Why have coffee prices dropped dramatically — 82% in 4 years — while lattes remain just as expensive? (Link via Atlanticblog)

• Vietnam entered the coffee trade and Brazil upped production
• Coffee production decisions lag behind price changes because the coffee tree is on a 2+ year cycle
• While the number of specialty coffee shops has grown from about 450 in 1991 to more than 10,000 today, total coffee consumption in the U.S. has actually fallen slightly
• Demand for coffee is relatively inelastic (a 10% price increase reduces consumption by about 2%)
• Actual coffee is a very small component of the cost of a latte (roughly 10 cents on a $2 cup)