Arriving at a Price

Typically, there are two main ways to price coffee: Differential pricing; and Fixed or Outright pricing

There are advantages and disadvantages to both these methods for each component of the supply chain.

 

 

Rich Farmer, Poor Farmer

With the recent fall in the market price of coffee, many of us in the coffee industry have worried about the consequences that low prices – prices well below costs of production – will have on the millions of small and mediumsized coffee growers that supply over 50% of the worlds coffee. In an effort to better understand the problem we are facing, I decided to dig deeper into the profitability of coffee farming in Latin America over the last decade.  

 

 

Low Prices, Risky times

For the 2017-18 harvest, the International Coffee Organization (ICO) estimated global production of green coffee at 158 million 60kg bags, an excess of 2.4 million bags compared to annual global consumption. For the 2018-19 harvest, the gap is expected to widen even further due to bumper crops in Brazil and Vietnam.

 

 

Rich Farmer, Poor Farmer

With the recent fall in the market price of coffee, many of us in the coffee industry have worried about the consequences that low prices – prices well below costs of production – will have on the millions of small and mediumsized coffee growers that supply over 50% of the worlds coffee. In an effort to better understand the problem we are facing, I decided to dig deeper into the profitability of coffee farming in Latin America over the last decade.  

 

Low Prices, Risky Times

For the 2017-18 harvest, the International Coffee Organization (ICO) estimated global production of green coffee at 158 million 60kg bags, an excess of 2.4 million bags compared to annual global consumption. For the 2018-19 harvest, the gap is expected to widen even further due to bumper crops in Brazil and Vietnam.

 

Making it Work as Well as it Can

“The goal is to Move Coffee Forward, by creating the best sustainable supply chain.” – Alejandro Cadena

A Tale of Two Customers: Caravela Coffee and the Rethinking of the Coffee Import Model

A Tale of Two Customers: Caravela Coffee and the Rethinking of the Coffee Import Model

Arriving at a price

Arriving at a price

Rich Farmer, Poor Farmer

Rich Farmer, Poor Farmer

Low Prices, Risky Times

Low Prices, Risky Times

Making it Work as Well as it Can

Making it Work as Well as it Can

Discovering the Source

Discovering the Source

A Mutual Evolution: Caravela Nicaragua’s William Ortiz, on helping people grow coffee, and how coffee helps people grow

A Mutual Evolution: Caravela Nicaragua’s William Ortiz, on helping people grow coffee, and how coffee helps people grow

The High Price of Getting the Best from Ecuador

The High Price of Getting the Best from Ecuador

Victims of Exchanging Currencies – Who Should Take on this Risk?

Victims of Exchanging Currencies – Who Should Take on this Risk?

A Pilgrimage to the Future

A Pilgrimage to the Future

Why We’re Investing in World Coffee Research?

Why We’re Investing in World Coffee Research?

The Making of a Champion

The Making of a Champion

Peru, an Unpolished Diamond in Coffee Production

Peru, an Unpolished Diamond in Coffee Production

Investing in Education: Investing in People

Investing in Education: Investing in People

How Roasters Can Influence the Supply Chain

How Roasters Can Influence the Supply Chain

Aromas: More than Just a Coffee Competition

Aromas: More than Just a Coffee Competition

FOB vs. EXW – Two Buying/Shipping Methods for Your Green Coffee

FOB vs. EXW – Two Buying/Shipping Methods for Your Green Coffee

Checking Your Cultural Bias at the Door

Checking Your Cultural Bias at the Door

Sample Roasting vs. Profile Roasting

Sample Roasting vs. Profile Roasting

How to Keep Records of your Costs of Production?

How to Keep Records of your Costs of Production?

¿Cómo llevar un registro de costos de producción?

¿Cómo llevar un registro de costos de producción?

Why and How to Estimate Costs of Production in a Coffee Farm?

Why and How to Estimate Costs of Production in a Coffee Farm?

¿Por qué y cómo estimar los costos de producción en una finca cafetera?

¿Por qué y cómo estimar los costos de producción en una finca cafetera?

Supply Chain Logistics – The Clockwork of Coffee

Supply Chain Logistics – The Clockwork of Coffee

1st SEMESTER HARVEST 2018 SURVEY

1st SEMESTER HARVEST 2018 SURVEY

Forecasting Green Coffee Purchasing

Forecasting Green Coffee Purchasing

From Origin, With Love

From Origin, With Love

2017 Greenhouse Gas (GHG) Emissions Report

2017 Greenhouse Gas (GHG) Emissions Report

How Joe Coffee and the Guarnizo family work together to ensure everyone wins

How Joe Coffee and the Guarnizo family work together to ensure everyone wins

2016 Belgravia Fermentation Experiments

2016 Belgravia Fermentation Experiments

Impact Report 2017

Impact Report 2017

Impact Report 2016

Impact Report 2016

Drying in Peru: the Final Step in Quality Improvement

Drying in Peru: the Final Step in Quality Improvement

Passion for Coffee: Nicaragua

Passion for Coffee: Nicaragua

Passion for Coffee: Guatemala and Salvador

Passion for Coffee: Guatemala and Salvador

“Despacito”: How Coffee Should Be Dried

“Despacito”: How Coffee Should Be Dried

Why we are a B-Corp

Why we are a B-Corp

Specialty Coffee Thought Leaders: Interview with Alejandro Cadena

Specialty Coffee Thought Leaders: Interview with Alejandro Cadena

Partner Farm Purchasing and How it Impacts Sustainability

Partner Farm Purchasing and How it Impacts Sustainability

Pedro Claros and Has Bean: The Story of a Thousand Samples

Pedro Claros and Has Bean: The Story of a Thousand Samples

How One Roaster Can Impact a Whole Community

How One Roaster Can Impact a Whole Community

When is it time to harvest?

When is it time to harvest?

Just In Time Inventory

Just In Time Inventory

Baristas Are Your Final QC Check

Baristas Are Your Final QC Check