[Homeroast] coffee price hikes smarting

ricky carter rickylc99 at gmail.com
Sat Feb 12 21:32:03 CST 2011


You can all thank Ben Bernanke and Quantitative Easing 1 & 2-  The fed
(Federal Reserve Bank) pumps between 7 and 10 billion a day of liquidity
into the martket (hot cash )that has to chase something. This is also the
reason the stock market is rising at such an unnatural rate for a such a
weak economy and the dollar is falling.

No sense blaming the "speculators", they  get that hot cash from somewhere
and it is the deliberate policy of the Federal Reserve that is putting it
into their hands.

If some one gave you 10 billion a day, basically for free, (can you say
between 0 and .25% interest rate?) and said go have fun, where do you think
you might put the money, particularly when the act of giving you the cash
devalues the dollar?  why commodities of course, and it doesn't really
matter what the commodity is.

I just want to eliminate the amorphous disembodied "speculator" and give you
the name of the man and the institution truly responsible.  Ben Bernanke,
Federal Reserve.

On Sat, Feb 12, 2011 at 8:02 PM, Edward Bourgeois <edbourgeois at gmail.com>wrote:

> Much similar is happening in all areas of food. Small dairy farms that
> process their own and small farms that sell local both retail and
> wholesale are deal with the same thing. I sold lamb and wool into the
> commodity market years ago and it was a constant roller coaster ride.
> Then when I went local the customer were always comparing to market
> prices for the good and bad. Many time the market price was more on
> speculation than it was on the realities of weather, input costs, true
> availabilities or anything that really made sense. Hopefully the money
> grubbers will find something new to play with soon but food seems a
> hot one right now and probably for at least the near future.
>
> On Sat, Feb 12, 2011 at 3:25 PM, Tom & Maria - Sweet Maria's Coffee
> <sweetmarias at sweetmarias.com> wrote:
> > 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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> >>
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> >
> > --
> > -Tom
> >
> ___________________________________________________________________________
> > Sweet Maria's Coffee  -  Oakland, California  -
> http://www.sweetmarias.com
> >
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>
>
>
> --
> Ed Bourgeois aka farmroast
> Amherst MA.
> http://coffee-roasting.blogspot.com/
>
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