- Egg prices are spiraling but it’s not the only morning staple under pressure.
- Coffee is likely to get more expensive in 2025 amid weak crop yields, Bank of America said.
- Arabica coffee prices closed at a record high of $4.04 last week.
Eggs aren’t the only breakfast staple that’s getting more expensive.
Coffee prices are also on the rise and are set to climb even higher this year thanks to supply snags that could exacerbate the shortage of beans, Bank of America analysts said.
In a note on Monday, analysts at the bank pointed to the growing shortage of Arabica coffee beans. Arabica coffee prices closed at an all-time high of $4.04 per pound on Friday, up 26% since the fourth quarter of 2024, when coffee prices hovered around $3.20, the bank said.
The prices of coffee pods and drip coffee are also hovering near record highs. The price of mainstream coffee pods hovered around $0.55 in 2024, BofA’s analysis found, above a key threshold of $0.50 per pod.
The price of drip coffee, meanwhile, ticked up to $0.14 per cup last year, up from $0.13 in 2023.
The bank said it anticipated the coffee supply shortage to get worse, pointing to recent poor coffee harvests and potential issues later this year.
Robusta coffee shipments from Vietnam plunged 45% in November last year thanks to a drought in the country that impacted the crop yield.
The outlook for coffee crops in Brazil also looks "uncertain," the bank added, pointing to the potential for unfavorable weather in February and March.
"Expect retail coffee prices to keep grinding higher," analysts wrote.
Food inflation has been on the rise in recent years, partly due to extreme weather events. Food prices rose 2.5% year-over-year in December, according to the latest consumer price index report. In the worst-case scenario, some researchers see food prices rising more than 4% per year in the coming decades, according to one 2024 study.