According to the U.S. Department of Agriculture’s (USDA) Brasilia bureau, coffee production costs in Brazil have risen 12% per pound in 2013/14 to 187.56 cents per pound. These increases are due to higher costs involving insurance, transport, and depreciation, and have brought the cost of producing coffee in the country much higher than the market price of $106 per bag, or .80 cents per pound. Taking into account the latest New York futures prices, Brazilian coffee growers stand to lose $4 billion. Brazil’s government has released R$1 billion to buy 3 million bags of coffee however growers are demanding more support including government stock building equal to 50% of exports and allowing growers to pay off debts with coffee instead of cash. The USDA has placed Brazil’s Arabica harvest at 39.2 million bags and Brazil’s robusta harvest at 13.9 million bags for a total harvest of 53.1 million bags. Conab has estimated a total harvest of 47.5 million bags. Historically the USDA has claimed that Conab underestimates production that does not fit a credible balance sheet.
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