Latest / Inflation and Your Money with Fexingo: Protecting Purchasing Power and Beating Inflation / Inflation Is Quietly Eating Your Coffee Habit
Transcript
- Lucas: So, Luna, I was grabbing a coffee this morning, and the barista charged me four dollars and seventy-five cents for a medium latte. And I thought, okay, inflation is one thing, but this feels personal. Luna: Right? I've noticed my usual order creeping up too. But is that just the local shop, or is there something bigger going on? Lucas: It's bigger. And actually, the data backs it up. Coffee futures have jumped to their highest level in over three years, and corn and wheat are at their highest in more than three years too. That's not just your neighborhood café being greedy. Luna: So what's driving it? Is it the same supply chain mess we've been hearing about, or something new? Lucas: A lot of it is supply. Coffee is a crop, and it's sensitive to weather. We've had drought in Brazil, frost in parts of Colombia, and then there's the longer-term climate pressure. The International Coffee Organization has been flagging tighter supplies for a while. Luna: And tighter supply means higher prices at the auction level. But how does that trickle down to my latte? There are like three middlemen between the farm and my cup. Lucas: Exactly. So you've got the green bean price, then roasting, then shipping, then the café's overhead. And each layer is feeling its own inflation. Shipping costs are still elevated, energy prices are up, and labor costs are higher because baristas need to pay rent too. Luna: So it's not just the bean, it's the whole chain. But is the consumer actually seeing the full impact, or are roasters absorbing some of it? Lucas: Some are absorbing, but margins are thin. And we saw a recent headline that corn and wheat prices are spiking, which matters because it affects feed costs, and that can ripple into other food prices. Coffee is just one commodity in a broader food inflation story. Luna: So if I'm budgeting, should I just cut out my daily latte? Or is there a smarter way to think about this? Lucas: You don't have to cut it out entirely, but you might want to treat it like a line item. The Bureau of Labor Statistics tracks coffee prices specifically, and they've been climbing. But there are ways to smooth the hit—like buying whole beans and grinding at home, or rotating where you buy. Luna: That's practical. But I read something about coffee being an inflation hedge? Is that actually a thing? Lucas: It's a thing in the sense that coffee futures track inflation over the long run. But for most of us, we're not buying coffee futures. We're buying cups of coffee. And the price of that cup is going up faster than the overall CPI in some months. Luna: Makes sense. So what's the one number to keep an eye on? Is it the CPI, or something more specific? Lucas: Look at the CPI for food away from home, which includes your café latte. That's been running above the headline number. The latest CPI reading has overall inflation cooling a bit, but food and beverage prices are still sticky. Luna: Sticky is right. I remember when a drip coffee was a dollar. Now it's two-fifty minimum. Lucas: And that's exactly the kind of quiet erosion we talk about on this show. It's not just your coffee—it's your rent, your insurance, your subscriptions. But coffee is a daily reminder. Luna: Speaking of reminders, I keep meaning to mention this—we've been doing these episodes for a while now, and a lot of listeners have asked how we keep it ad-free. Honestly, it's thanks to a handful of people who chip in monthly. Lucas: Yeah, it's pretty simple. We don't run ads, and we want to keep it that way. So if you've found these conversations helpful, you can support the show at buy me a coffee dot com slash fexingo. It's a small way to keep the lights on, and it genuinely helps us keep making episodes. Luna: And we don't say that lightly. It's just a low-key thing for those who want to. No pressure. Lucas: Right. So back to coffee—one thing I've been doing is buying a larger bag of beans and freezing half. It keeps the freshness and cuts the per-cup cost by a good bit. Have you tried that? Luna: I haven't, but I might. Does freezing actually work without ruining the flavor? Lucas: It works if you freeze them in an airtight container and only thaw what you need. The key is avoiding moisture. That way you're not paying the café markup every single day. Luna: Good tip. But what about the bigger picture? If coffee prices keep climbing, is there any relief in sight? Lucas: That depends on the next harvest. Brazil's next crop is a big swing factor. If the weather cooperates, we could see prices ease by late next year. But with climate patterns getting more erratic, it's hard to bet on that. Luna: So for now, we just have to plan for higher coffee costs. I guess that's the inflation reality. Lucas: Exactly. And the same logic applies to other staples. We saw corn and wheat prices jump recently, which will likely show up in your grocery bill soon. So it's worth being aware of what's in your basket. Luna: And maybe that's the takeaway—not to panic, but to be mindful. A little awareness goes a long way in protecting your purchasing power. Lucas: Well said. And if you have your own tips for beating inflation on everyday items, we'd love to hear them. But for now, enjoy your coffee—just know what's in it.