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Coffee is cheap


Nothing frustrates me more than people complaining about coffee being expensive. The fact of the matter, is that coffee is extremely cheap if you start looking at the amount of labour and how many people are involved in the chain from seed to cup. The C-market price today is about the same as it was 30 years ago, ranging from USD 1,30 to 1,60 per lb (453g) of green unroasted coffee.  In other words, the majority of coffee farmers are getting the same pay today as 30 years ago. I can’t imagine anyone in the consuming countries, especially in Norway,  being satisfied with having a salary that correlates to the salaries paid in 1982.

I realize that the lack of knowledge and education is a contributing reason why we get some customers who complain about our coffee being expensive, especially when a supermarket coffee cost about US$13 per kg in Norway and our coffee costs US$65 per kg and up.

Of course, there is a difference in how the coffee is produced. The biggest roaster in Norway roasts about 13.000 metric tons of coffee per year. We roast about 22 tons per year. In 40 minutes we have  roasted and packed about 12 kg of coffee, in the same amount of time the biggest roaster has roasted and packed about 2000 – 3000 kg of coffee, so the logistical setup, coffees bought and production line are running on a completely different cost.

With the current market price for coffee, most farmers in Colombia are losing money. The reasons for this are – the rising cost of labour, fertilizers, food, electricity, pesticides, interest on loans, etc. The average farmer in Colombia has about 2 hectares of land with coffee and it is in many cases their main source of income. I believe their best chance to compete with the current prices is by moving towards quality production and finding customers who are willing to pay for the quality; as there is no way they can compete on price nor quantity with the big factory farms in Brazil.

In my next post I will try to give you a small insight of the cost of producing quality coffee in Colombia. Hopefully it will make more people realise that we’ve got to start paying more for coffee and demand more transparency if we want to continue drinking this delicious beverage.

Read more in part 2

9 Responses to “Coffee is cheap”

  1. just another one Says:

    Bravo Tim! Hats down!

  2. Tamas Says:

    But isn’t the real question about what makes up the difference between the approx. 2.70 USD/kg green coffee price and the 13 USD/kg (non-high quality) roasted coffee? I don’t think people complain about the price paid to the farmers (ie it being too high), but rather about the price paid to intermediaries. Maybe it would be useful to shed some light on the costs going from green to cup (rather than from tree to green).

    Cheers

  3. Kristian Sætervik Says:

    It would be nice if these posts could be shared on to Facebook. :)

  4. Tim Wendelboe Says:

    Follow us on twitter #timwendelboe or use an RSS on the blog. We try to focus our content on our blog. Will ooh into it.

  5. Nicholas Says:

    So, this means the high prices you take benefit the farmers more than yourself?

  6. Tim Wendelboe Says:

    It benefits all parts in the chain. As a business man I think it is important that both the farmer’s and our business is sustainable economically. We both need to make a profit in order to be able to invest for the future growth.

  7. to cheap - coffeegeek Says:

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    […] third year of TW reporting the prices they pay for green coffee. Tim Wendelboe has also done quite a bit of writing on their blog about coffee trade questions, and how coffee is still “too […]

  9. Tim Wendelboe Releases 2013 Coffee Buying Transparency Report – I Love Real Coffee Says:

    […] is the third year of TW reporting the prices they pay for green coffee. Tim Wendelboe has also done quite a bit of writing on their blog about coffee trade questions, and how coffee is still “too […]

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