Coffee Season Feeling

This time of the year is always so exciting! The weather changes, there is a festivity in the air, holiday coffees are being released, and a whole new year is ahead of us. Overall it seems that our roasters and their communities are really enjoying the coffees from this past harvest and are moving through them well. Marianela and I have been fortunate enough to spend time with my family in Arizona, recently. We took advantage of our time in the Southwest of the U.S. and responsibly visited some of our roasting partners. At the same time, the coffee trees in several regions of Costa Rica are already bearing ripe fruit and the farmers are having to begin harvesting their production. Cooperatives and multinational mills are already open - accepting the first few “fanegas” of early crop cherry for lower grade regional coffees. Every quality needs to be used for a farm to be sustainable and it should have its place in the market.

As many of you know Central America was hit extremely hard by two sequential hurricanes, Eta and Lota. Our heart goes out to our friends, colleges, and the people of Nicaragua, Honduras, El Salvador, and Guatemala as they were hardest hit. We are very lucky that Costa Rica missed a lot of the hurricanes’ force; however copious amounts of rain still came from the storms causing damage and displacement around the country. On a positive note, we are hoping that the good rain fall over the past year will lead to higher quality coffee. If you recall, last year was pretty dry and we noticed some issues in quality because of it. Even more fortunate news is farmers, across the board, are reporting that the harvest seems to be coming in about a month later than usual. This is great not only because it gives the farmers a little bit more time to figure things out, but it could also translate into better quality this year.

By now, many farmers have had to manage to find labor despite the hurdles posed by covid-19 restrictions. The fortunate producers located in later harvesting areas are still preparing their wet mills and corralling their harvesting groups for the season. However, the preparation has been hard for a lot of farmers as they may have been de-motivated by volumes and last minute prices from the previous harvest. We are hearing from multiple farmers that they feel uncomfortable processing coffees without already having firm commitments to it. Although we managed to give top dollar to a large chunk of each producer’s coffees - if they processed more than we could help them sell (which was difficult during the first months of the pandemic) then they would have to either wait or eventually settle for less.

So, farmers are really hoping to get the most accurate picture they can as they go into this harvest. Marianela and I have been working hard at collecting feedback and forecasting from our roasting partners. If you have received a message from us checking-in  be sure to reply as soon as you can! While it’s relatively easy to get feedback, it’s been really challenging for our partners to forecast for next year. With so many countries going back into lock downs - our partners are quite unsure of the future and the farmers definitely feel that from this year’s trading season back in March. We’ll probably see wet mills processing a lot less of their yields and settling for a lower, yet more secure pay for delivering their fruit. We are hoping that most farmers continue to process a small amount of the creme of the crop.

In the meantime, we don’t see the demand for conventional or high commercial coffee being very strong. In fact, by talking to many of our roasting partners we have noticed that micro-lot coffees have been a bigger success throughout the pandemic. As restaurants, cafes, and hotels have had to scale back and/or close the consumption of commercial coffee declined. People now working at home have been buying bags of coffee and brewing at home - often choosing more top tier coffees. We fear that while farmers choose to go back to delivering their fruit; the prices from cooperatives and multinationals will be at all time lows, albeit a safer bet.

As the population begins to feel more comfortable living through a pandemic and travel becomes more frequent we are anticipating people coming to Costa Rica and the coffee farms. It’s no surprise that covid cases will be going up in the farms throughout the harvest, and so, protocols are being put in place to mitigate that. Among procedures that everyone is well used to by now - some municipalities, most notably Tarrazu, have constructed temporary hospitals on soccer fields in the farming areas to attend to anyone who falls ill. It has been an interesting internal debate for us in deciding how to approach visit inquiries this harvest. While we aren’t encouraging folks to do origin trips - we do feel responsible to host those that find their way to Costa Rica. So if it is a must for you, please get in touch with us to make sure it goes smoothly!

Coffee in the In-between

It’s been a long time since we’ve checked in. We were very busy during what was a demanding stretch of the season. This season turned out to extend far into the later months due to coronavirus. We had to manage the final couple of exports there were for this year as well as compile all of the detailed information for each lot to share with our partners. It wouldn’t be fair to spend our time writing this newsletter while our roasting partners were waiting for their lot information.

There is a real sense of accomplishment to have completed our work with all of the lot information sheets and, even more so, knowing that all of the coffee is out of Costa Rica and has arrived at its destination. It’s truly been a privilege (via technology) to see all of the coffees being proudly released by roasters all over the world; and in some cases even getting to taste the roasts. By now, the majority of the coffee we worked with has already been launched by our partners and some of the smaller lots have already been sold out. 

This year, it has been raining very well. It makes for a great environment to keep the farmers busy. It is during this time, between June and November, that most of the work goes into the farm. You can plant, prune, fertilize, fumigate, and clean up. While weather conditions have been positive for the upcoming crop the environment surrounding it is still very uncertain. 

If we have been working together already than you know that Costa Rica’s production relays on labor coming from it’s neighboring countries of Nicaragua and Panama. In a typical year it all appears to go smoothly, but with the challenges Covid 19 brings to the movement across boarders there has been concern among farmers regarding the pickers of their harvests. This phenomenon is going to lead to uncertain results. As many coffee harvesters are indigenous (especially for Tarrazu and Brunca) there are laws protecting their ability to move freely; however there will still be stricter protocols at the farms. Currently the Ngäbe-Buglé indigenous are allowed to come to Costa Rica from Panama since they have double nationality but on the other hand the border with Nicaragua are close.

It’s been our observation that smaller operations will be less affected by the lack of labor while larger farms that need about 50 or more pickers at a time will struggle to keep up with their harvest. For everybody this will mean new protocols in the work environment that people are simply not accustomed to - and it’ll be very difficult to implement. We have seen that farmers are trying to get in touch with their harvesting groups earlier this year. Those that aren’t able to contact their returning groups begin to look inside of Costa Rica to people usually coming from the southernmost region. 

The low supply of labor could end up raising the prices paid by farmers for a full “cajuela” of coffee cherries. This is favorable for the pickers available, but can lead to costly increases in the farmer’s expenses and can end up in the consumer’s purchase. We anticipate seeing farmers collaborating and sharing harvesters more this year than ever before. It is a possibility to see a difference in the quality of picking this harvest as many laborers doing this may not specialize in coffee. 

Although the coming crop is looking like it will produce a bit more than last time there is still a good amount of coffees left in storage of the farmers. The uncertainty of coffee buyers during the peak of exporting made it difficult to sell coffee and so we are still trying to move whatever coffees we can for farmers even this late in the year. In fact we recently received an interest in coffee from an importer in Taiwan and after we put out the word to farmers on the ground we were delivered over 100 samples within a week. 

Contracting coffee for export also becomes a challenge this far into the year because Icafe needs to close the harvest period 2019-2020. Icafe needs to register all the data from this harvest period by September 30th in order to know the yield of each mill, close the tax period and have other important harvest information that they need to register every year. That beaing said the farmers have time until September 30th to register exporting contracts in order to sell their product after the end of September. What we have had to do is direct producers to create a contract with themselves before the end of September so that afterwards they can transfer the contract into our ownership when the coffee is sold. It has been a privilege looking for opportunities to continue to help farmers move their coffee even well into the year.

Farmers are still concerned about what demand will look like for the next crop. With lockdowns and closures all over the world they fear that the consuming markets have been impacted in a way that will change their sales outcome. From our recent contact with roasting partners we do not currently anticipate a large decrease in buying next harvest. In the meantime some of the relationships we are a part of are eager to contract coffee pre-harvest and our gaze has definitely shifted towards the new crop. 

Recent Producing Challenges

Lately we have been visiting a lot of farms as they are preparing for the coming crop. All of these producers are focused on quality, since this is the market we mainly work with. Today, while we were visiting a beautiful and healthy farm; the farmer pointed out to us a neighboring farm and it opened our eyes to realize that the current situation of coffee production in most of the world is not like the one we experience with the farmers we work with on a daily basis. 

One of the current challenges for farmers is to keep their farm practices and coffee knowledge update to date. Going back to the neighboring farm we saw, it wasn’t looking healthy at all and it barely had any production. Our farmers say that a plant should have, at the most, three stems coming from the trunk in order to produce a good amount of high quality cherries. The conventional farm we observed had 10 or more stems, which is crazy! This is telling us that many farmers have very old farm management practices, in this case with pruning, are simply neglecting their plantations, or cannot afford to maintain them. We also realize that some farms are very old, the plantations are tired, and ready to be renewed; but many of these farmers don’t have the resources to renew their plantation. In Costa Rica the cost to renew a farm depends on many factors: 

• The type of land: if the land is flat or sloped. If it’s sloped the farmer needs to create terraces and this will require higher labor cost. Also if there is old coffee that needs to be removed this requires more labor. 

• The type of variety planted: for example if you plant Caturra and Catuai the cost per plant is $0.50 USD but if you plant a Hybrid is $0.90 USD and a Geisha maybe even more expensive.

• The planting distance: for example varieties like the Hybrids and Geisha need to be planted 2 mts by 2 mts, other varieties need less space in between them.

• The time for the plant to start producing the first coffee cherries: depending on the varieties and altitude of the plantation it might take 2 to 4 years.

For you to get an idea the approximated cost per hectare to renew coffee is $2200. This cost is to plant a normal variety like Caturra and Catuai in flat land.

Another challenge that has been creating big movements in the world is climate change. This is a problem that keeps dramatically affecting the behavior of the plantations; especially the ones located at low altitudes. Farmers are combating stronger and more varieties of diseases and fungus like leaf rust. Producers need to spray multiple times a year in order to control the rust and this makes the cost of production really high. To give you an idea, just to spray one time, one hectare of coffee, a farmer in Costa Rica can spend around $120 USD including labor. Remember that the farmers are spraying usually 3 or 4 times a year each hectare of coffee; which leave us at $360-$480 USD per year per hectare. If you think about it--it’s a huge cost. Our farmers also want to reduce the amount of chemicals used in the farms, but unfortunately at certain altitudes and with certain varieties it’s very difficult to spray less. That’s why producers need to grow varieties that are resistant to all these diseases. We are working very hard to guide farmers and recommend them to take the right decisions at all these pivotal points. The farmers that are at 1700 masl are not worried about growing Caturra and Catuai yet, but the farmers at 1200 masl up to 1500 masl are struggling with these common varieties that are not so resistant to rust.

We must not forget that most of the farmers in Costa Rica are 50 years old or more. Their children are going to school, getting their degrees, and becoming professionals. They look for jobs and move to the city to work in order to lead a more comfortable lifestyle. This situation is happening to most of the farmer’s children; especially the ones that work under the control of the C-market prices. Since these prices are really low there is no motivation for them to stay in the farms and work the land anymore. On the other hand, with the opening of micromills that are run by families like mine; we as the next generation in coffee are more enticed by specialty coffee. We get premiums for good quality which keeps us motivated to continue with our family legacy. But if you ask me, I would say that these cases are still rare overall in the world. In general, the new generations in coffee don’t want to work in this industry since they don’t have an incentive to really do so.

We at Selva are working tirelessly to find market niches for the forty different producers and suppliers we work with. We know this is one of the biggest challenges for many farmers. Our producers are doing their best to focus on growing and producing the best quality coffee and this takes most of their energy and time. They need companies and partners like us that can focus on trading, guiding them, and finding great partners that share our same values in order to build a sustainable supply chain.