In February 2013, more than half a million Colombian coffee growers went on strike, blockading highways across the country. Coffee prices at the time were, by historical standards, relatively high. If the common mental model of the coffee market were right, that strike could not have happened: prices up, farmers fine. The model is wrong, and the reasons it is wrong are the most useful things a coffee drinker can learn about the economics of the crop. A farmer's welfare is not the dollar price of coffee. It is revenue in local currency minus costs that move on their own schedule, and the single most common cause of a price spike is a failed harvest, which means the years of the most exciting headlines are frequently the years in which large numbers of farmers have little or nothing to sell. High prices are sometimes good news for growers. Often they are the visible half of a disaster.
The strike that should not have happened
The 2013 Colombian strike is the cleanest case study on record, and Gavin Fridell lays it out in Coffee (Polity, 2014). Colombia had over 560,000 coffee growers, most of them small and medium farmers. They organised a national strike with highway blockades, demanding increased subsidies and support, despite coffee prices that were comparatively strong. The squeeze had come from the other side of the ledger: fertiliser and other imported input costs had risen sharply, and the Colombian peso's high exchange rate meant that dollar-denominated coffee revenue converted into fewer pesos at home. The government initially refused and sent police against the protests, killing one protester and injuring more. Then, within roughly two weeks, it reversed completely: $444 million in new spending on direct subsidies, credit and input support, plus forgiveness of interest and payments on 2013 loans from Banco Agrario, the public bank that held about 90 percent of the country's coffee lending.
Two lessons sit in that fortnight. The one usually drawn is about state capacity: a government that had insisted it could not intervene in the market intervened decisively the moment the political cost of not doing so became high enough. The one that matters here is quieter: the headline price was high, and 560,000 farmers were desperate enough to shut down the national road network. Whatever the C-price was measuring that February, it was not farmer welfare.
Three dials, one headline
The mechanism is worth taking apart, because once you see the three separate dials you can never again read a coffee price headline as a single fact.
The first dial is the dollar price, the one the headlines report. Coffee is quoted and settled in US dollars on exchanges in New York and London, and that number is the only one most coverage ever mentions.
The second dial is the exchange rate. A farmer's costs are local: labour, food, school fees, land. When the local currency strengthens against the dollar, the same quoted price buys less of all of it. Fridell notes the structural version of this: in 1971, when the United States ended the dollar's convertibility to gold and the dollar fell, coffee-producing countries watched their real receipts drop without the quoted price moving at all. Colombia in 2013 was the same arithmetic with the peso in the leading role.
The third dial is input cost. Coffee farming was once close to a closed loop, with seed and soil fertility coming from the farm itself. Over the twentieth century it became what Fridell, drawing on the food-systems literature, calls a through-flow system: purchased fertiliser, purchased agrochemicals, purchased fuel. That converted farmers into buyers of globally priced industrial inputs, exposed to input inflation that has no connection to the coffee price. The trade calls the result the cost-price squeeze, and it is why a farmer can go broke in a year the market calls good.
Three dials, moving independently. The headline reports one of them and implies all three.
A spike is usually a loss story
Now add the question the headline never asks: why did the price rise? For a demand-driven commodity, a price rise can mean customers are paying more for the same supply. Coffee's spikes are almost never that. They are supply shocks, which is a polite term for crops that died.
The pattern is consistent across a century and it held again in the most recent cycle. The 2011 peak followed a poor Colombian harvest. The early 2014 spike followed a severe Brazilian drought. And the record run of 2024 to 2025 was driven by weather at both ends of the supply base: Brazil's monitoring agency CEMADEN described the drought of 2024 as the most intense and widespread in its historical record, an August 2024 cold front added frost damage to arabica farms where early flowering had begun, and Vietnam's 2023/24 robusta crop came in as its smallest in four years. The result, per ICO data, was a composite indicator that averaged a record 354.32 US cents per pound in February 2025, with a daily peak of 375.00 cents on 13 February 2025, beating a nominal record that had stood since 1977.
Ask who was celebrating. A price that reaches a record because Brazilian trees were drought-stressed and frost-burned is high precisely because a large number of farmers lost some or all of their crop. The growers with beans to sell in early 2025 did very well. The growers whose yields had collapsed got the worst of both worlds: little to sell, at the exact moment selling was most worth doing. The farmers cheering a spike and the farmers ruined by its cause are different farmers, and the headline number contains no information about which group is bigger.
Colombia then re-ran its own version inside the same boom. Through the high-price months of late 2025 and early 2026, excessive rain and cloud cover cut Colombian yields; USDA lowered its estimate of the 2025/26 crop by 1.3 million bags to 12.5 million, and ICO reporting showed Colombian monthly production down an average of 26.3 percent between December 2025 and April 2026. Colombian Milds prices averaged well above 320 US cents per pound across that stretch, figures current as of the June 2026 ICO market report. High prices, shrinking harvests, same country as 2013, opposite configuration, identical lesson.
The squeeze runs in both directions
The cost side of the ledger has also stayed obligingly instructive. When green prices fall, input bills do not fall with them. USDA's July 2026 reporting on Brazil, using CEPEA market data, captures it in one ratio: in April 2025, near the top of the market, a Brazilian grower needed about 2.25 bags of arabica to buy a tonne of fertiliser. By April 2026, with green prices well off their peak, the same tonne cost 4.97 bags. The coffee price roughly halved in fertiliser terms, which means that from the farm's point of view the "reset" the trade press welcomed was a doubling of its main input cost. Meanwhile the retail shelf, which had climbed for fourteen months after the green peak, had barely begun to descend; the bag price runs on its own delayed schedule and falls far more slowly than it rises. The farmer's costs are sticky in one direction and the consumer's price is sticky in the other, and both stickinesses point away from the grower.
Booms plant the next bust
There is one more mechanism, and it is agronomic rather than financial. An arabica tree takes three to five years from planting to first full harvest. Farmers respond to a boom the only way they can, by planting, and the tree's own calendar then delivers that supply years later, into a market the boom has already left. Once the trees are in the ground, the capital is sunk and the farmer cannot cheaply exit when prices crash, so supply stays stubbornly high through the bust. This is why coffee whipsaws harder than annual crops, and it is why the sequel to every spike is written in advance. The current cycle is following the script: USDA's July 2026 circular forecasts a record world crop of 189.667 million bags for 2026/27, the supply response to the very prices that made the 2025 headlines. What producing countries have historically done when that surplus lands is its own story, and Brazil once burned three years of world supply trying to manage it.
What a price headline will not tell you
So a coffee price, quoted alone, will not tell you the thing people reach for it to learn. It will not tell you whether farmers are prospering, because it says nothing about currency or input costs. It will not tell you why it moved, and the why usually decides who gained. And it will not tell you about the variable that the evidence says matters most over a farming life, which is volatility. Fridell's most striking calculation compares the regulated era of the International Coffee Agreement, 1963 to 1989, with the deregulated decades that followed: the average composite price across the two periods was nearly identical, at just over and just under 94 cents respectively, but the paths were opposite. Under the agreement the price never returned to its 1963 low and after 1976 held above $1 until the system's final year. After 1989 the price exceeded its starting level in only 11 of 22 years and bottomed at 45 cents in 2002. Same average, different world. What breaks smallholders is not a low mean but the unplannable swing, because the swing destroys the ability to borrow, invest and hold on. A headline cannot carry any of that. A price level is one frame of a film.
The honest recommendation is a habit, and it costs nothing. When you next see "coffee prices hit a record", ask two questions before drawing any conclusion about the people who grow it. What caused the move? If the answer is drought or frost, you are reading a crop-failure story with a price attached. And who had coffee to sell at that price? The answer is never "farmers" as a single bloc. It is some farmers, in some countries, whose costs and currencies happened to line up that year. The C-price is a real number that governs real fortunes. It is just not the number it is almost universally mistaken for, which is a measure of how the harvest went for the people standing under the trees.