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June 2012
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Coffee fungus raising prices for some blends

WASHINGTON - The U.S. government is stepping up efforts to help Central American farmers fight a devastating coffee disease - and hold down the price of your morning cup.

At issue is a fungus called coffee rust that has caused more than $1 billion in damage across the Latin American region. The fungus is especially deadly to Arabica coffee, the bean that makes up most high-end, specialty coffees.

Already, it is affecting the price of some of those coffees in the United States.

"We are concerned because we know coffee rust is already causing massive amounts of devastation," said Raj Shad, head of the U.S. Agency for International Development.

He was expected to announce today a $5 million partnership with Texas A&M University's World Coffee Research center to try to eliminate the fungus.

But the government isn't doing this just to protect our $4 specialty coffees, as much as Americans love them. The chief concern is about the economic security of these small farms abroad. If farmers lose their jobs, it increases hunger and poverty in the region and contributes to violence and drug trafficking.

Washington estimates that production could be down anywhere from 15 percent to 40 percent in coming years, and that those losses could mean as many as 500,000 people could lose their jobs. Though some countries have brought the fungus under control, many of the poorer coffee-producing countries in Latin America don't see the rust problem getting better anytime soon.

So far, major U.S. coffee companies have been able to find enough supply to avoid price increases. But some smaller outfits already have seen higher prices, said Ric Rhinehart of the Specialty Coffee Association of America.

Rhinehart said the worst-case scenario is that consumers eventually will pay "extraordinarily high prices for those coffees, if you can find them at all."

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