June 2011 Coffee News

-Peak Coffee
-New Coffee Prices
-Biological Diversity Photos

We had a great time talking with new and old coffee customers at the Living Green Expo last month. We also received several nice responses to our May email newsletter on sustainability, including several customers who have tried No Impact Man's 3-week mini No Impact Experiment and a few suggestions for our own sustainability dilemas of coffee bags and transportation. Keep those suggestions coming. This month, we continue the environmental theme with recent news reports about "Peak Coffee" and photos of wildlife diversity in the mountains near our family coffee farm.

Peak Coffee
Cathy's mom was the first to alert us to the concept of "Peak Coffee" which she heard on NPR's Market Place. We've been aware that coffee prices have reached record highs due to poor production in Colombia and and other key coffee producing countries. Experts are now worried that poor coffee harvests are related to climate change and that we may have reached "peak coffee" production levels for the finicky arabica coffee trees that aren't responding well to the unusually heavy rainfall and unusual temperatures coffee producing regions have been experiencing the past few years.

Environmentalists place the blame for higher coffee prices squarely on Climate Change. (See "Peak Coffee Incoming: Climate Change is Killing Our Buzz.") Others acknowledge the weather's impact, but put blame for recent price hikes on commodity speculation and the growing demand for coffee. (See "Peak Coffee: A cup of trouble").

We wish we could say our experience is different, but our family members have had smaller coffee harvests the past few years too. They have seen colder, wetter winters and heavier rains. (Guillermo's brother Avilio described a recent rain storm, like a huge bucket of water being emptied over the farm for about 30 minutes -- this from someone who is used to heavy rain, having lived in the rain forest his whole life!) They have noticed coffee trees blooming at unusual times and an increase in coffee blight like .... On the positive side for coffee farmers -- at least those with a decent harvest -- coffee prices are now at record highs.

New Coffee Prices
The impact of all this on Velasquez Family coffee? Well for the moment, rest assured, we have plenty of coffee. We are expecting our 2011 coffee shipment in the coming month and at least at this point the 2012 harvest for our family looks promising -- it doesn't look like we have reached our "peak." However, with market prices now reaching close to $3.00 a pound for green coffee, we didn't feel comfortable continuing to pay our family a mere $2.20 a pound as we have been doing for the past few years. (Remember that before we started this business, they were only getting about $.50 pound. And the fair trade minimum was only around $1.40.)

For 2011, we have agreed to pay our family members $3.20 a pound as well as cover more of the exporting and importing costs. As a result, we unfortunately need to increase our prices to our customers here. Starting July 1, look for the following new retail prices (fundraiser and reseller customers, look for an additional email with your new prices coming a bit later).

12 oz bags of coffee - $9.00
8 oz flavored bags of coffee - $6.50
5 lb bulk bags of coffee - $50.00

While we regret having to change prices at all, we are glad that this is only the 2nd time in our 10 year history that we have had to increase prices and that we are able to keep our increase to around 6-7% (compared to the 12% and 20% increases being reported by Starbucks and Maxwell House.) Please let us know if you have any questions or concerns about this change (and feel free to stock up on extra coffee before prices go up July 1, if you wish).

Biological Diversity on the Coffee Farm
Instead of ending this email with the negative news of higher prices, we are happy to have beautiful photos to share. We recently received an email from Josiah Townsen, a biologist who has spent a great deal of time in Honduras and on our family's coffee farm in the Comayagua National Mountains. He was kind enough to let us share a link to his photo album full of beautiful mountain shots and diverse wildlife, and even a few of Guillermo's brother Avilio and his mini-hydroelectric generator. Enjoy!