Thursday, June 03, 2004


good news: coffee prices rising

long-time readers know i talk often about the world-price depression known as the "coffee crisis." about how these low prices are bad for coffee farmers and coffee lovers alike.

recently prices have been on the uptick. whether that will be sustained is as yet unknown, although for months importers and brokers ("greenies," because they sell green, unroasted coffee) have been suggesting that coffee prices would rise for technical market reasons.

i heard one greenie predict in march that coffee on the new york exchange would move to US$1; while a london market expert, the russian prince serge cantacuzene, appears to have predicted 956 a metric ton there.

today i had the privilege of speaking to an independent roaster/retailer (a "brownie") of my acquaintance on the subject. he notes that when coffee prices are too low, the coffee farmers can't afford to take care of the coffee properly.

they are forced to neglect the coffee somewhat to minimize their losses. the result of this: lower-quality coffee. not good.

so a fair increase in price is good for both farmer and consumer, in that we consumers get a much better product for just a fraction more and farmers of course don't have to live in miserable poverty.

my friend believes that coffee is good quality and fairly priced for both parties in the general range of about US$1.20-1.40 a pound. while this sounds like a big price increase, actually it's not bad.

remember, in general, to grow high-quality coffee costs a farmer about US$0.90-0.95 a pound. considering that these farmers have been accumulating big debts for years now, and have to pay their workers, as well as invest in the coming crop and make capital improvements to their farms, US$1.20 isn't bad.

the fair-trade set price, after all, said to give farmers a living wage, is US$1.26.

that's why when i read articles like this today, warning of higher coffee prices, i don't flinch. many of the super-premium specialty coffees i most enjoy already cost more than this, and yet they often retail for less than or around US$10 a pound.

for example: don schoenholt's gillies; oren bloostein's oren's daily roast; david haddock and peter g's counterculture; holly & jessica's batdorf; doug zell and geoff watts' intelligentsia; kevin cuddeback and mike white's gimme; mark inman's taylor maid; and george howell's terroir. let's say coffee prices were to rise a lot: 40%!

even at US$14 a pound, coffee would remain a fine-beverage bargain. after all, a pound of coffee makes about 40 6-oz cups.

a US$10 a pound coffee costs you at home just US$0.25 per cup. at US$14, why that's a mere US$0.35! who's going to stress out over a slim dime when you're getting a superior brew?

devoted readers who've patiently suffered thru my long rants on coffee quality and purity know that the stuff in the supermarket cans isn't all it could be. so if anything bothers me about the possibility of coffee price increases, it's that the so-called "big four" -- sara lee, kraft, nestle, p&g -- will be raising their prices disproportionately.

because you know they won't be investing in better quality beans. . .they're more likely to be squeezing quality more than ever to pocket the increase. . .(devoted readers may recall i actually predicted this in april.)

let me echo scaa chief ted lingle's famous statement: "buy whole beans." from your local independent coffeehouse or roaster, please!

posted by fortune | 10:06 AM | top | link to this | email this: | | | 0 comments