The next coffee crisis
Posted by TheShot on 21 Apr 2010 | Tagged as: Beans, Consumer Trends, Fair Trade, Robusta
One of the long running jokes among the (these days: masochistic) fans who follow Italian soccer is that — at least according to the Italian sports media — teams tend to go from “crisis” to “crisis” several times in a given season. If a top-caliber team doesn’t win for two straight matches, sono in crisi (or “they are in crisis”). It’s as if the Italian media have a mission to create melodrama.
We think about that sometimes when we hear about the new coffee crisis: global warming, or climate change if you prefer. If you weren’t keeping score, the last coffee crisis was rooted in the collapse of coffee prices. With the 1989 dismantling of what was essentially a cartel among coffee producing nations, mass market coffee greens went from a high of about $1.50/lb to an all-time low of $.46/lb in 2003 — a pricing collapse catalyzed by the influx of mass-produced, low-grade Vietnamese robusta. It was this crisis that gave root to Fair Trade and other economic initiatives — to stave off the inequities of the coffee trade from spreading poverty and putting coffee growers out of business.
However, today coffee has a new crisis. From papers [pdf, 622k] presented at the 2007 SCAA conference to some of the key talks at the conference last weekend (not to mention posts here going back to 2006), there’s been a lot of chatter lately about how the forces of climate change are reducing crop yields, eradicating available land use for coffee production, and extending the breeding grounds of harmful coffee plant pests. This month’s CoffeeTalk cover story comes with the apocalyptic headline, “Can this really be the end?” and the quote:
Nearly all of the specialty coffees in Latin America are sold and shipped. There simply are no quality Latin coffees left except Brazilian and those are going fast.
The fifth horseman: Robusta?
Something is seriously going on. But is it a bit premature to declare the end of coffee? There’s real danger in being false alarmist.
Whether it is quality coffee or anchovies off the coast of Chile, one of the biggest safeguards for a product’s survival is a group of consumers willing to pay a decent price for the good stuff. So when we read lamentations that coffee is going to disappear, and that coffee consumers are going to flee for cheaper energy drinks, we get the sense that these are primarily concerns for the lower grade coffees we generally avoid anyway.
Yesterday we attended a Meet the Producers event hosted by the Epicenter Cafe and Barefoot Coffee Roasters and got to test this theory. There we talked with Barefoot’s “Chief Espresso Officer,” Andy Newbom, to ask his opinion on the subject — in addition to the opinions of visiting coffee growers from El Salvador and Guatemala.
Sure enough, they all confirmed our suspicions. As long as there are consumers willing to pay for good coffee, there will be a market for good coffee. It does leave concerns about supplies at the mid-range and low end. But the best way to ensure there will always be supplies of good coffee is to keep demanding it and paying a premium for it.
UPDATE: Oct. 7, 2010
A couple days ago, David Pohl, green coffee buyer for Equator Estate Coffees, posted an opinion that largely echoes ours here: David Pohl: “The End of Coffee As We Know It”.
UPDATE: Feb. 21, 2011
Maybe it isn’t the end of coffee. But it’s looking like an end to the artificially and unsustainably cheap prices: Why We’re Paying More for Coffee | Serious Eats.
UPDATE: Oct. 16, 2011
As if you expected anything less… a year and a half later, a guy with a desk job at Starbucks regurgitates old news, and suddenly it’s new news in the mainstream presses: Starbucks concerned world coffee supply is threatened by climate change | Environment | guardian.co.uk.
5 Comments »
Is that to say though that the price for premium coffee will be increasing from these concerns or not any time soon? Also, not to continue the wine analogy, but is there any correlation between lower yields and better beans?
I’m not sure that’s a dependency yet. For example, you could imagine that the productive farmland being converted by developers represents more of the cheaper coffee — for reasons of profitability and financial yield. And the land where good coffee that commands a higher price is grown should theoretically be more economically resistant to land use conversion.
The El Salvador and Guatemala growers at the aforementioned event noted how just the cost of living has risen in countries like Guatemala and El Salvador, raising the costs of buying farms, hiring labor, etc. So there the coffee business is feeling some pressure due to (positive) local economics. But as these growing areas evolve, you wonder if they become more like Kona: where the price is dictated a lot by the local cost of living, and yet production still seems relatively healthy.
[...] News And Reviews The next coffee crisis While climate change is reducing the amount of coffee that can be grown, The Shot says it’s [...]
Sounds more like they’re just not meeting supply and demand with quality product. You can’t blame global warming for that, but since it’s farming, people have created a side economy out of aid subsidies, especially on an international trade level.
We have been seeing more coffee from El Salvador, Guatemala, and Honduras this year, and less from other regions. Perhaps that’s created a false sense of market as well.
i think scarcity is a good thing. people will pay more for better beans, and if there is not enough to go around, they will just have to pay a premium for the good stuff, which is a good thing! Global warming is causing pests that once only inhabited lower elevations, to move up the mountain, and that is definatly a bad thing tho