The Coffee Crisis: Will History Repeat Itself?

Creating a sustainable coffee economy isn’t a marketing phrase designed to sell coffee for higher prices. It’s an ongoing effort that’s critical to keeping quality coffee available while taking care of the people responsible for creating it. Despite the efforts of the third-wave coffee movement, some industry insiders fear we’re on the verge of a coffee crisis. 

It wouldn’t be the first time.  

Coffee relies heavily on a global collaboration. Virtually all coffee is grown south of the equator, yet almost all of the top 25 coffee-consuming countries are north of it. Coffee farmers often have little choice but to meet the demands of corporations and consumer markets thousands of miles away from them. To further complicate things, many coffee-growing communities are located in countries with corrupt governments that impose heavy taxes, pricing restrictions and more. 

As coffee shops rose in popularity during the 60s and 70s, the coffee economy became strained as consumers started to care more about the type of coffee they drank. Finally, at the end of the 80s, things reached a breaking point. 

The Coffee Crisis of 1989 

One of the main driving forces for regulating coffee prices, quotas, etc. is the International Coffee Agreement (ICA). Created in 1962, the ICA helped maintain stability between exporters and importers of coffee. The ICA is overseen by the International Coffee Organization (ICO), a group made up of representatives from all major coffee-producing countries and most of the consuming countries. 

Every five to six years, the ICO would ratify the ICA to keep it current with market demands and global changes. In 1989, however, negotiations became heated as consumer preferences began to shift toward higher-quality coffee. The main point of contention was between Brazil, the world’s largest producer of coffee, and the U.S., the world’s largest coffee importer. 

Negotiations ended in a stalemate, resulting in the ICA lapsing. Coffee prices predictably plummeted, losing roughly half of their value over the year. Though the ICA was able to resume in 1994, coffee prices have remained volatile since and some argue the market has never fully recovered.  

Are We Heading Toward Another Crisis? 

Though the crisis of 1989 is arguably the most prominent event to impact the coffee market on a global scale, many coffee producers have continued to experience their own struggles over the past 30 years. Countries like Burundi have battled against local regulations and fluctuating market pricesHarsh working conditions, low wages and even slave labor have been ongoing issues for the industry as well. 

Meanwhile, in 2018, the US dropped out of the ICA altogether. Though the U.S.-based National Coffee Association and the U.S. office of the Specialty Coffee Association continue to support and collaborate with ICO, our country is not bound by its regulations. As the world’s largest importer, our removal inevitably impacts the authority of the ICA. 

 

In addition to economic challenges, coffee farmers are facing irregular rain, record temperatures and other environmental hurdles. Coffee plants are sensitive, requiring just the right conditions to thrive. Farmers in Columbia and other countries are finding that unseasonable weather and rising temperatures are negatively impacting their crops, resulting in smaller yields and a lower quality product. 

Yet, despite these challenges, today’s roasters, distributors and third-wave coffee shops are working hard to help the product they love thrive around the world. At 7 Corners Coffee, we only work with ethical roasters who are transparent with the origins of their coffee beans and the conditions under which they’re farmed. Not only does this help ensure farmers are paid livable wages and enjoy safe working conditions, but it results in a better tasting cup of coffee. 

7 Corners Coffee is proud to be one of the many wonderful Minneapolis coffee shops working toward a sustainable coffee economy. Together, we can work to avoid a future crisis while sharing the story that’s behind every cup of coffee.  

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