Cooperative Coffees

The Rising C: Some Potential Hidden Consequences of Higher Prices

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Coffee in Peru

Coffee in parchment. Daily Coffee News file photo.

The recent green coffee market volatility can create a daunting situation for actors throughout the coffee supply chain. On the surface, rising prices are a good sign for farmer incomes, but the reality is that a rapid increase and volatility may make the situation more difficult for many cooperatives and smallholder producers in the longer term.

When C-market prices are historically low — as they had been throughout much of 2018, 2019 and 2020 — they can be expected to move back upward. Yet such volatility tends to cause actors throughout the supply chain — including roasters, importers, exporters, and producers — to counter with drastic measures, exacerbating price volatility.

What are some of the consequences of the most recent rise in the NY C-market price, and how might this impact producers in places like Peru, Brazil, Indonesia, Burundi or Rwanda, where peak harvesting season is approaching?

Deforestation can increase. Producers may become incentivized by higher prices to expand production into primary forested areas with the hope of increasing yields as soon as possible. Yet within the time it takes for a forest to re-grow, prices will ebb and flow many times over.

Coffee quality can suffer. When the market goes up, farmers are more likely to pick their crops and deliver cherry to mills as quickly as possible to take advantage of higher prices. Fast delivery can hamper quality due to lack of selective harvesting practices and meticulous post-harvest practices.

The rising C-market price may encourage strip-picking, meaning the amount of quality coffees available in later months can be diminished. The price differential between red, ripe selective harvests and mixed underripe selections is often not enough to justify selective harvesting when prices are presently high.

Private collectors become competitive. Cooperatives often struggle to afford coffee parchment from their members because they must compete with heavily financed, privately owned buyers who are able to pay higher prices without delay. This can strain cooperative structures and membership benefits.

Ed Canty, the general manager of the United States-based trading cooperative Cooperative Coffees, addressed this issue in a story on price risk management (PRM) tools way back in 2015.

“Independent smallholder organizations always need to pay producers a local expression of the current commodity price to collect coffee. If they do not, producers will sell to someone else,” Canty stated at the time. “Estates pay workers a rate that is not immediately tied to the commodity price of coffee. So their risk of not being able to collect coffee in a rising coffee market is greatly reduced. This allows many Estates to sign fixed price contracts without protecting against the risk of a rising market.”


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When market stability is higher, the tendency is for cooperative members to lean more on their organization for support and benefits. Stability in prices allows for selective harvesting throughout the harvest months, leading to potential increases in quality, which can in turn lead to higher consistent prices, and subsequently more cash for cooperative member benefits. The opposite can take shape when price volatility is higher.

Supporting cooperatives during a time where the C-market prices increase beyond the Fair Trade floor price ($1.40) is arguably as important as supporting cooperatives in times of low prices. Both swings potentially can disrupt the operations of a cooperative and its potential longer-term benefits to members.

Keeping cooperatives strong despite volatile price conditions requires buyers who are committed to maintaining or exceeding a higher floor price. Well-funded large buyers will always win the ‘race to the bottom’ price; yet not all buyers maintain the kinds of commitments cooperatives do to re-invest in those communities. The benefits often end once the C-market spike runs its course.

In addition to finding dedicated buyers, there are a number of price risk management tools that can help strengthen relationships between roasters, importers and cooperatives.

Kraig Kraft, previously of Catholic Relief Services and now with World Coffee Research, penned a series of articles addressing PRM tools and how they might help cooperatives achieve more financial stability.

In short, stability takes time, commitment, communication and trust — virtues that are difficult to come by in a volatile market in which producers have been historically positioned as “price takers.”


Editor’s note: This story was written for Daily Coffee News by Jon Ferguson, the North American Green Coffee Representative for the ElevaFinca Alliance of Cooperatives in Peru and Colombia. Daily Coffee News does not publish “paid content” or “sponsored content” of any kind. Any views expressed in this piece are those of the author and are not necessarily shared by Daily Coffee News or its affiliates.

Source: Roast Magazine

The Lonely Cupper: Reflections on 15 Months of Tasting in Solitude

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coffee cupping app

Cupping from home using a web-based, real-time cupping platform. All images by Matt Damron, used with permission.

It has been one year, three months and 10 days since my part of the world first went into shutdown mode due to the COVID-19 pandemic. To be clear, I have not had COVID-19 (knock on wood); however, its mere existence cast a pall over the cupping table since the dawn of 2020.

Almost overnight last year, the coffee industry dramatically reformed processes and protocols to protect cuppers from contracting a virus that was poorly understood but highly contagious.

The SCA issued new guidelines for a “COVID-friendly” cupping format in March, 2020 involving individual shot glasses, never touching spoons to mouths, and plenty of rinsing. While these recommendations are good at reducing the risk of transmission via swapped saliva, they failed to address the biggest culprit of transmission: the air.

In order to ensure the safety of our co-workers and families while performing our most important daily professional functions, we at Cooperative Coffees made a decision to have all staff work from home. This included yours truly… the Lonely Cupper.

As many U.S. coffee operations are returning to some semblance of operational normalcy, this may be a good time to reflect on the realities, challenges and, yes, rewards of professional coffee cupping at home.

Setting Up at Home

Setting up a home lab may seem like a daunting task, but it turned out to be much easier than I expected. The first step was figuring out how to roast at home. After we toyed with the idea of bringing our 2-barrel Probat sample roaster to my home, our General Manager Ed Canty suggested instead that we try an Ikawa machine. These roasters are essentially built for home and small labs, taking up less than a square foot of space and operating on standard 110-volt electricity.

home roaster

The Ikawa sample roaster hard at work at the small home setup.

Lucky for us Equator Coffee Roasters, a nearby member of Cooperative Coffees, was kind enough to loan us their Ikawa so that I could run some tests and make sure the roast profile would be on par with what we’re used to getting from the Probat. After a satisfactory round of testing, we decided the Ikawa would meet our needs just fine and away we went.

Producers began sending samples directly to my door; landed samples from the warehouse were sent straight to me; and I brought home tools for measuring moisture, water activity and density. My kitchen officially became a laboratory.

After a few months with the borrowed Ikawa, we went a step further and purchased one for the coop, making it the centerpiece of our new roast-from-home directive. The process went something like this: A pre-ship or landed sample arrived at my door; I thanked the delivery person (from a distance), brought it inside, disposed of the outer packaging, washed my hands and got to work. From my kitchen, I could roast, grade, measure, and cup as usual.

Calibration

Now, you might ask, “How did you stay calibrated?” or “What if there was a quality issue? Shouldn’t it be verified by a second opinion?”

Well, I’m very glad you asked.

A key component in our ability to relocate the lab was our web-based cupping platform, which allowed us to cup from any location and track that information within our system.

coffee cupping

coffee cupping

I could check cup reports of coffees from the same producers over the last several years to compare. If an issue arose where I needed a second cupper to verify my findings, I could simply roast up a little extra coffee, drop it off locally to our sourcing manager, Felipe Gurdian, or mail it to an experienced coop member, and they could cup remotely using our platform, with results reported in real time.

This was all made possible with the online cupping platform, which we are currently using in a pilot program involving participating coop members, producer partners and staff throughout the world. The hope is that with this technology, we’ll be able to cup together across any physical distance in both Spanish and English, share results in real-time, and foster important discussions all from the comfort of our own homes (or safely isolated in our labs).

If time, budget and interests allow, we could regularly cup the same coffees within the coop or with producers, working toward greater calibration between staff, members and producer partners.

Moving Forward

There are things I missed about cupping in groups: There’s the immediate feedback after finishing a table, or the subtle gestures like nods of silent excitement (or disappointment) that help make a more immersive and social experience.

On the other hand, cupping alone removes any whiff of professional distraction or outside influence, freeing the mind to focus entirely on the task at hand.

Yet most importantly, perhaps, cupping alone for 15 months taught me that I am indeed never alone — that calibration is a necessary act of connection, and that the language of coffee transcends borders and boundaries. I have learned to better trust the results of web-based cupping, a sharpened new tool that is likely to help carry us forward in a 2021 and beyond that will most certainly be less lonely.

Source: Roast Magazine

The Extraction is A Lovely Countertop Addition

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Manual Coffee 4

Minneapolis green coffee importer Cafe Imports has announced a new sourcing program with Colombian coffee exporter Banexport that responds to the ongoing coffee price crisis. The program, called Farm Select,…

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