8legs: Brandywine global investment management

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Curveballs: Food For Thought

Coffee prices reached an all-time high in 2025 due to supply shocks from Brazil and Vietnam.
Brazil and Vietnam together contribute about 55% of global coffee sales, intensifying price pressures.
U.S. firms like J.M. Smucker have absorbed tariff effects, keeping margins stable through 3Q25.
The rollback of Brazilian import tariffs is expected to ease margins in the near term.
Food costs, including coffee, account for a modest share of the US CPI, with core services driving inflation.
Droughts in Brazil and Vietnam have sharply reduced supply, contributing to price surges.
The article frames coffee price moves as a mix of supply shocks and tariff effects, not tariff-only explanations.
The reporting emphasizes long-term value and risk in commodity markets and consumer exposure.
The piece notes that coffee margins may face compression despite current stability.

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