Welcome to Friday Financial Focus!
Each week, we bring you a round-up of the headlines that impact your bottom line. Some you may have heard about, and others may have gotten buried in the chaos of the week. Either way, they all matter when it comes to managing your money.
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This Week's Financial Focus
Last week, we looked at the burgeoning crisis within America's farmland and agriculture industry. This week, we are going from farm to table with a look at how tariffs, climate change, and the trade war are making one ubiquitous Autumn beverage more expensive: THE PUMPKIN SPICE LATTE!
Let's stir up what's behind this pumpkin spice lament!
Trouble is Brewing
BACKGROUND: Many of us can't start the day without a hot cup of coffee in our hands. A major brand even calls it "the best part of waking up"! Americans are the largest single-country consumer of coffee in the world, guzzling down a whopping 169.1 billion 6oz cups per year - an average of 463 million cups per day in a nation of only 342 million people!
Despite that love of bean juice, very little coffee is actually grown in America. Hawai'i produces roughly 4.2 million pounds per year, but that is a mere fraction of what we consume. With a need that is nearly 800 times our domestic availability, the U.S. must import the majority of its beans from elsewhere.
Since 2009, Brazil and Columbia have been the top exporters of coffee to America, accounting for $1.96B and $1.48B respectively. Switzerland has been a consistent third-place, exporting $1.18B of coffee in 2024. Canada, Guatemala, Honduras, Peru, Vietnam, Mexico, and Indonesia round out the top 10.
WHAT IT IS: The U.S. price of coffee has risen 39% in the last year alone, reaching a record-high $8.87 per pound in August. The worst drought in 40 years left Brazil's 2024 arabica coffee harvest 25% lower than expected, pushing coffee futures up 70%. A similar drought doubled the price of Vietnam's robusta beans. Now, a 50% tariff on Brazil and 20% tariff on Vietnam imposed by The Current Occupant of the White House is driving that price even higher.
WHY IT MATTERS: Tariffs are a tax on imported goods. They must be paid by the importer, but that added expense is ultimately passed along to the customer. That customer includes coffee roasters who process the raw beans, coffee shops, restaurants, and ultimately us - the consumers who bears the total brunt of those upstream added costs.
You may think, "Can't we just grow more of our own coffee?" Great question, but the reality is that coffee is a fussy plant that likes a very specific set of growing conditions: stable temperatures between 60° to 70° F, moderate rainfall with distinct wet and dry seasons, high humidity, rich and well-drained soil, high altitudes of 3,000 to 6,500 ft, and low stress of pests and diseases. They also require constant watering (I know - I have a coffee plant and he is a thirsty B).
That Goldilocks zone exists in one very specific place on Earth - the so-called Coffee Belt hovering around the Equator, between the Tropics of Cancer and Capricorn. Setting up a coffee farm on the Kansas plains is simply not an option. If we want to keep feeding our coffee crack habit, we need to import that beautiful bean.
WHAT YOU CAN DO: Members of Congress have introduced the No Coffee Tax Act, which would restrict coffee tariffs to the levels they were on January 19, 2025. This would provide much-needed relief to U.S. coffee importers, some of whom have paid hundreds of thousands of dollars in tariffs this year.
As coffee contracts for harvests are set months in advance, the Act may not produce an immediate reduction in price, but it would help those who rely on the coffee industry to better plan for the future. It would also give a green-light to those who have postponed their purchases due to the additional tariff expenses.
Just a reminder that the American War of Independence against British rule was kicked into high gear by a tax on tea. You may have heard about the little protest party they threw in Boston Harbor. Will a new American revolution begin over the coffee tariffs?
Sugar & Spice, Not So Nice
BACKGROUND: Americans love our coffee, but we also love our sugar, consuming an average of 126.4 grams of the white stuff per day. Once again, the U.S. ranks at the top of global consumption, a fact that seems sponsored in part by Diabetes.
With added sugars a part of many processed and packaged foods, it's almost impossible to avoid. For those looking to reduce sugar consumption, spices have long been a way to add natural flavor to their foods.
WHAT IT IS: Sugar had an average price of $1.04 per pound in August 2025. That may sound inexpensive, but it's nearly double the $0.59 it cost in August 2019. Considering that sugar is added to so many food items, that additional cost is showing up all over our grocery bill.
The U.S. imports sugar based on a tariff-rate quota (TRQ) system, meaning that shipments receive a lower tariff rate until a quota is met. At that point, a higher tariff rate kicks in until the quota period resets. These quotas are filled on a "first-come, first-served" basis, meaning some importers may miss their window of opportunity for lower rates.
The same droughts that impacted Brazil's coffee harvest also resulted in smaller sugar harvest, reducing the expected yield 9.2% from the previous year. That pushed trading prices up over the summer, but heavy rainfall in India has increased the prospects for a bountiful 2025/2026 harvest. Brazil is also forecasting a better outlook for next year, which could help lower prices.
On the spicy side, about 40% of the spices and herbs we use can be grown in the U.S., but 60% are imported from elsewhere, often because like coffee, they are considered an "unavailable natural resource" that cannot be grown at all, or in sufficient quantities for commercial sale, within the U.S.
McCormick, a "spice giant" that has been around since 1889, has announced they could face $90 million in tariffs this year. A 15% tariff went into effect this summer on most imported spices like vanilla, cinnamon, and black pepper.
Now, to put this in perspective, McCormick is in its own words "a global leader in flavor... With over $6.7 billion in annual sales across 150 countries and territories." Their net sales increased in the 3rd Quarter of this year, and their operating income is up from this time last year. They're fine.
WHY IT MATTERS: However, the same cannot necessarily be said for their purchasers downstream: retailers, food manufacturers, the foodservice businesses, and your average grocery store customer. Yes, this includes restaurants and coffee shops, who are getting a triple-whammy with price increases on coffee, sugar, and spices!
McCormick announced that it would combat the tariff expenses a few ways. These include trying to shift some sourcing to lower tariffed countries. For example, importing vanilla from Indonesia instead of Madagascar, or Brazilian pepper instead of Vietnamese.
They have also considered selective price increases in the 4th Quarter (you know - holiday baking season), reducing package quantities, and discontinuing certain niche products. This could have a ripple effect for bakeries and restaurants, especially those that rely on them for sourcing the less commonly available spices.
WHAT YOU CAN DO: Forewarned is forearmed, as they say. If you are a holiday baker, begin stocking up now and beware that grocers may not run holiday sales like in years past. This may require some recipe adjustment, where possible.
As with coffee, there is a push in Congress to exempt these "unavailable natural resources" from tariffs, but until that kicks in (and possibly after because corporate greed), you may still be paying higher prices.
Also, ain't nothin' happening until the Evil Keebler Elf recalls his Republican House members to Washington, opens Congress back up for work, and swears in the duly elected Representative from Arizona, Adelita Grijalva.... but we digress.
Disappearing Milk
WHAT IT IS: Finally, you may (or not) noticed that certain products are giving you less bang for your buck. Some milk companies like A2, Darigold, and Pioneer Pastures are now packaging their product in 59 oz containers, which look almost identical to their 64 oz (half-gallon) predecessors. The problem is that they have 8% less product.
WHY IT MATTERS: This is a practice known as "shrinkflation", where the quantity of product sold "shrinks" while the price remains the same. This is, in essence, a price increase, albeit a less obvious one, because the price per unit (ounce, pound, gram, etc.) will rise and you may need to purchase additional quantities in order to get the amount of product you need.
For example, if a recipe calls for a half-gallon of milk, that is 64 oz. If the milk is being sold in 59 oz. containers, you will be 5 oz short, so you will need to purchase a second container or milk. That has now doubled the cost of this item in your recipe and you may or may not have need of the remaining 54 oz in that second container.
We have seen shrinkflation happen over the years with ice cream (64 oz containers are now 25% smaller at 48 oz, or 1.5 quarts), orange and fruit juices (128 oz gallon is now 30% smaller in an 89 oz container), chips, cereal, crackers, and this list goes on. Don't even get us started on the mathematical gymnastics of paper products with their triple axel, double loop, mega sit-spin rolls. WTF even is that???
WHAT YOU CAN DO: Take a closer look at the items you frequently buy the next time you go grocery shopping. Are they still the same quantity? Have they changed their packaging? The answer may not be obvious until you look at the weight or volume.
Ultimately, if this is one of your staple food items, there may not be much you can do. We all need to eat! You can be more conscious of how these changes are impacting your costs and consumption. Decreases of 8% to 30% are going to be felt. There may be other brands that offer better price-per-unit deals without reducing quality.
What are your thoughts on this pumpkin spice sadness? Let us know!
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Rayna, Money Culture Disruptor & Financial Inclusion Advocate
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