Nicaragua’s green coffee production is forecast to fall 4.7% to 2.44 million 60-kilogram bags in market year 2026/27, with El Niño-related drought risk and rising fertilizer costs threatening yields, according to the latest USDA Foreign Agricultural Service annual report.
The report forecasts exports falling 7% to 2.25 million 60-kilogram bags. Domestic consumption is expected to remain flat at 160,000 60-kilogram bags as migration, higher food costs and weak economic conditions offset growth in urban coffee culture.
[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.]
Weather and Fertilizer Threaten Yields
The 2026/27 forecast would put production below the 2.56 million bags estimated for 2025/26 and the 2.66 million bags estimated for 2024/25. The forecast includes 2.3 million bags of arabica and 140,000 bags of robusta.
Farmers reported good flowering in March and April 2026, but FAS said a likely El Niño in the second half of the year could hurt quality and yield. The report cited a 62% probability of El Niño developing by mid-2026, with drought risk across Nicaragua and the broader Central American region.
Fertilizer costs have also risen about 25% due to global shipping disruptions, while some smaller distributors have reportedly begun restricting sales or requiring advance payment. Those pressures may make it harder for small and medium-sized growers to maintain input use heading into the next crop.
Renovation Remains Limited
Planted area is forecast to remain unchanged at 143,000 hectares, while harvested area is forecast at 141,000 hectares. FAS said harvested area is slightly lower because of labor shortages tied to increased outbound migration.
Since the 2013 coffee leaf rust outbreak, growers have replanted about 20,000 hectares of arabica, equal to roughly 14% of total coffee area. Yet FAS said many farms have not kept up with the ideal renovation pace of about 5% per year due to limited long-term credit, price volatility and restricted access to newer rust-resistant varieties.
Nicaragua produces mostly arabica, which represented roughly 94% of production in 2025/26. More than 85% of arabica farms are in North Central Nicaragua, primarily in Jinotega, Matagalpa and Nueva Segovia. Robusta remains concentrated in the Southern Caribbean Coast Autonomous Region, near a major mill in Nueva Guinea.
Policy Adds to Cost Pressure
Nicaragua’s 2013 coffee-sector transformation law created a renovation fund through a fee on every exported 60-kilogram bag of coffee. The fee averaged $4 per bag in 2025/26, when international prices exceeded $300 per bag, and industry sources estimate the law has collected more than $40 million since 2013.
Growers remain divided on the program, according to the report, with some benefiting from the renovation fund and others viewing the export fee as a financial burden.
FAS also noted that fertilizer and agrochemical taxes imposed in 2019, including import duties of up to 30% on some products, have reduced access to essential inputs.
Exports Fall From Strong 2024/25
Exports are forecast at 2.25 million bags in 2026/27, down from 2.42 million bags in 2025/26. The United States was Nicaragua’s largest market in 2024/25, accounting for 35% of exports, followed by the European Union at about 32%. Exporters are also exploring China as a potential growth market.
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