Sunday, February 13, 2011

It's a Roaster's Life

Maybe you have and maybe you have not heard that coffee prices are soaring. They are. Mucho dinero is being paid for specialty grade coffee nowadays. In many cases, specialty roasters have absorbed the price increase to protect their customers. At the current rate of increase though, roasters will have to let some cost pass to you, the consumer, in the near future. 
Prices for Fair Trade certified coffees have a base floor at $1.31 per pound. Today's market price for "c grade" (coffee that is high enough quality to be considered specialty) $2.5225 per pound. Wow. Here's a chart on coffee's price flux over the past year:

For Hasbean, the coffee pinch has caused a  need to explain to its customers:
So a scenario today the market is at 2.54 (which at time of writing it is). I want to buy a contact for coffee today then I will pay 2.54. But should I want to protect myself against what I think its a rising market I can buy coffee for a premium to the market, for this case we will say 7 cents, that will cover the costs of insurance and keeping it in the warehouse so paying $2.61.
If the market drops I get left with coffee contract costing 2.61, but have protected themselves against swings so can offer a stable price to customers. But should the market rise, I can either use that contract still or sell it and make a profit.
The specifics for fluctuating coffee prices can be found on CNN's Money Watch. Most of us aren't coffee roasters, at least not commercially. We don't track coffee's price by the pound. We can, however notice price increases every 2 weeks-month, or however often we return to the coffee aisle at the grocery store. My argument for buying specialty right now is found in an unlikely place:

The ripple effect: As retailers start paying more, the coffee you drop into your shopping cart may very soon start costing you more at the register.
Supermarket chain Publix said it has left some coffee prices unchanged to remain competitive. But the grocer has boosted prices on some brands, including a container of Folgers Classic Aroma Coffee, which used to cost $8.99 and is now being sold for $9.99.
One bright spot: While you may be paying more at the grocery store, your daily cup of joe at the corner coffee shop may be spared because pricing decisions are made by each shop individually.
So, in this [coffee] tight economy, you may just be better of buying premium beans. The cheap stuff is getting pricier anyway. Lord, thank You for the interconnectedness of life and people. It's an amazing thing to see just how significant other people's lives are to our own. I pray we take this reality to heart and live it out daily, placing others at the front, since their lives are integral to ours. Keep me head deflated and on straight. 

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