To all coffee lovers,
This morning our team had an opportunity to read “Low Coffee-Bean Prices Brew Trouble for Farmers” an article that was recently published by Julie Wernau and Robbie Whelan, editors for The WSJ. Their editorial highlights growing concerns surrounding the discrepancies associated with production costs and prices accepted for coffee commodities around the world. As a company that prides itself on social responsibility and is actively involved in the buying and supplying of internationally crafted coffee products, we felt an obligation to articulate a response.
Wernau and Whelan highlight a 2017 study conducted by Cornell University at the instruction of Fair Trade USA, an organization focused on the responsible certification and compliance of goods produced throughout the global supply chain. According to the study the average cost of coffee production was placed at roughly $1.40 per pound. Wernau and Whelan state, “Coffee prices have been below that price for 20 straight months, the longest stretch since 2008, according to FactSet data.” Even more concerning, prices are forecasted to tumble further into the new year. According to research conducted by the U.S. Commodity Futures Trading Commission, “Prices now hover around $1.00 a pound, poised to notch a 20% drop.” “It is a situation many expect to persist: The number of speculators betting on coffee prices has hit a record high in recent weeks.”
Currently at market prices well below the costs of production, and at their lowest levels since the 2008 financial crisis, coffee producers have been forced to settle for a selling price roughly $0.40 below average production cost.
We asked ourselves, how is that sustainable? It simply is not.
Coffee producers across the globe have been inclined to join cooperatives that attempt to guarantee farmers a ‘fairly traded’ price. These cooperatives have been bombarded by producers seeking to lock in a minimum price of roughly a $1.40 per pound for their harvests. According to Wernau and Whelan, “there isn’t enough demand for fair-trade coffee among coffee-consuming nations.” In fact, “Only about 5% of coffee imports to the U.S. are fair-trade certified.”
Here at Mocina Coffee, we pride ourselves on paying our partner farmers substantially more than fair trade certifications stipulate. $1.40 per pound of coffee is simply not enough. Since our inception in 2017, we pledged to pay our partner coffee producers a better price. As of today, we are proud to have paid our partners $2.00 - $3.50 more than the average market value. Our commitment highlights a percentage increase of roughly 142 - 257% in prices per pound of coffee offering. Moreover, all our coffee varieties are entirely processed at the farm of their cultivation. Everything from picking to roasting is completed by the hands of the farmers. This creates an avenue for work throughout the entire calendar year, not just for harvest periods. That proves to be a win for our people, and ultimately for our planet.
We implore you to keep these facts and figures in mind the next time you enjoy a cup of coffee.
President & Co-Founder | Mocina Coffee