Why coffee drinkers are celebrating National Coffee Day

Consumers may be more in the mood to celebrate National Coffee Day today at their local Dunkin' Donuts (DNKN), Krispy Kreme (KKD), Peet's Coffee & Tea or Wawa because getting their java fix has gotten much cheaper in recent months.

J.M. Smucker (SJM), the biggest U.S. roaster which makes Folger's and Dunkin' Donuts brews, announced in July that it would cut prices by 6 percent. Rival Kraft (KHC) followed suit with a 5.8 percent price cut for its Maxwell House and Yuban brands. Coffee prices have plunged more than 47 percent on the New York futures market to $1.20 per pound since their peak last year and don't appear to be headed up anytime soon, according to coffee analysts.

One reason for the price decline is the devaluation of the currencies of Brazil and Colombia, the two leading producers of Arabica beans, which is tracked by the futures market.

Brazil's economy is in especially dire straits. Unemployment there has hit a 5-year high as a corruption scandal continues to dog President Dilma Rousseff. The coffee market has also been hurt by drought conditions in Latin America's most populous country.

"Brazil and coffee prices went from a dollar in November 2013 to about $2.15 a quarter later," said Keith Flury, head of coffee research at Volcafe, a unit of EDF Man Holdings Ltd, in an interview with CBS MoneyWatch. "They continued to stay at high level until the fourth quarter of 2014 when they reached almost $2.25. Since then, coffee prices have been on a pretty clear trajectory lower."

Volcafe recently slashed its forecast of Brazil's production for the 2015-2016 harvest season to 48.3 million bags, down 3.6 million bags from its May estimate because the average size of the beans of the harvest was much lower than expected. That would be the smallest coffee crop since the 2011-2012 season.

Netherlands-based Rabobank recently slashed its average price forecast for the fourth quarter to $1.27 per pound from $1.38 per pound because of concerns about dry weather in Brazil and Colombia.

"In Brazil, farmers have been willing to sell," said Carlos Mera, a coffee analyst at Rabobank, in an interview with CBS MoneyWatch. 'They have been selling stocks from previous crops. Exports have been very, very high despite production levels not being particularly high."

Customers of Starbucks (SBUX) were hit by a price increase on some drinks in July, which the company said was a reflection of other costs such as rent. The Seattle-based company is a major player on the higher-end specialty market, which operates separately from the futures market.

For now, U.S. consumers can drink and be merry since many of the companies celebrating National Coffee Day are giving their brew away for free. The "holiday's" origins aren't clear. According to Joseph DeRupo, a spokesman for the National Coffee Association, a trade group, and the event evolved "organically" without any help from the industry. He wasn't sure how it started or how long it's been around.

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    Jonathan Berr is an award-winning journalist and podcaster based in New Jersey whose main focus is on business and economic issues.