Barista Magazine

DEC 2018 - JAN 2019

Serving People Serving Coffee Since 2005

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Page 90 of 107

91 What can we do about it? The issue of coffee prices is certainly a frustrating slog, so much so that it can seem at times like a problem that's impossible to solve. However, there are practical steps that those using the C Market regularly take to ensure better prices for coffee growers. Here are three examples: • Certifi cations. Yes, certifi cations can be expensive for farmers to attain and keep up. If producers make the investment in certifi - cations, however, the resulting prices will typically be above the C price. Fair Trade U.S.A., for example, has a minimum price of $1.40 per pound, plus a $0.20 premium that goes toward a produc- er or co-op's social programs, while organic has a $0.30 premium. "This means that if you if you buy a fair-trade–organic coffee, the minimum per-pound price is $1.90—no matter how low the C Market is," says Kayd Whalen, senior vice president of InterAm- erican Coffee. • Price-risk-management tools. Many importers establishing contracts for coffee between coffee roasters and coffee producers use price-risk-management tools that protect both parties from market fl uctuation. Using these tools, roasters can set a guaran- teed minimum price for farmers that protects against a potential dip in the market. "That to me is a very responsible way to handle the C," says Jorge of Sustainable Harvest. "I'm seeing that move occurring more and more so growers don't get paid below a certain level." • Covering cost of production. In recent years, a growing trend among specialty roasters and importers is establishing with the grower the cost of production for a specifi c coffee, then paying a price above that. "When the C Market is low, the specialty industry can use cost-of-production prices as the purchasing base price, espe- cially when a low futures market trading price makes physical coffee available for under the cost of production," says Rachel of Ally. How can we exist within the C? As discussed in the beginning of this article, specialty-coffee roast- ers and importers often have direct relationships with farmers and contracts that dictate prices far above the C Market. Many modern importers tout the importance of relationships between two parties in creating sustainable livelihoods for coffee growers. "Traceability to a co-op, an association, or a single farm provides opportunities for buyers and producers to build relationships that can be benefi cial to both, year over year, and can lead to conversations about premiums," "It's not easy, but the best thing we can do for producers is to give them education, something no one can take away from them. Teach them how to sail rough waters." —Javier Faus, director of export company Bourbon Specialty Coffees; Minas Gerais, Brazil "No matter the quality of the coffee you produce, the market is always driven by C level. Most coffees are traded in differential to the C Market, according to origin, certifications, and qualities. With this in mind, we need to understand that low prices on the C represent lower prices for almost all qualities." —Luiz Rodrigues, owner of Fazenda California, Paraná, Brazil Download entire issues of Barista Magazine to your phone and tablet FOR FREE! ¼ GET THE BARISTA MAGAZINE APP!

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