The trend: Even before the Trump administration enacted near-universal 10% tariffs on most imported goods, coffee roasters, CPG manufacturers, and others were already scrambling to manage surging costs for key staples like coffee and cocoa.

Over the past three years, futures prices for cocoa—the main ingredient in chocolate—skyrocketed 316%, while coffee and orange juice both jumped nearly 58%—putting steady pressure on margins and pricing.

Why is this happening: An array of challenges—including drought, plant disease, and extreme weather—have slashed crop yields and pushed prices sharply higher.

• Cocoa farmers in West Africa, who produce 70% of the world’s supply, are grappling with adverse weather widely linked to climate change. For example, drought conditions grip over a third of Ghana and the Ivory Coast, fueling cocoa’s dramatic price surge.
• Coffee producers are also feeling the strain from a challenging mix of climate volatility and geopolitical disruptions. Farmers in Brazil, the world’s top coffee exporter, have struggled with damaging frosts and severe droughts, while attacks on commercial vessels in the Red Sea have forced some coffee shipments to detour around the Cape of Good Hope—extending delivery times and adding shipping costs.
• Orange growers in Florida face similar headwinds. The USDA projects US orange production will fall to its lowest level in 88 years this year. Florida’s crop alone is expected to plunge 33%, hurt by unfavorable weather and persistent citrus disease.

Our take: Climate change is poised to keep disrupting agriculture, driving up costs and forcing companies that depend on key commodities—like Hershey, Nestlé, and Starbucks—to rethink their pricing strategies. And that’s before accounting for added pressure from tariffs.

For example, Nestlé plans to raise prices on its Toll House morsels, baking cocoa, and fudge kits starting June 23 because of rising commodity costs, per Bloomberg. With no end in sight to these challenges, more companies are likely to follow suit in a bid to protect their margins.

Go further: Check out our tariff coverage, including our Live FAQ: The Impact of Trump’s Tariffs on Consumers, Businesses, and Trade.

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