We investigate food security in three villages in rural Ethiopia for smallholder farmers growing staple crops and coffee, and facing variable coffee and commercial input prices. The surveys were conducted in the coffee growing region of Oromia (Jimma Zone). Commercial input use among these smallholders remains sporadic, although most farmers use them occasionally. A major impediment to systematic usage is the price of these inputs. Policies lowering the unit cost and increasing the local availability of commercial inputs would be useful to systematically boost production and income generation. These smallholders rely on a major coffee cooperative to market their coffee. The cooperative helps with transportation and easing market participation decisions—it provides better prices and some market information. Many farmers rely on credit and banking services offered by the cooperative. The food insecure households are more likely to be led by a female head and to be constrained by extremely small land holdings than food-secure households. These food insecure households tend to work outside of their own farm more often than food-secure households, but in lower-return activities. In our sample, food shortages and household size do not seem to be related, although food shortages are less likely in households with more children. Despite the fast growing economy of Ethiopia, many of these households still face considerable impediments to improve their economic livelihoods and market participation because of bad roads, poor telecommunication infrastructure and limited land. Basic schooling seems to reach most of their children.