Coffee Jitters

All over the U.S. last week, restaurant owners who have long since increased the 5-c-; cup of coffee to 10-c- were talking of raising the price to 15-c-. Many were already charging a minimum of 25-c- or more for coffee served without food at the mid-morning break. Said Executive Vice President Ben Regan of Nationwide Food Service, Inc., which runs restaurants throughout the nation: "You don't make any money on coffee. It's just sort of an accommodation." With wholesale prices already up 20-c- a lb. since a year ago, retail prices were expected to rise as high as $1.20 before long.

The price rise in coffee was a simple matter of supply & demand. As the song said, "there's an awful lot of coffee in Brazil," but now there isn't nearly enough.

Chief reason: a frost last July, which wiped out almost one-third of the crop.

Since then wholesale prices have soared from 56 1/2-c- to a record 72 1/4-c- a lb. (though they eased off last week).

The fast jump in coffee, plus a similar rise in the price of cocoa, has been mainly responsible for the rise in the overall Dow-Jones commodity index, which last week was the highest in three years. The cocoa rise was caused not only by increased demand and bad weather but by the "Swollen Shoot" (a virus disease) cocoa-tree blight in Africa. As the price went from 30-c- to almost 60-c- a lb. in a year, the Government considered releasing some of its vast stocks of butter to users of cocoa butter for candy, but gave up the idea, since butter's low melting point would make it impractical.

The U.S. coffee shortage was complicated by another factor. In recent years, U.S. buyers have had little trouble buying up all they wanted of the Brazilian crop.

But now Germany and other European nations, well along the road to recovery, are back in the market. As a result, Brazil's store of coffee for export has dropped to 7,600,000 bags v. 10,200,000 bags at the same time last year. In another few years, as new and bigger plantations come into production, the coffee shortage will probably ease. But until then, Americans can expect to pay more for it.

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