Valentine's Day Special: The Cost of Love (and Cocoa)

 

Valentine’s Day is an expensive holiday. While some joke that greeting card companies invented the day to juice profit margins, the current cost of a gift is no laughing matter. Gold prices are hovering near record highs (a topic for a future post), but that heart-shaped box of chocolate will cost you roughly 231% more than it did four years ago.

What is driving this "Cocoa-nomics" crisis?

To understand the price spike, you need to look at West Africa. Côte d’Ivoire and Ghana produce roughly 60% to 70% of the world’s cocoa. Over the last two years, this region was hammered by record-breaking rains that rotted pods on the trees, followed by a brutal El Niño-driven drought. The 2023/2024 season saw production plunge by 25%, leading to the lowest global yields in decades.

This was compounded by a massive spike in production costs. Following geopolitical tensions in 2022, fertilizer prices skyrocketed as Russia and Belarus, two top exporters, were largely sidelined. Many small-scale farmers couldn't afford to nourish their trees, leaving plants weak and susceptible to disease.

Trade policy has added a new layer of bitterness. Since the U.S. implemented a 10% blanket tariff on imports, the cost of bringing beans into the country has risen significantly. Because cocoa isn't grown commercially in the U.S., manufacturers can't buy American to avoid the tax; they simply pay the duty and pass it on to you. For high-end European chocolate, those tariffs have been even steeper due to retaliatory trade measures. Even as wholesale cocoa prices started to dip in early 2026, retail prices remain sticky because makers are still working through the expensive inventory they bought during the peak of the shortage.

Why don’t they just plant more trees?

Supply is notoriously lagged. A newly planted cocoa tree can take up to six years to reach maturation, meaning today's high prices can't be solved by a quick harvest next month.

Is there anything else driving the cost of my Valentine’s Day candy cost?

It’s not just cocoa. In 2024 and 2025, droughts in India and Thailand led to production shortages and strict export bans on sugar. While global supplies have rebounded in 2026, U.S. manufacturers are insulated from those savings by the U.S. Sugar Program, which uses quotas to keep domestic prices nearly double the global average. Layer a 10% blanket tariff on top of that, and you have a double tax on every bar.

Looking Ahead: From Cocoa to Cans

As we look toward the rest of 2026, this serves as a cautionary tale for the construction industry. We are seeing a classic example of downward price rigidity. Even when an underlying commodity (like cocoa) crashes, the retail price remains high due to labor costs, expensive back-stock, and new tariff layers.

In our world, we see the same trend with materials like glass or specialized HVAC components. Just because a raw material cost drops doesn't mean your subcontractor's quote will follow suit tomorrow. In this higher-for-longer environment, timing your procurement is everything, but don't expect the market to forget its peak prices overnight.

A Sobering Note for March

If the price of candy has you reaching for a drink, I have some news for next month. As we approach St. Patrick’s Day, Guinness is facing its own squeeze. Between wholesale hikes and the new 50% global tariff on aluminum, which has sent the cost of a single can from 15 cents to 35 cents in some markets, your pint is feeling the same inflation fatigue as your chocolate box.

Be glad Guinness doesn’t grow on trees! Until then, enjoy your chocolate, just consider it a long-term capital investment.