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As of the end of trading on Tuesday, coffee closed on the ICE at about $1.84 a pound, down from a peak of around $2.12 in the middle of April. In early November, coffee was selling for just over $1 a pound. The rise — and fall — is all related to a drought in Brazil, the world’s largest producer of arabica coffee beans.

An unprecedented drought for this time of year in Brazil has threatened the coffee crop, sending futures prices to more than two-year highs. As prices rose, growers dumped their stockpiles, pulling prices back down. But like all things that cannot last forever, neither will coffee stockpiles.

According to The Wall Street Journal, export sales from stockpiles have now reduced inventories to the point where there is not enough left to top up supply from the crop that is now being harvested. Demand for high-quality coffee will drive prices higher, and by the end of this year we could once again see futures prices of $3 a pound or higher.

Goldman Sachs has forecast its GSCI enhanced commodity index to include coffee at $1.75 a pound, but now says that uncertainty over Brazil’s output may mean that values may exceed that forecast on time horizons out to 12 months.

The International Coffee Organization now estimates that production for the first half of the 2013-2014 crop year will be down by nearly 5%. An El Niño that is forming earlier than usual could also intensify the drought in parts of Brazil and South America. Colombia, the world’s second-largest producer of arabica beans, has experienced sharply higher production this year, but it is more susceptible to a hotter, drier El Niño than is Brazil.

Whether all the bad news from Brazil has been priced into Americans’ favorite coffee beverages remains to be seen. Starbucks Corp. (NASDAQ: SBUX) has not yet raised prices, but it seems inevitable that it will have to do so if prices approach $3 a pound. Even the company’s fixed-price contracts will not be sufficient to insulate Starbucks from substantially higher prices.

Keurig Green Mountain Inc. (NASDAQ: GMCR) may be even more threatened by high coffee prices than is Starbucks. Unlike its competitor, Keurig does not operate retail stores that sell stuff besides coffee. What the company does have is a sugar daddy in Coca-Cola Co. (NYSE: KO), which said this week that it plans to increase its stake in Keurig from 10% to 16%. The two companies are expected to start selling a home soda fountain product called KeurigCold by the end of this year.

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