This year everyone is feeling the downturn of the economy and the rising prices. Small businesses are struggling, and every business seems to be raising prices. We've noticed grocery prices increase quite a bit, and of course gasoline is much higher than 1 year ago. Today's blog is a story about a small business in New Mexico explaining their struggle.
Elizabeth Anne Andrews For The New Mexican , Jun 23, 2026
In the heart of downtown Santa Fe, customers still line up at Agapao Coffee and Tea’s Mud Hut for a cup of coffee and conversation.
But many are buying smaller cups these days.
“We’ve had a big increase in 8-ounce sales, which is interesting to me,” said company owner David Black. “People are still coming in, just not spending as much.”
The local coffee company raised its prices by 25 cents in the last 10 months. Black said it was the company’s first price increase since opening. The hike came as coffee prices around the country soar, thanks to tariffs, climate change and lingering market woes from the COVID-19 pandemic.
Agapao, which has sold packaged coffee since 2005, took over a kiosk at St. Michael’s Village West in 2020 and expanded into downtown in 2023. In the time since the company expanded, data from the Federal Reserve Bank of St. Louis shows the price of a pound of ground coffee beans increased from $4.47 in May 2020 to $9.51 in May 2026. “The prices have been going up and up every year,” Black said.
The trend has put pressure on coffee drinkers and on the businesses that serve them.
“It’s been a rough road but we’re getting through it for sure,” Black said Tuesday.
Labor, tariff issues
Coffee prices began to rise in 2020 and 2021. Back then, consumers could buy a pound of ground coffee beans for $4.56, according to national data.
Then came the pandemic and with it, labor shortages affecting the U.S.’s top coffee exporters. Prices didn’t come down after the pandemic ended, however.
Between 2022 and 2023, U.S. coffee prices hovered around $6 per pound. By January 2025, the price of a pound of coffee had reached $7.
Since then, the relationship between the U.S. and its top coffee exporters has become increasingly tense, causing prices to rise more dramatically over a shorter period of time.
On April 2, 2025, President Donald Trump signed an executive order announcing a tariff of at least 10% nearly every country in the world, in response to trade deficits. The U.S. Supreme Court struck down many of the tariffs in February, ruling Trump’s use of the International Emergency Economic Powers Act was unconstitutional. The president issued a less broad series of 15% ”temporary import surcharges” shortly after, with a 150-day end date under the Trade Act of 1974.
Trade relations with several major coffee suppliers have continued to sour.
Vietnam, one of the biggest exporters of coffee beans, received a 46% reciprocal tariff, making it one of the worst affected countries. Indonesia, another top coffee exporter, received a 32% reciprocal tariff.
Brazil’s 10% tariff rose to 50% in July 2025 after Trump announced an additional 40% tax in response to actions taken against Brazil’s former President Jair Bolsonaro. The tariff was modified to exempt agricultural products in November.
Tariffs have placed a significant strain on business owners, Black said, and he bore most of the cost.“It took a lot because I didn’t pass it on,” he said. “I sucked it up.”
Climate change
In addition to economic strain, climate change also affected countries where tropical climates usually allow for healthy coffee bean growth.
A 2015 study published in Springer Nature showed land in Brazil and Vietnam were becoming unsuitable for coffee farming. Last year, Brazil suffered a drought and wildfires that destroyed many coffee plants, The Associated Press reported. Typhoon Yagi in Vietnam also impacted coffee crops. Ethiopia, another top coffee producer, is experiencing significant effects of climate change. A 2023 study in Science Direct said these include changes in rainfall and temperature.
As for Black, he said he will continue to serve customers no matter the obstacles.“We love our customers,” Black said. “We really do. We wouldn’t be here without them. I love what I do.”
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Elizabeth Anne Andrews, a student at New Mexico State University and the editor-in-chief of The Round Up, is a Santa Fe New Mexican and Searchlight New Mexico reporting intern through a fellowship with the New Mexico Local News Fund.
