Harvest Challenges in Central America

From heavy rains to labor shortages, there have been many harvest challenges in Central America this season.

Over the last couple of weeks, we’ve spent time catching up with some of our suppliers about the harvest challenges in Central America this year. The thread that ties all of their stories together is one of long dry seasons followed by late and heavy rains leading to a diminished crop, and not enough workers to get the coffee off the trees. Neither issue is new, but the impact of the combination is significant and will be felt by both producers and consumers alike.

The wet season, which is a vital part of plant production, came very late this year in Central America. When it finally arrived, it came in the form of pummeling rains from tropical storm Sara. Water is crucial for triggering flowering in coffee trees and supporting cherryEither a flavor in the coffee, or referring to the fruit of the coffee tree, which somewhat resembles a red cherry.: Either a flavor in the coffee, or... ...more maturation, but too much can be a problem. The deluge brought by Sara knocked both flowers and cherries from trees, lowering this year’s harvest by 10% or more in many countries.

The timing of the rains created its own set of problems. For one, it caused most of the cherry to ripen at the same time which has been a lot to manage for those picking the coffee. Normally, coffee fruit ripens at different rates over the course of a 2-3 months, allowing pickers to make several passes over the trees during the season. Unfortunately, the combination of the late harvest coupled with fewer workers has meant ripe coffee often goes unpicked, and potentially less grade 1 coffee as a result.

This is all happening amidst the backdrop of record coffee prices, the coffee Commodities market (“C market”) breaking $4.00 for the first time ever just last week. High prices mean more money for the farmer, which is good, but it’s not always good for quality. The Specialty grade coffee that we buy receives a premium that is generally well above market minimums (and FT minimums, for that matter). But when the difference between price minimums and quality premiums shrinks, as it does when the market is high and unstable, there is little incentive to invest extra work producing top grades in order to receive a marginally higher price.

So how does this effect the price of coffee for us? To be honest, the harvest is still underway, so we can’t say with absolute certainty. But we expect there to be less coffee, and we are ready to pay a higher price for it. Our early contracts are showing a 30% increase on average vs last year’s price, and we expect our retail price to be around $1.00 more across the board. The good news is the majority of the extra cost we pay for coffee goes to the farmers, not intermediaries, or us.

It’s hard to say where prices will wind up, especially given the fast moving target of the market. So far, signs indicate the global coffee shortage that is behind much of the price frenzy will be with us for foreseeable future. That said, the Commodities Futures chart does show a downward trend in the works, and when that happens, our retail prices will follow suit.

We hope to buy similar volumes and qualities from our suppliers in El SalvadorEl Salvador coffee had an undeservingly poor reputation for years, marred mostly by the inability to deliver coffee of high quality in an unstable political climate. Unfortunately, agriculture... ...more, Costa RicaCosta Rican coffee is typically very clean, sweet, with lots of floral accents. hey are prized for their high notes: bright citrus or berry-like flavors in the acidity,... ...more, GuatemalaGuatemalan coffee is considered a top quality coffee producer in Central America. Due to our proximity to Guatemala, some of the nicest coffees from this origin come to... ...more, and NicaraguaNicaraguan coffees from the Segovia, Jinotega, Ocotal and Matagalpa regions are nice balanced cups. They often possess interesting cup character along with body and balance, outperforming many other... ...more, and should have a better understanding where this all leads by early March. Now is a very good time to shop the current Central America list. We have a great selection of fresh tasting coffees across the board that are also a really good value since they were purchased in a more stable market.

Shop our current Central American coffee selection:

---

Related Posts:

January Green CoffeeGreen coffee refers to the processed seed of the coffee tree fruit. Coffee is a flowering shrub that produces fruit. The seeds of the fruit are processed, roasted,... ...more Outlook: Harvest…

July Green Coffee Outlook: Central America Roundup