People need to start paying more for bad coffee. Coffee consumers need to realize that the principal determiner of the price of coffee is the Commodity Exchange on Wall Street. Prices are based on supply, demand, speculation for coming harvests and then built-in differentials for importers to account for fuel and other import costs, including their margin. For the last twenty to thirty years, Specialty Coffee has been on a mission to connect price to quality to incentivize farmers to improve the quality of coffee being produced and raise the value of coffee and price outside of the C Market. This idea has grown, and prices in Specialty have increased; however, production costs have also risen with the requirements to produce higher-quality coffee. Coffees that are made and paid for in this Specialty system still represent the minority of coffee being purchased.
The majority of farmers are still being paid below the cost of production events when producing Specialty grade coffee. This onerous fact manifests itself in the slashing of coffee plants and relocation of farmers to urban centers where there are more opportunities for earning income. The desperate reaction by farmers leads to the decimation of coffee-growing lands around the world. When coffee growers have no perceived value in the land, why would they feel compelled to stay? In turn, this results in less coffee being grown, leading to reduced supply and higher prices for coffee in the long run. This is a fatalistic formula for a future without coffee despite the level of quality.
At some point, the determination of value and price for coffee has to separate from quality grades and the C Market. Price will have to enter the realm of ethical business practices or, at the very least, functional business practices. First, the cost of production, labor and transport should determine the base price. Then premiums can be factored in for quality, and other value adds like certifications and logistics.
Changing to this system would mean that farmers would at least be able to cover their costs and stay in business, producing the lowest viable product. This layer of security will create value and incentive to continue to be in business and allow a more significant portion of coffee-growing lands to remain operational. Access to the capitol will also allow growers and producers to invest in improvements to their process and collectively raise quality levels. Great coffees will continue to be made for premiums. The cost of coffee will continue to rise no matter what we do, so we may as well start paying more now to preserve as much of the coffee-growing lands and active farmers as possible to maintain our supply.
So, importers, start paying more for your green coffee based on the business of your producing partners and their cost of goods. Roasters start paying more for bad coffee and even more for good coffee. For those of you brewing at home, you will have to pay the most for lousy coffee in order to preserve coffee growing lands we have today.
Written by Jake Leonti, F+B Therapy
Mr. Leonti has worked in coffee for over twenty years with disciplines at every link of the value chain from barista to roasting, green grading and importing. Jake is the current Editor-in-Chief of Coffee Talk Magazine, columnist at Santé Magazine, member of the Roasters Guild and host of the Food and Beverage Therapy podcast