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1Modeling the impact of 2026-2029 ENSO cycles on Brazil's biennial coffee yields.
Coffee production has long played a historically important role in both Brazil and the global market. At the beginning of the 20th century, coffee was so central to Brazil’s economy and political structure that presidential power was shaped by the so-called Café com Leite politics, an alliance between the coffee-producing state of São Paulo and the dairy-producing state of Minas Gerais.
Its influence also extended to the country’s agricultural geography. The 1975 “Black Frost,” one of the most severe climatic events ever to affect Brazil’s coffee sector, devastated production in Paraná and effectively ended the state’s leadership in the crop. The event accelerated the migration of coffee production northward, particularly to Minas Gerais and Espírito Santo, which remain key producing regions today.
Today, the primary climate risk is not frost, but heat and drought driven by the El Niño-Southern Oscillation (ENSO). With a new El Niño forecast to emerge by mid-2026, the risk window aligns dangerously with the critical September-to-November flowering phase (florada principal) for the 2026/27 harvest. Not sure if it is clear to everyone, but a fruit is preceeded by a flower.
Coffee production follows a strict biennial cycle, Arabica Coffee is more intense than Robusta coffee biennial cycle. The 2026/27 crop is expected to be a "high" year, with baseline projections nearing 72 million bags (60kg). However, El Niño disrupts this potential. Historically, Arabica yields drop ~5% in moderate El Niño years, while severe events (like 2023/24) can drive 12–15% losses 1. Robusta (Conilon) is even more sensitive, averaging a 10% drop.
Based on these historical sensitivities, we modeled three El Niño scenarios against the 2026–2029 crop bienniality:
Strong El Niño (Red): A deep disruption to the 2026 flowering window would cut total production by ~13%, bringing the 2026 harvest down to ~62.6 million bags. This also drags on the 2027 low-yield year as trees recover from acute thermal stress.
Average El Niño (Orange): A standard event (-6% net impact) trims the 2026 peak to ~67.6 million bags, muting the positive biennial effect but allowing a faster recovery for the 2028 high-yield cycle.
Light El Niño (Blue): A marginal event (-2% impact) leaves the 2026 harvest largely intact at ~70.5 million bags.
It is important to compare our assumptions with those of leading research firms. As shown in the table below, their estimates are broadly aligned with our view and provide a solid foundation for assessing a wider range of scenarios.
The table was developed by Gustavo Matias, Coffee Trader.
Brazil’s 2026/27 coffee crop is expected to be strong, with production potentially reaching very high levels. However, a large crop also places significant stress on coffee trees, which makes weather conditions even more important.
If adverse weather occurs while trees are already under pressure from a heavy production cycle, the impact could extend beyond a single harvest. Coffee trees often need more than one crop cycle to fully recover, which means that expectations for a fully recovered crop by 2028/29 may be overly optimistic.
Our model indicates that weather-related stress could affect production by up to 10 million bags. This would have a material impact on coffee prices, especially because the global coffee balance sheet has already been under pressure over the past five years.
So the question is: how much more are you willing to pay for coffee?
If you have not thought about it yet, it may be time to start.
Belo AI
Jun 16