– by Steve Sheppard –
As I sit and write my first coffee column of 2014, I have a deep sense of appreciation for what coffee means to our daily lives in terms of the social connections it facilitates. Having said that, we spend a lot of our hard-earned money on coffee each year, and I wonder if anyone else wonders: are we paying too much for our daily cup? Well, the short answer is “no,” we don’t pay too much, considering the effort it takes to bring coffee from the plant to the cup.
Back in the fall of 2013, the people who forecast what may happen to the price of coffee predicted that world coffee prices would remain low-ish based on supply, despite the growing demand for 2014. Coffee is a commodities market, and I think we need to watch the price of our daily cup as we move into 2014 as green coffee prices reached bottom a month ago and that will revive investor interest. Remember, the stock manipulators (predators) are always looking for the next commodity that they can run up and make money along the way. Also, emerging markets are starting to drink more coffee (any coffee, in fact) like China and India. These countries are seeing a somewhat wealthy middle class emerge, which means more social time in their daily routines to drink coffee, the cool western beverage. How far the stale Charbucks of the world can penetrate these markets remains to be seen.
The growing demand combined with the limited supply starting to come from South America, particularly in Brazil, where coffee farmers are talking about turning to more profitable crops, will ultimately drive dynamics over the next few years. In saying this, Brazil produced a bumper crop in 2013, and is likely to repeat this in 2014.
But coffee drinkers, especially fans of the more expensive high quality specialty coffees, should still pay attention to coffee supply and demand trends around the world with places like Costa Rica, a major producer, declining 35 percent in the past decade.
Then there’s the Canadian dollar, that nobody worldwide pays attention to, but when coffee is bought in U.S. dollars, many of us in the Great White North should take a bit of notice. My position on the price of our daily cup is this: If I am going to pay a premium price ($2.50 for a cup of drip, or Americano), I want fresh, organic and grade-one coffee that is roasted by someone who lives locally, and for that, I will pay a little more … Steve out.
