Why chocolate prices are scary high

Shoppers may be in for a bit of a fright this Halloween with retail candy prices up by more than 8% so far this year.

Part of that upswing is driven, of course, by chocolate — which, in turn, is driven by the cocoa prices that have more than doubled since the beginning of 2024, according to a recent analysis from the Wells Fargo Agri-Food Institute.

For that trend, consumers can thank extreme weather and a host of other concerns.

While supply chains might not be the main source of discussion, they’re nonetheless chock full of scary stories. Much of the global cocoa supply comes from major producers like Ghana and Côte d’Ivoire in West Africa, which saw dramatic swings between heavy rainfall and drought in recent years, worsening crop yields on cacao farms and triggering disease.

As a result, the global cocoa supply deficit hit its highest level in more than six decades in the 2023-2024 season.

And while cocoa prices have leveled off since the highs of 2024 — futures neared $13,000 a ton in December — they’re nowhere near where they were pre-pandemic.

David Branch, sector manager for Wells Fargo’s Agri-Food Institute, said: “The downside for consumers is that the candy that is being sold for Halloween was manufactured with cocoa that cost in the $9,000 to $11,000 metric ton kind of range and not today’s prices.”

Cacao farmers are still struggling to produce sufficient crops and are likely looking at another year of reduced yields relative to where they were a few years ago, said Billy Roberts, a senior economist of food and beverage at CoBank’s Knowledge Exchange research division.

That’s all trickled down to manufacturers that were already facing myriad other production cost increases, resulting in higher chocolate prices for consumers. Some companies are also coping by reducing cocoa content in their candy, adding fillers, or cutting back on package sizes.

While consumers will stomach some amount of price hikes for chocolate, “this Halloween season will be very interesting” and test their limits, Roberts said.

“What are in most kids’ pumpkins as they walk around their respective neighborhood?” Roberts asked. “Are they going to be finding a lot of chocolate in there, or are they going to be finding more sugar confections, more gummies and hard candies? I think that will probably tell the tale to manufacturers about how elastic that price sensitivity is.”

So, when does the situation improve?

Higher temperatures and drought are taking a toll on cacao, the plant that results in cocoa pods, as well as many other beloved commodities like coffee — and will continue to do so, according to Michael Hoffmann, a professor emeritus at Cornell University’s College of Agriculture and Life Sciences.