[Homeroast] coffee price hikes smarting

Tom & Maria - Sweet Maria's Coffee sweetmarias at sweetmarias.com
Sat Feb 12 14:25:27 CST 2011


Its a good question Paul - in fact it's such a good question I will 
be speaking on that at SCAA conference. The market DOES affect Farm 
Gate pricing. It should seem impervious to it since it is negotiated 
person to person, but when the local price to sell coffee fruit 
starts to go up, it's puts pressure on everyone to raise their 
premiums. It's so easy to simply harvest fruit and sell it, and avoid 
all the costs of processing the fruit, drying, milling, etc etc. And 
if a farmer buys cherry from neighboring farms, they have to compete 
directly in the local cherry market. All those local prices are 
guided by the global price to some degree. The fact is, if and when 
the global price collapses we will be paying the same, so would think 
a farmer would see the long term relation as being more important 
that a short term gain for one season. But realistically I can't 
expect them to ignore it. Those who will really suffer this year are 
cooperatives. I can see some not making it, defaulting on contracts, 
etc. That is sad because it reduces the competition, which will hurt 
farmers in the long run. The other problem is quality. If you can do 
less and get more money, many will opt for that. I don't think it 
affects us because of direct relationships and tons of cupping 
quality control to make sure coffees are good - but I think a lot of 
regional coffees, a Costa Rica Tarrazu pooled lot, is going to be a 
lot worse this year. I don't mean to be all doom and gloom, we'll see 
where this goes.


Tom

>Tom,
>
>I'm happy (as I think most of us are) to pay more for Farm Gate 
>coffee.  Does FG
>help keep prices stable, since you negotiate directly with the farmers?
>
>Paul
>
>
>
>
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-- 
-Tom
___________________________________________________________________________
Sweet Maria's Coffee  -  Oakland, California  -  http://www.sweetmarias.com



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