Paying for Coffee—It’s Complicated: Part 1

Part 1: Paying for Coffee—It’s Complicated

“How much did the producer get paid for this coffee?”

This is a question we’re excited to be hearing more of. Thanks to an epic and sustained dip in coffee’s C market price, more and more roasters are thinking about how much it costs to produce coffee and wondering if the producers whose coffee they work with are meeting those costs.

While it’s crucial that roasters interrogate whether or not producers are getting paid enough to survive and thrive, it’s even more critical that the answers they get are informed by the proper context. While asking about prices paid to farmers can be a great place to start, without the frame of reference about those farmers’ costs, how the importer is calculating that number, and what the middle of the supply chain looks like, those numbers can be all but meaningless. For real change to come from this conversation, we need to unpack the context that informs what coffee prices actually mean: we need to go further.

In this series, we’ll talk about why coffee pricing is complex, why context matters, and why it’s important to go deeper than asking for farmgate price.

In Part 2, we’ll talk about the terms for pricing coffee and the factors that complicate them: the meaning of farmgate pricing, the real numbers that underpin it, and the impact of shared lexicon—or lack thereof—on discussions around pricing.

Part 3 will discuss cost of production and sustainability, as well as why context often matters more than numbers.

In Part 4, we’ll talk about purchasing models and why what you pay sometimes matters less than how you buy.

In Part 5, we’ll explore how to ask the right questions about how coffee was priced and get real answers about your importer’s purchasing model.

As coffee lovers, we need to continue having that conversation and delving deeper; it’s absolutely critical to the future of coffee. To do that, we need to unpack all the context we can on what these numbers really mean, so that consumers at all levels of the coffee industry are able to make informed decisions about where their coffee should come from.

By: RJ Joseph