Production Declining Amid Structural Challenges

El Salvador’s green coffee production is forecast to fall to 542,000 60-kilogram bags in market year 2026/27, a 7.5% drop tied mainly to El Niño weather amid broader structural challenges, according to the latest USDA Foreign Agricultural Service annual report.

[Note: This is part of an ongoing series of DCN stories that explore USDA FAS country-level coffee reports, which are produced by different authors and field offices around the world.]

Production Falls, Climate Risks Persist

El Salvador’s coffee area is forecast to hold steady at 118,000 harvested hectares. Yet FAS said climate vulnerability, limited credit and low profitability continue to stall renovation, with some farmers shifting to cocoa and white corn or selling land for development.

Production for 2025/26 is estimated at 586,000 bags after torrential rains in December 2025 caused ripe coffee cherries to drop, reducing yields and quality during milling. The 2026/27 forecast points to a further 44,000-bag drop, largely due to expected weather problems during flowering and harvest.

Labor, Debt and Old Trees Weigh on Farms

Labor shortages remain a structural constraint as rural workers move toward urban construction jobs. The report said shortages are limiting pruning, weeding, fertilization, pest control and harvest work.

The Salvadoran Coffee Institute (SCI), the government-backed coffee authority, has increased pest monitoring and added coffee quality-control labs. Yet the report said many trees are more than 25 years old, while roughly 30 million high-quality, rust-resistant plants would be needed annually over 10 years to renovate coffee areas, according to the Salvadoran Coffee Association.

Exports Rise on High Prices

Exports are forecast to rise from 535,000 bags in 2025/26 to 543,000 bags in 2026/27. Green coffee accounts for most of that total, with green exports forecast at 505,000 bags, soluble exports at 25,000 bags and roasted coffee exports at 13,000 bags.

The United States is expected to remain the leading destination, representing about half of Salvadoran coffee exports in 2025/26. Belgium is projected to account for about 11%, followed by Canada, Italy, Germany, Japan, Saudi Arabia and the UK.

Ending stocks are forecast to fall to 79,000 bags in 2026/27, down from 147,000 bags in 2025/26, as producers continue selling into relatively higher prices.

Policy and Financial Strains

The report also points to unresolved financial strain, including debt tied to the Coffee Trust program, limited access to private bank credit and processing costs of about $100 per hundredweight of green bean equivalent.

Earlier government efforts have included a broader coffee rescue program and a $45 million Inter-American Development Bank loan used to support smallholder farmers, but FAS said broader sector challenges remain unresolved.

“The sector’s challenges have led to a decline in jobs in coffee-producing regions, contributing to rural migration to urban centers,” the report states. “Additionally, more coffee farms are being abandoned or converted to basic grain production, further exacerbating the country’s environmental challenges by reducing forestation and impairing water retention.”

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