The Coffee Industry is in massive turmoil. After years of record low prices and crazy high demand (aka Colonial exploitation at work and working perfectly) in December 2024 the global coffee market finally met a wall. Prices more than doubled almost instantly. 

And high global prices for coffee is a good thing right?

Absolutely! Coffee is still too damn cheap and it should cost much more. 

But that's not what's happening now. Yes the MARKET price is suddenly massively, all time record high, but at the same time climate change is wreaking havoc on farmers and cutting harvests in half. Farmers have always had to navigate a treacherous tightrope across the market chasm that is hellbent on driving them under. And while a gradual, semi predictable price increase is a win-win for everyone, a near instantaneous doubling of the commodity price combined with big supply shortages means a lot of disaster.

Imagine a tightrope walker crossing a canyon. They plan their steps carefully, balancing with a pole to keep steady. But suddenly, strong gusts of wind start blowing unpredictably, making it nearly impossible to stay on course. This is what’s happening in the coffee market right now—farmers, exporters, and roasters are trying to navigate extreme price swings, but the record-high coffee price (the C price) has turned their usual balancing act into a dangerous struggle.  

Farmers, exporters, and roasters often use hedging to protect themselves from sudden price changes. It’s like a tightrope walker using a safety harness, ensuring that if they slip, they won’t fall too far. But when prices skyrocket unexpectedly, those who pre-sold coffee at lower prices months ago still have to deliver at those rates, even though today’s market is much higher. This leads to margin calls—like someone yanking on the safety harness and demanding more rope immediately, or else they cut it loose. If companies can’t come up with the extra cash, they risk financial collapse.  

For farmers, this chaos is a disaster. Many small producers don’t actually benefit from high prices because they’ve already locked in sales at lower rates. Meanwhile, exporters and importers get hit with massive margin calls, making it harder to pay farmers or even keep buying from them. Roasters also suffer because they can’t predict costs, making it difficult to set prices for their customers.  

So, while record-high coffee prices might seem like a good thing at first, they actually bring instability. Like a tightrope walker fighting unpredictable winds, coffee producers and businesses are struggling to stay balanced in a market that has become riskier than ever.

Add in the, logical and hugely awesome (over time), situation where coffee pickers and coffee farm workers also know that the market price has doubled and so they demand much higher premiums for their work. Which is fantastic and good and much needed. Except that coffee farmers have to pay these increased costs now, even if they already sold their coffee at the low price. Again, a gradual increase in prices and pay is our mission and our goal and is much needed. With careful planning we can all come together and make it happen.

But doubling in 30 days mostly just means that farmers will suffer. With the massive increase in margin calls, exporters and importers have dramatically less cash to buy coffee. And then since all coffee is now 2-3x the price they can only buy 1/2 as much again. It's a vicious cycle that's hard to break. The great exporters and importers will weather it. Same with properly prepared coffee roasters who do forward contracting and were already paying top of the market prices like Torque. 

But 2025 will be a year in which we fully expect to see the NY C price of coffee exceed $4.00 and to see a large number of small to mid sized exporters and importers fail. They will go bankrupt or simply close up shop and default on contracts and payments. 

And there will be many, many hundreds of coffee roasters in the US who will fold this year and even more beginning of 2026 when the full impact of these conditions manifest. 

At Torque we will likely be very strong in 2025 and 2026 because:

1. We forward contract 100% of our coffees - many months before the coffee is shipped
2. We pay more and we don't require any risky customizations
3. Our Proportional Pricing model means we have strong relationships and transparency with farmers so they know exactly the equity they get
4. We work very closely with our producers, exporter and importer partners to ensure supply and payments
5. We contract a year out most of the time - we have been working on end of 2025 and early 2026 coffees for two months now and have already locked in our purchases
6. We are narrow and deep rather than wide and shallow - we work with only a few origins and 1 or 2 producers in each country - we buy more coffee from fewer producers so we can keep them in business

But if you know people at the small local roasters support them as best you can because it will be a hell of a tough few years.