OVERHELM!
So many things are happening everywhere at the same time, and it can be overwhelming. It IS overwhelming. There are days when I truly have to fight to get up and do my day. Sometimes, hopelessness sneaks in, but I know I must keep getting up and putting my heart out there. This is okay to feel at this moment; it’s completely normal to feel overwhelmed.
The coffee world is also going through an intense transition like we have never experienced before. Coffee is traded in the commodities market, a market controlled by the conditions in Brazil for coffee. If Brazil has a high yield, the weather is great, everything is going smoothly, and there is enough volume for all the coffee contracts and beyond, then the price of coffee at the C Market is reasonable (maybe low). If the yield is very low, the weather is awful, and contracts are speculated to default, the price soars. Everywhere in Latin America, we are seeing lower yields, plus the frost and lack of volume in Brazil, which has made the C Market price for coffee skyrocket to levels we have NEVER seen. As a reference, this time last year, the C Market for coffee was at $1.93. Yesterday, the market closed at $4.35!
$4.35 is the BASE price for coffees of any quality. Coffees considered specialty score 80 points or above. Maquina generally purchases coffees that score at least an 85 on the Specialty Coffee Association quality scale. So think about it this way: this means that a coffee scoring 81 points fetches $4.35/lb WITHOUT the costs of insurance and export and other fees - so you can imagine what an 85-point coffee will cost. It is a real crisis for buyers and consumers - but it is a great time for producers if they can find buyers.
However, many folks at origin, specifically cooperatives, have to shrink their coffee volumes due to safety (both physical and financial). When coffee prices are very high, warehouses are full of coffee, and trucks leave the warehouses full to the gills of coffee, nefarious people notice. They will show up armed and take the coffee to sell themselves locally at these high prices or shake down the cooperatives. So many of them shut the doors and keep a minimal amount of coffee to lay low and avoid attention.
Financially, cooperatives pay their members and then hold the coffee until it is sold. When the market is so high, a container of coffee is $184K each—compared to this time last year, when that same container was $83K. That is a huge difference! So, this hurts cooperatives.
Don’t forget to look up. We must remember this world can be truly beautiful.
The fact that everyone at origin relies on the C Market is understandable but not helpful. It never considers the costs of production, quality, or relationships. We need a new model, but as a small roaster, it is incredibly difficult to feel like we are making a difference. It doesn’t stop us from trying. Paying a fair and sustainable price is important, and giving the power back to the producer is a must. There must be balance because, for a long time, all the leverage has been with the buyers of coffee.
Balance is the only way, and this means listening to one another, respecting one another, acknowledging what we know and what we don’t know, and doing everything to come to the table with the goal of understanding each other in good faith and sometimes in humility.
No one knows how this will change the coffee industry in the long run, but buyers have been paying too little for specialty coffee for far too long. This is, in part, the inevitable natural course correction and, in part, the result of commodifying coffee. Commodifying coffee has opened the doors for exploitation, which we can combat by having a real relationship with our producers, making sure we are paying fair prices, and making sure we are coming back year after year and purchasing their coffee. This is true sustainability, understanding the cost of producing something and paying a price that allows the producer to pay their bills, grow their business, take care of their family, and have some reserves in the bank account. And a price that allows the buyer to set a price that would move
the coffee on their end! In turn, they continue to produce a consistent and delicious product that the buyer can rely on year after year. It is that simple, yet we are so far from this ideal scenario. It is a miracle we get to drink coffee every day, and every day I am grateful for it.
Stay the course, keep being your beautiful self, and help your neighbors and community. This is an all-hands-on-deck moment.
***We are trying to move inventory of t-shirts, so check out the lower prices on the website, including hats and tumblers!***
