The Coffee Price Crisis

 

A Crisis Brewing

There's a crisis happening right now in coffee production: prices have dropped below $1 per pound for green coffee on the commodity market, and have sustained themselves at these low prices for months. Compounded with the fact that coffee routinely costs farmers $2-3 per pound to produce, many coffee farms are operating in the red. While Ruby doesn't purchase coffees using commodity market pricing and has maintained high quality premiums for the coffees we buy, we felt it was necessary to address this issue openly and discuss some of the initiatives that Ruby has invested in.

While we feel that we consistently offer sustainable pries for the coffees that we buy, there's a good chance that some neighbors of our long time coffee farming partners might not be able to afford to keep producing coffee. We hope that by talking more openly about these issues and discussing initiatives to combat low C-Maket prices, we can help produce change in how coffees are purchased. 

Finca El Retiro, Colombia

This week we were able to release our new coffee from Duvan Rivera, who owns a plot at his family farm, Finca El Retiro. Our introduction to Duvan came from our partnership with Pedro from Pergamino exporters, who we met in 2013. He sent us green coffee samples from his treks through the Antioqua region of Colombia that we received in Nelsonville, tasted, and decided were exactly what we were looking for. Many relationships for roasters and farmers can start and end at the cupping table: for Ruby, we value long standing partnerships. 


While visiting Colombia last year, Jesse Myers and Jared had the chance to travel out further and visit Duvan at his farm. Meeting Duvan in person also introduced us to his brother, Over. Both brothers had recently starting pushing quality of coffee production on their own individual plots of the family farm, and their processing operations have yielded large jumps in cup quality. We made commitments to buy coffee from both Duvan and Over this year.

At face value, this decision is a good business proposition: Ruby was able to purchase a larger quantity of very high quality coffee, pay a sustainable premium for it, and offer it to our customers. Looking closer, building long standing partnerships with coffee farmers and increasing the amount of coffee purchased from a single farm can have a large impact. Specialty coffee premiums can often be 3-4 times higher than C-Market prices, which means that producers who have market access to high-end coffee roasters can see an exponential rise in income, and purchasing more coffee from the farm can build that rise even higher. Finally, by establishing relationships with the farmers, Ruby can help create a sustainable, reliable source of income year after year. 

These small steps aren't solutions: the Coffee Price Crisis will take years of systematic analysis and large scale efforts to resolve. Ruby's commitment to making an impact, however modest as it may be from a small roaster in rural Wisconsin, is still a way to move forward towards a more sustainable coffee value stream.

 

El Salvador

The longest farm relationship that Ruby has predates Ruby itself. Jared has known the Mendez/Ortiz family for over eight years, and knew that their dedication to farming matched his passion for roasting. Ruby's first year saw 7-8 bags of coffee from them. Last year, we managed to bring in 40. This year, we'll be bringing in 120 bags of green coffee from Finca Talnamica and Finca Natamaya. 

This year, coffees from Natamaya will be an integral part of Creamery, which allows us to make stronger commitments to this lasting partnership. We've grown together over these last five years: our renewed commitment to Talnamica and Natamaya has helped the family reinvest in quality initiatives, building new drying tables, focusing on lot separation, and pursuing quality control tastings.


Ruby has always paid high premiums for coffees from these two farms to showcase single origin releases, but that usually leaves a fair amount of coffee from those farms to be sold somewhere else, where pricing might not be as sustainable. A heavier commitment from Ruby to this partnership helps create sustainable, reliable pricing for the Ortiz/Mendez families for a wider swath of their farm. 

We participated in a similar program presented by our import partners, Collaborative Coffee Source, last year. While we'd previously been buying single origin lots from Pedro Sagastume's farm in Honduras, their RISE program bundled coffees from his farm that wouldn't normally get sold to specialty roasters and promoted them in a way that allowed Ruby to purchase all of Pedro Sagastume's coffee last year. 

These are the moments that make us proud to have such great customers — without people believing in Ruby, we wouldn't have the ability to keep growing and reinvesting in our coffee partnerships. 

We're hopeful for a sustainable coffee future, and believe that each of these small initiatives are chances to pave a way forward. 

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