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  1. #21
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    we all have to remember that it is not the farm's owner who needs help.
    it is the coffee farm workers who makes $6 to $8 dollars a day. (in case of Guatemala, In Ethiopia & Kenya, much less....)
    whomever buys directly from the farm and pays bit extra, the buyer must make it sure that the extra money will help the wokers' families and for their kids education to better their lives in the future.

    it is just a bad cycle, as we all know it.
    Rich gets richer and poor gets poorer.
    it is the education that will change the cycle.

  2. #22
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    How exactly does the C market price effect the farm... specifically - when the large importers buy from the farms are they paying the current market price? I was under the impressions that C was somewhat of a commodity market trade like other ag products.

  3. #23
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    Quote Originally Posted by Musicphan View Post
    How exactly does the C market price effect the farm... specifically - when the large importers buy from the farms are they paying the current market price? I was under the impressions that C was somewhat of a commodity market trade like other ag products.
    yes, you are right. C price is just a commodity market trade price.

    however, as for commercial beans in Guatemala (78 to 80 points normally), as C price fluctuates, so as the selling price from farm to big exporter.

    let me give you an perfect example.

    when I was buying the beans in march, the C price was about $1.00

    big exporters were buying one quintal (one quintal is 100 pounds of parchment beans) at Q650 (which is $85.00).
    Nomally 100 pounds of parchment beans become about 80 pounds of exportation green beans.
    so $85 divided by 0.80 equals to $1.06 per one pound of green beans to the farmer.

  4. #24
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    So if the C price was $2 - would the farmers actually receive $2 (in a bigger generalized way).

  5. #25
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    Quote Originally Posted by Musicphan View Post
    So if the C price was $2 - would the farmers actually receive $2 (in a bigger generalized way).
    good question, but that is where it gets tricky.
    in last six years that I have been in coffee business in Guatemala, the commercial bean price fluctuated from Q650 per a quintal to Q950 per a quintal.
    so, when it was $1 C price, it was Q650 per quintal.
    and when it was $2 about five years ago, the real buying price was Q950. not Q1300 (double of Q650).
    so basically when C price doubled, actual commercial bean buying price went up only by 50%.

  6. #26
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    by the way, if farmers can make Q950 per quintal (100 pounds of parchment. $125 is Q950), yes, farmers are okay.
    but anything under Q750, they will be losing money.
    specially now, due to coffee rust and lack of rain (huge factor now), the coffee production is much lower with bad quality beans.
    so with $1 C pricing with these difficulties, it really compounds the financial problems for them.

    again, these problems mostly affect the farm workers much more than the owners, obviously.

  7. #27
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    So it appears that 'we' can't do much to impact the farmworker other than trying to work with ethical farmers that pay fair wages. That's obviously pretty tough when most of the market is not working directly with the farm. I assume farm direct business is probably less than a few percentages.

    More questions...
    Obviously, an ag product grows in all different qualities... do most farms simply not desire to increase the quality? Not able? I would think it would be beneficial to grow the best possible coffee to receive a premium price. Obviously, as a specialty roaster, we pay much higher than C market for our coffees.

  8. #28
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    Quote Originally Posted by Musicphan View Post
    So it appears that 'we' can't do much to impact the farmworker other than trying to work with ethical farmers that pay fair wages. That's obviously pretty tough when most of the market is not working directly with the farm. I assume farm direct business is probably less than a few percentages.

    More questions...
    Obviously, an ag product grows in all different qualities... do most farms simply not desire to increase the quality? Not able? I would think it would be beneficial to grow the best possible coffee to receive a premium price. Obviously, as a specialty roaster, we pay much higher than C market for our coffees.
    one of the ways to help the farmers and workers is that buying from farms directly and promote & help any related NGO to help out the farm workers' living and educational conditions. (which our company is currently doing right now... very tough to get it going, but it is working slowly...) and yes, it is a very small percentage that works directly with farms because it is very time consuming and difficult to travel to visit each farms and cup all the coffees.

    as for your second answer, it is all matter of money. they do not make enough money to make the better changes for the farm and coffee. need more fertilizing, better workers to pick better beans. educate the farms and workers about producing better beans. however, if buyers buy directly from farms, in a lot of cases, they specially request special process and sometimes they teach them *just like Tom from sweet maria is doing*. and then of course, the buyer pays higher pricing for better beans. hence, slowly the relationship develops and farm gets better in so many ways.

    again, mike, thanks for these important questions. I am certain that most of people do not understand these, but at least I want to just get it out there....

  9. #29
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    I think this conversation is why its so difficult... we are both in the industry and it's difficult to understand the challenge.

    What I'm trying to understand is the full supply chain. For example, I buy my Guatemalan through a local importer. I know the farmer is Finca La Maravilla, in then runs through Dinamica which from my understanding runs the mills /processing/sorting. From there it goes to my importer and then to me. Where in this supply chain can we improve? I'm not 100% sure who owns the exporting responsibility, I believe my importer handles most of that. Obviously your suggestion is buying from the farms, but if they don't have the resources to improve the quality how can they afford to process their own coffee? (I assume they don't).

  10. #30
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    Quote Originally Posted by Musicphan View Post
    I think this conversation is why its so difficult... we are both in the industry and it's difficult to understand the challenge.

    What I'm trying to understand is the full supply chain. For example, I buy my Guatemalan through a local importer. I know the farmer is Finca La Maravilla, in then runs through Dinamica which from my understanding runs the mills /processing/sorting. From there it goes to my importer and then to me. Where in this supply chain can we improve? I'm not 100% sure who owns the exporting responsibility, I believe my importer handles most of that. Obviously your suggestion is buying from the farms, but if they don't have the resources to improve the quality how can they afford to process their own coffee? (I assume they don't).
    wow... mike, you just opened up huge can of worms, ha ha ha. here is how it goes.

    farm : they can only do washed, natural, honey..etc process and sell parchment beans to farm coop (like us. Ensoluna is a specialty farm and we represent about 25 other specialty farms in different regions.)

    there are 3 types of exporting company.
    one : like us. small coop who has farm and working with other smaller farms. but we do not have the capability to process (parchment to export standard beans which is what Dinamica does) nor has the export licence to export. so we pay $8.00 per 100 pounds of coffee to borrow the license and sell to overseas.

    two : regular small exporting company. no processing plant, but has license to export. no farm of their own. they just buy whatever is cheapest and best beans and sell to overseas.

    three : huge companies like olam, exportcafe, cafcom..etc. that has own license and processing plants.

    * Dinamica is a processing big company also has license to export. so your importer might be buying directly from Dinamica.*

    to answer this question from you : but if they don't have the resources to improve the quality how can they afford to process their own coffee?
    the commercial grade farms do not have resources to improve the quality by themselves due to lack of money. some buyer must work with them exclusively to make the farm better. and when you say process, there are two process. one is up to parchment process, by washing, natural, honey..process.
    second is what Dinamica does. sorting, taking parchment out of the beans. bagging, grain pro, jute..etc, calling shipping line to make the container arrangement...etc.
    as far as the quality is concerned, the process that farms do is way more important than what Dinamica does.
    what dinamica does is just to meet the customers's standard of sorting, size of beans, packing standard...etc.

 

 
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