Author: Qahwa World – Managua

Source: USDA Foreign Agricultural Service – Report NU2026-0003
Date: May 20, 2026

Nicaraguan Coffee Output Falls 8% in 2026

The USDA Foreign Agricultural Service office in Managua forecasts Nicaraguan coffee production (including Robusta) for marketing year 2026/2027 at 2.4 million 60 kg bags, 8% below the recent high of 2.6 million bags.

Although farmers reported good flowering in March and April 2026, the high probability of El Niño in the second half of 2026, typically associated with droughts in Central America, could significantly impact grain filling, quality, and yield.

Fertilizer costs have risen 25% due to global shipping disruptions in the Strait of Hormuz, presenting another factor that could reduce the crop.

FAS Managua estimates total production for 2025/2026 at 2.56 million bags, down 4% from the previous year. An extended canícula (mid‑summer drought in July and August) impacted grain filling in some low‑altitude regions. Despite lower production, farmers characterized the 2025/2026 harvest as highly successful due to record‑breaking prices; exporters paid up to $290 per bag for exportable coffee.

The industry largely avoided significant labor shortages as a more balanced harvest cycle eliminated typical peaks in worker demand, though some regions still reported shortages affecting harvest completion. One large farmer estimated losing 30% of his harvest due to lack of coffee pickers.

El Niño and Higher Fertilizer Costs Threaten Next Season

NOAA has forecast a 62% probability of El Niño (potentially a “Super El Niño”) developing by mid‑2026. This weather event is associated with droughts in Nicaragua and the region, which could significantly reduce yields and increase pest vulnerability. Meanwhile, fertilizer prices have risen 25% in the first half of 2026 due to global shipping disruptions in the Strait of Hormuz, adding further pressure on growers.

Beyond weather risk and rising input costs, coffee exporters are concerned that Brazil’s projected 23% increase in Arabica production in 2026/2027 may create the largest global surplus in five years and drive prices down by as much as 35%, undermining farmer profitability. Despite these challenges, the coffee industry remains optimistic, and FAS Managua believes Nicaragua will continue supplying high‑quality coffee in the years ahead.

Planted Area and Labor Shortages

FAS Managua projects planted area for 2026/2027 to remain unchanged at 143,000 hectares, with harvested area slightly lower at 141,000 hectares due to labor shortages resulting from increased outbound migration over the last five years. There are approximately 45,000 coffee growers cultivating about 143,000 hectares, of which 7,000 hectares are planted with Robusta varieties. More than 85% of Arabica coffee farms are in North Central Nicaragua (departments of Jinotega, Matagalpa, and Nueva Segovia), while Robusta production is concentrated in the Southern Caribbean Coast Autonomous Region.

According to industry contacts, more than 600,000 Nicaraguans (10% of the population) have fled the country since 2018, worsening labor shortages in the agricultural sector. One large farmer estimated losing 30% of his harvest due to lack of coffee pickers.

Table 1: Nicaragua Coffee Production, Supply and Distribution (1,000 60 kg bags)

Exports and Key DestinationsFAS Managua estimates Nicaraguan coffee exports will reach 2.25 million bags in 2026/2027, reflecting the anticipated production decline. The United States was the largest market for Nicaraguan coffee in 2024/2025, accounting for 35% of all exports. Most of these shipments are high‑quality Arabica beans demanded by specialty coffee roasters and cafes. The European Union is the second‑largest market, with approximately 32% share, where buyers particularly seek organic and fair‑trade coffees. Exporters are exploring opportunities to expand sales into China, as the United States and Europe are considered mature markets with limited growth prospects.Table 2: Nicaraguan Coffee Exports by Destination (60 kg bags)Policies and Structural ChallengesLaw 853 (Law for the Transformation and Development of the Coffee Sector), enacted in 2013, is one of the government’s main policies to support coffee growers. It levies a fee on each exported 60 kg bag, averaging $4 per bag in 2025/2026. Industry sources estimate the law has collected more than $40 million since 2013. However, growers have mixed opinions about its impact; some have benefited from the renovation fund, while others view the export fee as a financial burden.In contrast, in 2019 the government imposed taxes on fertilizers and agrochemicals for the first time, with import duties reaching up to 30% for certain products. This development diminishes profitability gains from earlier tax exonerations and reduces growers’ access to essential inputs like fertilizer. Coffee employs more than 330,000 people along the value chain, making it one of Nicaragua’s most important economic activities.Frequently Asked Questions

How much coffee will Nicaragua produce in 2026/2027?

Production is forecast at 2.4 million 60 kg bags, down 8% from the recent high of 2.6 million bags.

What is causing the expected decline?

A high probability of El Niño causing drought, plus a 25% increase in fertilizer costs due to shipping disruptions in the Strait of Hormuz.

What are the main export destinations for Nicaraguan coffee?

The United States (35%) and the European Union (32%) are the largest markets, followed by Belgium, Germany, and Canada.

How many farmers and how much land are involved?

Approximately 45,000 farmers cultivate 143,000 hectares, including 7,000 hectares of Robusta.

How does Brazil’s production increase affect Nicaragua?

Brazil’s projected 23% rise in Arabica output could create a global surplus and push prices down by up to 35%, hurting Nicaraguan farmer profitability.

Author: Qahwa World – Managua | Source: USDA Foreign Agricultural Service – Report NU2026-0003 | Date: May 20, 2026

Item	2024/2025 Official	2025/2026 Estimate	2026/2027 Forecast
Planted Area (1,000 HA)	143	143	143
Harvested Area (1,000 HA)	141	141	141
Total Production (1,000 bags)	2,560	2,560	2,440
Total Exports (1,000 bags)	2,410	2,420	2,250
Domestic Consumption (1,000 bags)	160	160	160
Ending Stocks (1,000 bags)	130	130	85
Country	2022/2023	2023/2024	2024/2025
United States	1,113,500	850,266	895,066
Belgium	280,180	427,268	470,917
Germany	101,075	116,693	221,633
Canada	73,393	78,167	81,383
Italy	98,275	72,767	89,933
Mexico	10,218	4,467	82,183