Feb 2011: More Coffee Market Craziness; Life without Centrals?

Coffee is about to get ridiculously expensive. I sit here in Kenya as I write this, having set aside 271 bags of amazing coffee, but at prices that would have been unbelievable, even last year. Auction prices have hit new highs, $10.08 in last week’s auction. It’s hard to speculate if those particular lots were bid up due to some prior arrangement with a buyer who specified no cap, or whether 2 parties thought the coffee was that good. (I cupped a different lot that went over $10 in the auction and did not think it was a real Gran Cru coffee). In any case, we are paying in a range of $5 to $8 for coffees. And make note, this is for coffee that is still in Kenya, and does not include import fees and transportation costs, or arrival fees from the warehouse once in the US.

The scarcity of Kenya coffee due to low crop and drought (the 4th year of record low coffee volumes) is certainly affecting prices here, but it’s a global story really. While speculation in the coffee markets and rates for currencies is definitely having an impact on the rising C market, there are some fundamental issues of low warehouse stocks, low crops in many countries, and higher consumption in producing nations. Royal Coffee is a coffee importer in the Bay Area, and they have an interesting blog post about factors influencing the C market. That is here.

It’s hard to know where this is going, but the chance of things settling down to the prices of mid-2010 or even 2009 is highly unlikely. Personally, high prices for green coffee affects us because the prices for baseline specialty coffee is driving the price for really exceptional coffee much higher. Higher prices for amazing coffees is not as troublesome as the fact that some companies will be buying fairly average coffees at prices that are still quite spendy. Now that does not make sense. How this affects home roasters is hard to foresee. In general, it is already so much more economical to home roast your coffee. But home roasters are just a tiny fraction of a huge industry – the big concern is that some of the big roasters will look to cut costs of green coffee and undercut specialty production. Rumor has it that Starbucks is actually buying coffee farms in Yunan China, which promises a huge increase in lower quality “specialty” coffee, just as the shift to robusta did some years ago. One thing that some commentators mention is the growth of coffee consumption in producing countries. Countries that previously exported all their specialty coffee to the US or Asia, now start to see a home market for their crop. Maybe really top tier coffees will still fetch a better price on the export market, but the global supply of coffee will shrink as the number of people drinking coffee rises.

What all this means for specialty coffee production is unclear. The last time coffee prices spiked in the late 1990s, the price eventually fell back to more sustainable levels (for producers, importers/exporters, roasters and consumers). What we could see is some sad results in terms of cup quality being offered to the public (could it get any worse?) as well as confusing coffee drinkers on the very different levels of quality within the ever-broader (and increasingly meaningless) term “specialty.” Or maybe there will be a broadening of coffee education, much as there was in wine or specialty beer markets, where consumers start to know something about the intrinsic differences between say Kenyan coffees and Costa Rican, as different as say a Czech Pilsner and Irish Stout. It’s really hard to say, but one thing is for sure. We set out to offer the best small lots we can to home roasters, and we will continue to do so no matter how this all settles out. –Tom

Life without Centrals?
Okay – it is not as drastic as all that – but we do expect that our supply of Central American coffees – and Kenyas for that matter, will dwindle quite a lot before we receive the new crop in spring or early summer 2011. Already we are down to one Costa Rican coffee on the list, and I expect that to be gone fairly soon. That seemed inconceivable last summer when we had 10 different Costa Rican coffees in the warehouse! The new packaging options of vacuum packs and Grain Pro bags mean that the we can invest in the best of a crop at one point during the year and then continue to sell it for months after that, with no change in cup quality. But it is still a balancing act in that we never want to have too much of a coffee on hand.

Now some home roasters might think it’s impossible – “how can you have too much of a great coffee?!” but it is true. Even with storage options that extend a coffee’s shelf life, we don’t want to have past crop coffees on hand. So it means that sometimes we run out of favorites like Costa Rica. But in our opinion, it is better to run out and look forward to next crop, than to be sitting on a backlog of coffees, hoping they will sell, while the latest crops sit. Maria

I Can’t Taste (from the SM blog)
Well, today I can’t taste. I have had a bad cold, not that intense but just deep-seated, with sinus headaches and such. I normally don’t get that, and I wouldn’t write about it unless it lead to some thoughts about taste. (Note to self: Next time maybe I should NOT go surfing in a rainstorm on a chilly day). Anyway, I don’t feel that bad, and have continued to work.

Yesterday I cupped just fine but today I was quite frankly shocked when I set up a mixed table of Kenya, Brazil and Ethiopia coffees, 12 in all. The dry fragrance from the Kenyas seemed so flat. The Ethiopias were being re-cupped from a day ago, and they seemed so different. When I hit the Brazils and couldn’t sense a huge difference, I realized the problem. I really could not smell today. Since the majority of your sense of taste hinges upon your olfactory, and mine did not show up today, this has actually become a very interesting experience. In the Kenyas I sense the acidity as a reaction from papillae on my tongue, but can’t discern the flavor at all, or whether it is citric or malic brightness. I am getting a sense the Kenyas have a clean cup, and the body is sorta medium and pleasant; that’s about it. Bizarre.

My awareness of body and mouthfeel is greater, perhaps because it’s one of the few things I can perceive. The Brazils seem very viscous, thick. But I am getting some sense, retro-nasally and on the tongue, that they are slightly more bitter than the Kenya and earthy or unclean. One technique for tasting is to pay attention not only to the aromatics you draw it, but also to close your mouth and breath out through your nose to aid in circulating volatile aromatics via the rear of your palate (access to the olfactory is nasal and also from the rear of the palate). The fact I can’t pick out any actual flavors in the Brazil to differentiate it from the Kenya is pretty unbelievable, for you can’t find two more dramatic extremes in the world of coffee flavors. The Ethiopias are quite thin in mouthfeel, and the acidity is aggressive at these lighter cupping roasts. I know exactly how good these Ethiopias are – I scored them near 90 yesterday.

Today they are completely unappealing, stripped of their floral and fruit qualities, and without any great sweetness. What a different a day makes; it’s like seeing the world in black and white, tasting only a small portion of what is available in these stimulating coffees. But it reminds me of the huge physiological factors involved in taste. We speak about it like it exists. We even talk about “good taste” like those who have it can wave a wand and bless it upon one thing or another. But how relative it all is to the tinted lens through which we view these tasteful things, a lens that, even on a good day, is always present. -Thompson

Big Changes to the SM Library
We have some big changes in the works on this side of the website – and ought to be able to announce something by March. I hope. Maria

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