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> Thanks to demand from these chains, the coffee husk now often fetches a higher price than the bean itself does. Batlle says she gets $7 for a pound of cascara

> Thanks to demand from these chains, the coffee husk now often fetches a higher price than the bean itself does. Batlle says she gets $7 for a pound of cascara, while the average price for coffee hovers around $1.20, the lowest in about two years, because of an oversupply of arabica beans. So my takeaway is that it's a factor of being new trendy thing right now, and coffee beans themselves are cheaper than normal from oversupply. I imagine the price and especially the premium ratio will balance out. With that said, I certainly hope the trend of continuing to use the husks continues. Coffee is a wonderful, precious fruit and I'm all for using more of it. Most people don't even realize that coffee "beans" are the seeds of the coffee fruit itself, which is more like a cherry. The vast majority of the fruit is usually discarded and rinsed off the seeds, except on some varietals where some of the pulp is allowed to remain on the seeds before being roasted to give them more of a fruity/citrusy flavor.

Canadauni 8y ago
Keeping the pulp on the seed isn't really a varietal specific thing but just a processing method used before drying. This method is called natural processing and any coffee can be processed this way just lots aren't because washed usually yields a higher grade on the market.
hinkley 8y ago
Farmers are screwed because they produce a commodity, and because there is a couple year lag between supply and demand (you can’t count on a bumper crop the first time you try). The advice I see given out time and again to small farmers is to stay boutique. Try to grow something that not everybody else is. The volumes are low but the prices are higher. However this is always in the context of satisfying a local market. With the exchange rates who knows. And niche produce and vegetables don’t tend to have the shelf life of beans and grains, so you can’t ship them as far.
- sailfast 8y ago
  This is precisely why futures markets exist- to hedge this risk for farmers. They’re definitely not screwed here though I agree for more elastic, longer lag products this could be a problem.
  - pbhjpbhj 8y ago
    Can the farmers actually afford to gamble on the markets. I'd imagine it was third parties up the chain that were able to afford to hedge their profiting from the farmers labour.
    - sokoloff 8y ago
      If you have a genuine product and want to secure a steady price for it, that's hedging not gambling. If I want $2/kg for my beans, I can sell futures and "lock in" that price. If it falls to $1/kg, I'm still able to sell at $2/kg. (Conversely, if it rises to $4/kg, I still only get $2/kg.) On the buyer/user side, Starbucks/Dunkin could buy futures so they also locked in a known price for the future. Whether the spot (instant market) price is $1 or $4 per kg, they may have locked in buying at $2/kg, essentially the opposite use case as the farmer/producer. (Southwest famously did this for jet fuel during the prior oil runup.) Similarly, you can hedge weather and natural disasters if so inclined.
      - hinkley 8y ago
        But that was my point. I don't actually have the product until the end of the year.
        sokoloff 8y ago
        If you will have it and just don't have it now, that's exactly what hedging using futures was originally created for. If you're worried about whether or not you'll have it, that's why I mention hedging weather, disaster, or other things that might affect crop yield.
        sailfast 8y ago
        Right. You buy a future that says "I will provide 30,000 units of soybeans in St. Louis in September, at 300/unit" or whatever. You were planning on growing 325 or something, and you hedged the majority of your crop. Somebody buys your futures contract. Then, demand for soybeans tanks. Price drops. Doesn't matter. Somebody has already paid you for that opportunity and locked in their price. If soybean demand skyrockets, you miss out on the profits since you already sold, but you locked in your expected profits for the year - congrats! If your crops all die, there's insurance for that but you could also be somewhat creative about call options on September soybeans to make sure you could buy back in at a decent price to still deliver your goods. Anyway, these markets exist specifically to help smooth out price insecurities on commodities for goods producers.

Canadauni 8y ago

Keeping the pulp on the seed isn't really a varietal specific thing but just a processing method used before drying. This method is called natural processing and any coffee can be processed this way just lots aren't because washed usually yields a higher grade on the market.

hinkley 8y ago

Farmers are screwed because they produce a commodity, and because there is a couple year lag between supply and demand (you can’t count on a bumper crop the first time you try). The advice I see given out time and again to small farmers is to stay boutique. Try to grow something that not everybody else is. The volumes are low but the prices are higher. However this is always in the context of satisfying a local market. With the exchange rates who knows. And niche produce and vegetables don’t tend to have the shelf life of beans and grains, so you can’t ship them as far.

sailfast 8y ago
This is precisely why futures markets exist- to hedge this risk for farmers. They’re definitely not screwed here though I agree for more elastic, longer lag products this could be a problem.
- pbhjpbhj 8y ago
  Can the farmers actually afford to gamble on the markets. I'd imagine it was third parties up the chain that were able to afford to hedge their profiting from the farmers labour.
  - sokoloff 8y ago
    If you have a genuine product and want to secure a steady price for it, that's hedging not gambling. If I want $2/kg for my beans, I can sell futures and "lock in" that price. If it falls to $1/kg, I'm still able to sell at $2/kg. (Conversely, if it rises to $4/kg, I still only get $2/kg.) On the buyer/user side, Starbucks/Dunkin could buy futures so they also locked in a known price for the future. Whether the spot (instant market) price is $1 or $4 per kg, they may have locked in buying at $2/kg, essentially the opposite use case as the farmer/producer. (Southwest famously did this for jet fuel during the prior oil runup.) Similarly, you can hedge weather and natural disasters if so inclined.
    - hinkley 8y ago
      But that was my point. I don't actually have the product until the end of the year.
      - sokoloff 8y ago
        If you will have it and just don't have it now, that's exactly what hedging using futures was originally created for. If you're worried about whether or not you'll have it, that's why I mention hedging weather, disaster, or other things that might affect crop yield.
      - sailfast 8y ago
        Right. You buy a future that says "I will provide 30,000 units of soybeans in St. Louis in September, at 300/unit" or whatever. You were planning on growing 325 or something, and you hedged the majority of your crop. Somebody buys your futures contract. Then, demand for soybeans tanks. Price drops. Doesn't matter. Somebody has already paid you for that opportunity and locked in their price. If soybean demand skyrockets, you miss out on the profits since you already sold, but you locked in your expected profits for the year - congrats! If your crops all die, there's insurance for that but you could also be somewhat creative about call options on September soybeans to make sure you could buy back in at a decent price to still deliver your goods. Anyway, these markets exist specifically to help smooth out price insecurities on commodities for goods producers.