As a dedicated coffee drinker and a person who aims to be keenly attuned to the environmental cost of my lifestyle, I hear the alarm bells blaring throughout the coffee world. Through 2024 and continuing into 2025, the commodity price of green coffee beans has risen to never-before-seen highs, peaking in February 2025 at $4.41/lb. A major driver of these high prices is coffee shortages in Brazil, the world’s largest biggest exporter of Arabica coffee beans. Arabica is the most popular variety of coffee beans—likely the type of coffee you drank in your cup this morning. Drought and other effects of climate change ravaged Brazilian coffee crops this year. This is a harsh reminder of the realities we are contending with—climate change is detrimentally affecting farmers globally, and US consumers are now facing these effects.

Price, price, price

You might be thinking—Fairtrade advocates for a higher price to be paid for commodities, so do we see these sky-high coffee prices that have emerged over the last six months as beneficial? It's complicated. Even though market prices are currently high, farmers are not necessarily benefitting (we'll unpack that in a minute). Additionally, while the coffee price is currently high, it's historically volatile, with its market price changing multiple times a day. These sudden surges and falls in prices can be a source of great strain for small-scale farmers.

To dig in further to the question of current coffee prices and what they mean for Fairtrade farmers, let’s brush up on the Fairtrade Minimum Price. The Fairtrade Minimum Price is a price floor to buffer smallholder farming cooperatives against the volatility of commodity markets. If the coffee market busts, and the Fairtrade Minimum Price for coffee is above the market price, farmers selling beans on Fairtrade terms will receive the Fairtrade Minimum Price for those beans. With high market prices, the Fairtrade Minimum Price is not in effect, and the farmer will receive the market price. These high market prices, however, don’t mean farmers are making higher incomes. It’s important to remember that the recent price hike is a result of significantly decreased supply of coffee beans. Shortages mean that farmers have fewer crops to sell. At the same time, the costs of farming inputs are increasing, as well. Altogether, this combination of decreased yield and increased input costs often cancels out potential gains from higher prices. Ultimately, the conditions around this climate change-induced price hike disadvantage farmers more than the opportunity to sell coffee at a higher price benefits them.

Price is crucial—but alone, it’s not enough

Coffee farmers and other experts designed the Fairtrade system with the knowledge that price is a crucial element of addressing the root cause of farmer poverty—and that price alone is an insufficient intervention. That’s why the Fairtrade Premium and producer networks are such critical elements of Fairtrade’s structure.

The Fairtrade Premium is an additional sum of money paid per pound of Fairtrade coffee beans sold that farmers spend to address their biggest needs—like infrastructure improvements or climate resiliency measures. Farming communities determine their local priorities and invest the Fairtrade Premium in projects that are critical for social, economic and environmental sustainability.

In addition to the Fairtrade Premium, Fairtrade partners with farmers and workers through Fairtrade producer networks. Producer networks, such as CLAC in Latin America, are organizations of local experts who provide critical support to farming cooperatives. Paulo Ferreira Jr, Commercial Coffee Manager at CLAC, highlights producer trainings on best practices for climate adaptations and risk management as key components of Fairtrade’s efforts to develop coffee cooperatives’ capacity to navigate the current marketplace. Between the Fairtrade Minimum Price, the Fairtrade Premium and Fairtrade producer networks, farmers in the Fairtrade system are more resilient and financially stable than their non-certified peers. Take a look at this independent study which found that Fairtrade certified coffee cooperatives in Peru had 50% higher incomes and better price stability compared to non-Fairtrade cooperatives over a 10-year period ending in 2021.

What will we choose?

Even with this increased resiliency, however, Fairtrade coffee farmers are not immune to the shocks of the global coffee market—and we’re at a definite turning point with regards to the future of coffee, one that’s based on how all of the players in the supply chain respond to the reality of increasing coffee prices.

The average price of ground coffee reached $7/pound in January—an all-time high. It’s anticipated that coffee roasters and cafes will follow suit. These looming price increases lead the coffee industry to ask—how high can coffee prices rise before coffee consumption decreases? I’ll turn the question back to you, our reader-- will you continue to support climate friendly, resilient, and ethical practices by buying Fairtrade coffee, even as prices rise? Together, we can work towards a future full of good coffee and fair treatment of farmers and workers. If we close our ears to these blaring alarm bells, we risk a future without coffee.