If coffee lovers want to get that morning caffeine jolt at the
coffee pot, they first have to survive the sticker shock at the
grocery store.

Drought and poor flowering in Brazilian coffee trees has prices
soaring. In Atlanta, the price of a 26-ounce bag is approaching
$6. There’s no relief in sight, says a University of Georgia
economist.

“Brazil is the largest coffee producer in the world,” said Bill
Thomas, an agricultural economist with the UGA College of
Agricultural and Environmental Sciences. “Its production will be
down an estimated one-third from last year.”

Short Supply, High Demand

While 1999 was a record production year for Brazil, Thomas says
markets were unable to maintain the low prices.

“Once you have a record year, usually the next year will go down,
and that’s what happened,” Thomas said. “We expect production to
drop from 36 million (60-kilogram, or 132-pound) bags last year
to 24 million bags this year.”

Coffee drinkers can expect to continue to pay more for some time.
The crop is harvested annually. “If we miss one harvest, we have
to wait a full year for another harvest and for supply to catch
up with demand,” Thomas said.

“Brazil is just recovering from the damage their trees suffered
in 1994,” he said. “Most of the damage seems to be to fruit,
rather than the trees, so production could come back as early as
next year.”

Until production comes back to build up the supply — or people
stop drinking coffee, to lower the demand — expect prices to
remain high.

“There aren’t a lot of alternatives for the coffee market,”
Thomas said. “Brazil produces such a high percentage of the
high-quality beans. Colombia and other South American countries
do produce coffee, but Brazil is a major exporter. When Brazil
has a problem, everybody in the world knows about it.”