If Coffee Bean Prices Fall, Why Would Your Flat White Stay the Same Price?

If coffee bean prices rise, your morning coffee can become more expensive. So if bean prices fall, surely your flat white should get cheaper?

It sounds reasonable. But that logic assumes the increases were passed on in full in the first place.

That is the missing part of the conversation.

Australian roasters have documented absorbing higher costs, delaying price changes and operating with thinner margins. Where that has happened, a fall in green coffee costs can give a roaster the chance to recover some breathing room before it creates any scope for cheaper wholesale coffee.

As a café operator, I would not automatically expect our roasted beans to become cheaper simply because green bean prices fell. If our wholesale price stays the same, there is no bean-cost saving arriving at the café to pass on. In that situation, with other costs unchanged, the price of your cup would stay the same too.

How long has the pressure been building?

There is no single date when green coffee was last “stable”. Different coffees move differently, and there have been rises and retreats along the way. But this pressure goes back much further than the most recent headlines.

The International Coffee Organization’s June 2021 market summary recorded a 33.2% rise in its composite indicator between October 2020 and June 2021. That puts a significant earlier upswing roughly five to six years behind us as of September 2026.

A further sharp escalation came in 2024. In its January 2025 pricing notice, Sydney’s Sample Coffee cited ICO figures showing the December 2024 indicator was 70.5% higher than a year earlier.

The useful timeline is therefore years of cost pressure and volatility dating back to 2020–21, followed by another major surge in 2024 and early 2025. It would be misleading to describe that as an uninterrupted rise, or to assume every roaster absorbed costs for exactly the same period.

Roasters have been carrying part of the bill

There are concrete Australian examples of what absorbing costs looks like.

In a 3 February 2025 explanation to customers, Perth roaster Leaf Bean Machine said its green bean costs had increased by $4 per kilogram during Covid. It waited until February 2022 to increase wholesale prices, and then passed on $2 per kilogram.

The business reported further green bean cost increases by December 2024, which it initially absorbed, before announcing another wholesale adjustment for early 2025.

Sample Coffee’s January 2025 notice likewise explained that its previous price adjustment had been in May 2022. Its new prices had to account for both the green coffee spike and other inflation accumulated since then.

And in March 2025, Australian roaster myCuppa described severely squeezed margins after trying to contain price rises, saying a market retreat was something it was hoping for.

These businesses have different histories. What they demonstrate is that a wholesale price increase can arrive after a roaster has already carried some of the cost for a considerable time.

For a café, the adjustment may appear as one noticeable increase on an invoice. Behind it can be several years of accumulating pressure. That does not mean every increase restored the roaster’s previous margin.

A lower cost can restore a margin without lowering the selling price

A simple hypothetical example helps explain this.

Imagine a roaster sells a product for $30. The direct production cost rises from $20 to $26, but the selling price initially stays at $30. The amount left to contribute towards overheads and profit has fallen from $10 to $4.

The roaster then raises the selling price to $33. That restores the contribution to $7, still below where it started.

If the direct cost later falls from $26 to $23 and the selling price remains $33, the contribution returns to $10.

The customer sees an unchanged selling price. The roaster has recovered its earlier dollar contribution. It has not suddenly gained an extra $3 on top of its original position.

These are illustrative numbers, not our supplier’s accounts or industry averages. They also describe the amount left before overheads, not net profit. But they show why a cost reduction after a squeeze can be a recovery rather than a new windfall.

It improves the economics of future sales. It does not automatically repay the earnings forgone while costs were being absorbed.

What that means for the café and your cup

At Dad and the Frog, we buy roasted coffee from Madding Crowd. We do not buy green beans directly at a global commodity benchmark.

If green coffee becomes cheaper for a roaster, but that improvement is needed to rebuild its margin, the wholesale price we pay can reasonably remain unchanged.

The sequence in that situation is straightforward: the roaster’s input cost eases, its margin begins to recover, and the café continues paying the same price for roasted beans. There is no automatic reduction in the café’s cost per cup.

That is why I would expect the customer’s coffee price to remain unchanged on that basis. A market headline about cheaper green beans does not mean the café is quietly keeping a saving.

There is also a timing issue. Leaf Bean Machine describes securing coffee through contracts lasting six to twelve months. Existing commitments mean a market decline may take time to reach a roaster’s actual costs at all.

And green beans are only one input. Roasting, wages, premises, packaging and freight still have to be paid for. At the café, milk, barista time, equipment and service costs also remain part of the price.

Holding the price can be a worthwhile outcome

I understand why customers want relief. A daily coffee adds up, and people are entitled to question the bill.

But after a period of absorbed costs, an easing market may first help prevent another increase. That can benefit regular customers even when the number on the menu does not fall.

When someone chooses our café in Surry Hills, I want the explanation to be honest. We should not claim an invoice has become cheaper without checking it. Equally, we should not assume a roaster has become more profitable than before simply because one cost has eased.

If sustained reductions eventually reach our own costs, that would be a different conversation. My point is that a green bean price fall alone does not establish that they have.

Whether you join us for breakfast in Surry Hills or a coffee over a long brunch, the product still needs to earn its price through quality, consistency and service.

A healthier supply chain helps make that possible. Farmers, roasters and cafés all need enough return to keep doing their work properly.

So would I automatically expect a cheaper flat white when green coffee prices fall? No. Where roasters have spent years absorbing part of the increases, I would first expect an opportunity for their margins to recover. For the café and the customer, the immediate outcome may simply be the same coffee at the same price.

Join us at Dad and the Frog Café, 96 Fitzroy Street. Explore our coffee, breakfast and brunch menu, or book a table for your next visit.

Dan