Ethiopia produces some of the world’s most sought-after coffee, including the Yirgacheffe and Sidamo varieties that specialty roasters charge premium prices for. In 2023, Ethiopia was the world’s fifth-largest coffee exporter. Ethiopian farmers, the people who plant the trees, pick the cherries, and process the beans, received on average between $0.80 and $1.20 per kilogram of washed green coffee.
That kilogram, once exported, roasted, packaged, and sold as retail beans in the United States, would sell for roughly $30 to $60. As a prepared espresso drink in a specialty cafe, the yield per kilogram is around 120 to 140 cups, at $5 to $7 each. One kilogram of Ethiopian coffee, bought for $1 at the farm, generates $700 to $1,000 at the retail end of the chain.
Here is where the money goes.
The farmer sells to a local collector or cooperative, typically at prices set by the Ethiopian Commodity Exchange, which floors prices but also compresses them. The collector sells to an exporter. The exporter handles processing, certification, export logistics, and takes a margin. An international green coffee broker then connects the shipment to buyers in consuming countries, adding another layer. An importer receives and warehouses the coffee in the destination country. A roaster buys from the importer, roasts, packages, and brands the product. A cafe or retailer sells to you. Each step has real costs: transport, warehousing, labor, equipment, certification, marketing, rent. None of the intermediaries is simply extracting rents for doing nothing.
But the compounding effect is severe. A cafe’s largest cost is not the coffee itself. Rent, labor, and equipment in urban markets like New York or London routinely account for 60 to 70 percent of revenue. The coffee itself might represent 15 to 20 percent of the cost of a prepared drink. Of that, the beans might be 10 to 12 percent. The farmer’s share of the original bean price is a fraction of that 10 percent.
This structure is not unique to coffee. Cocoa, tea, vanilla, and most commodity agricultural crops show similar patterns, where primary producers in low-income countries supply raw materials that capture most of their economic value further up the chain, in processing, branding, and distribution.
The response to this from within the industry has been the specialty coffee and direct trade movements. Some roasters now buy directly from specific farms or cooperatives, cutting out the middlemen and paying prices that can be three to five times the commodity benchmark. Certifications like Fairtrade set price floors and invest in community development. These approaches reach perhaps 5 to 10 percent of global coffee production.
The global coffee market processes around 10 million tons of beans per year. The structural incentives that keep farmer prices low are embedded in international commodity trading systems that predate most of the farms that supply them.
Your $6 latte is not primarily an injustice. It is a window into how global supply chains distribute value, and the answer is: not evenly, and not toward the beginning of the chain.
