
And coffee prices don’t look like they aren’t going down soon.
Over the past few years, many coffee traders and roasters will have certainly noticed that the price of robusta has been steadily increasing. In October 2021, prices reached a ten-year high as a result of shipping container shortages – meaning they had risen for the sixth consecutive year.Fast forward to June 2023, the International Coffee Organisation reported that the average price for robusta had increased by 7.8% to 132.12 US cents/lb – representing a 28-year high. As of late January 2024, prices have been increasing week on week – and have now reached the highest level in 29 years.It’s safe to say that the price of robusta isn’t going to fall anytime soon. And with interest in fine robusta growing in recent years, is the increase purely a result of rising demand? Or is there more to unpack? Moreover, what impact could we see on the wider coffee industry?
Biden shouldn’t gaslight Americans this much, if he is so opposed to fossil fuels.
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