What Does the USDA Coffee Production Forecast Say?

The USDA forecast puts Brazil's 2023/24 coffee production at 66.3 million 60-kg bags, with Arabica up 12.8 percent to 44.9 million bags and Robusta down 6.1 percent to 21.4 million bags. Colombia is set to recover to 11.5 million bags on better climate and sunlight, while Vietnam's output continues to fall as weather turns unfavorable and farmers switch to other crops.

El Nino is driving the split, pressuring Brazil and Vietnam while benefiting Colombia. Brazil's total bean exports are projected at 43.9 million bags, down from 45.4 million, though still 22.3 percent above 2022/23. Colombia's exports are estimated at 12 million bags even as import demand remains, and Arabica gains in Brazil partly offset weaker Robusta volumes.

The El Niño phenomenon continues to disrupt global weather patterns, causing diverging production prospects among major coffee-producing countries. The USDA recently released its assessment report on the 2023/24 coffee production for Brazil, Colombia, and Vietnam, with each country showing a different trajectory: Brazil's Robusta faces a decline, while Arabica is expected to recover with growth; Colombia's production is rebounding due to improved climatic conditions, but import demand remains; Vietnam continues to decline due to unfavorable weather and farmers switching to other crops. Overall, El Niño is putting pressure on coffee production in Brazil and Vietnam, while Colombia has become one of the few beneficiaries. Below are the detailed data and analysis.

Recently, the USDA released its report on the 2023/24 coffee production for Brazil, Colombia, and Vietnam. Due to the El Niño phenomenon affecting global weather patterns, the impact on coffee-producing countries varies, and future production will see changes.

Brazil

According to the report from the Agricultural Affairs Office in Brazil, Robusta production is expected to decline, with Brazil's coffee production for the 2023/24 (July to June) marketing year dropping to 66.3 million bags (60 kg/bag).

Due to increased planting area and higher yields, according to the forecast, Arabica production is up 12.8% compared to the previous season, with an estimated production of 44.9 million bags. Robusta production is estimated at 21.4 million bags, 1.4% lower than previously estimated and 6.1% lower than the previous season. Therefore, total coffee bean exports for 2023/24 (July to June) are projected at 43.9 million 60-kg bags, down from the previous 45.4 million 60-kg bags. Because stock market prices were below attractive levels, coffee trade flows at the beginning of this marketing year were lower than expected. As a result, exports in 2023/24 are expected to be 22.3% higher than those in 2022/23.

Colombia

Due to improved climate and sunlight caused by the El Niño phenomenon, which is favorable for Colombia, coffee production will recover to 11.5 million 60-kg bags. With lower rainfall and fertilization rates, the 2023/24 coffee production is currently revised to 10.7 million 60-kg bags.

Given the expected higher production, coffee exports for 2023/24 are estimated at 12 million 60-kg bags. In contrast, to meet local demand, Colombia will import approximately 2.5 million 60-kg bags of coffee, mainly from Brazil, due to higher inventory and price competitiveness.

Vietnam

According to the report from the Agricultural Affairs Office in Hanoi, due to climate change and unfavorable weather conditions caused by El Niño, Vietnam's 2023/24 coffee production has decreased by 3.8 million bags, with total production dropping to 27.5 million bags.

In addition, due to unfavorable weather conditions leading to a low survival rate of coffee cherries, as well as some farmers switching to more profitable fruit trees, coffee production in 2022/23 is expected to drop to 27.2 million 60-kg bags. Based on declining inventories, coffee exports in 2023/24 are projected at 25 million 60-kg bags.

In summary, due to the impact of the El Niño phenomenon, the USDA expects coffee production to decline in Brazil and Vietnam in the future, while Colombia's coffee production will increase.

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