Wednesdays are for education!
We'll be taking Wednesdays to focus on education in coffee - methods, terminology, processes. Accessibility in coffee can be as simple as understanding the jargon of coffee. Hopefully you'll find this useful and find that it helps you expand your understanding of coffee a bit more!
This week: FARMGATE PRICING
In the world of green coffee sourcing, roasters are well aware of their FOB (freight on board) price for coffee. This is, after all, the price upon which roasters can then set their prices to consumers. Roasters either pay FOB price or a small margin above FOB price directly to US firms (importers/traders/extensions of origin-based producers) that manage the importing process.
Per @dailycoffeenews , "FOB pricing is the amount paid for the coffee once it is stored, processed, bagged and transported to the port, ready for export. It is not a reflection of what the farmer actually received, or the farmgate price. Estimates of farmgate as a percentage of FOB run from 60 to 80 percent in the coffee sector, depending on the origin and the number of actors in the value chain." That being the case, we feel it is necessary to dig further into the relationship between farmgate price and FOB price to better understand and illuminate the value chain of coffee.
Farmgate pricing can be highly contextual. Factors like farm location, logistics, shipping, country-specific export infrastructure and support, risk, cost of capital, insurance, exchange rates, education/training services, and more all tend to have impact on what we as roasters pay and what farmers receive.
Over the next few weeks and months, via this platform, we intend to look at our coffees through this lens. Our hope is to impart further understanding of the economics of the coffee supply chain onto our consumers. Cheers to transparency!
#1000facescoffee #resistbadcoffee #makethemundanesacred - 21 days ago