Straight from the source of Brazil’s coffee

Brazil coffee

Minas Hill and BeanScene bring together the voices of several Brazilian producers to express their views on the current market, sustainability issues, and the future of specialty coffee in Australia.

Brazil has faced a series of unprecedented challenges across its supply chain. Logistical delays, rising costs of coffee inputs, and tumultuous weather have impacted the world’s largest producer of Arabica coffee beans, and has been felt like a shockwave across the globe.

Coffee producer Jean Vilhena of Eldorado Farm in Ibiraci, on the border of Minas Gerais and Sao Paulo, has more than 100 years of family history in coffee growing. Until recently,  Jean says his farm, situated 1200 metres above sea level, had rarely been impacted by the weather. Now, it’s a constant concern.

“Before 2013, my region, Ibiraci, had never lost a single bag of coffee to drought. In 2014 and 2015, the drought began to show signs of staying. In these two years, my farm lost 30 and 35 per cent [of crops] respectively,” says Jean.

With each passing year, the rains have become more scarce, the average temperature continues to rise, and recent frost damage has resulted in huge losses. To compensate, Jean says coffee must be more highly valued.

“Prices at US$1.20 per pound will not cover the cost of production. I would like to see a price increase that reflects the climate, and the work producers perform and present,” Jean says.

Jean Vilhena of the Eldorado Farm.

Also experiencing the climatic impact on his crops is Andre Cunha, a third-generation farmer from the Bela Epoca Farm in the Alta Mogiana region. The farm is run alongside Andre’s sister and brother, and are dedicated to growing only organic coffee. Andre says if it didn’t rain considerably, at least 50 to 100 millimetres by 15 September, market prices would continue to rise, persisting into 2022.

He says the global pandemic is also a challenge, which has increased the price of coffee while causing a shortage in coffee inputs, such as labour and irrigation needs.

“Agricultural machines, for example, saw a 100 per cent increase compared to pre-pandemic levels, and fertilisers and pesticides have risen around 40 to 50 per cent,” says Andre. “The price of coffee was stagnant and although there was no reduction in production costs, I would like to see prices at a level that give coffee producers a good profit margin.”

Gabriel Oliveira, a sixth-generation coffee farmer from the Bom Jesus and Labareda Farms agrees that coffee inputs have tripled in value with agricultural implements, tractors, and harvesters doubling in price.

“[Brazil’s coffee industry] is in a delicate moment where there is increased demand, yet lower crop yield predicted for the 2021/22 harvest and the 2022/23 harvest,” he says.

“The frost in 2021 has been one of the strongest and has resulted in the death of several coffee plants.”

While Gabriel loves coffee production, he says it requires a large amount of investment — roughly two and half years — until the coffee plant can be harvested and income can be made.

“With the annual cost of production rising, I believe the price per bag of coffee needs to increase too so coffee will become as profitable as other sectors,” says Gabriel. “If not, I fear many coffee producers will exchange coffee for another produce.”

According to Gabriel, the latest forecasted number of coffee bags affected by the frost and drought is estimated between three to 10 million. He believes there will be a “tightening” of stocks for the next two years, however, the increasing prices and low remuneration will not decrease the quality of the specialty coffee market.

“There has been a change in the coffee producers’ culture regarding post-harvest management. It is considered a more delicate process now, which has resulted in better coffee quality,” he says.

Gabriel adds that new technology has also played a role in the rise of coffee quality with some innovative machines able to visually separate mature beans, helping coffee producers to manage separate lots while minimising the cost and labour of selecting coffee.

One farmer still very committed to the traditional, manual method of production is Grasiela Maris of Ouro Verde Farm.

“I often have to wake up in the middle of the night to measure the temperature and take the necessary care to ensure the coffee is always drying evenly and resting properly,” says Grasiela.

Since the difference in prices between commercial and specialty coffee has narrowed considerably, Grasiela says producers prefer to dry and process coffee quickly in order to get income faster.

Grasiela says it is important roasters value the work of coffee producers and start buying more specialty coffee from Brazil, not just micro lots.

“If roasters start to purchase more specialty coffees, [farmers] will feel encouraged to produce them,” she says.

“We need to have a solid price base that the coffee producer is guaranteed, in order to motivate them to produce specialty coffees. Since other crops sell for higher prices, producers tend to stop planting coffee as the cost is higher.”

Henrique Sloper, former President of the Brazil Specialty Coffee Association (BSCA) and owner of organic and bio-dynamic-focused Camocim Farm, believes that to further encourage change, roasters and retailers should invest in more direct trade models.

He says there is also a need for greater consumer education on the challenges in producing specialty coffee.

Gabriel Oliveira is a sixth-generation coffee farmer from the Bom Jesus and Labareda Farms.

“We are going through the perfect storm and I believe the prices of coffee for the end consumer will have to rise,” he says.

“Growers, traders, retailers, and all involved in our coffee industry have to be ready for the consequences. Frost is just one of the elements in this ongoing drama and as of now, we are looking at a very difficult two years ahead of us. We will all have to realign our budgets and be able to be communicate this effectively to our dear coffee lovers.”

Pedro Gabarra of Santo Antonio, Vertentes, Mirante, and Pinhal Farms, believes that for the next two to three years commercial coffee prices will rise to US$1.80 per pound or more, due to the damage the droughts and frost have caused to the current coffee crop.

He says, further transparency on Brazil’s current situation, and on the hard work required to produce this coffee is needed on an industry level.

“I believe a fair price would be US$1.50 per pound, where both producers and roasters are able to earn money,” Pedro says.

“Only through increased transparency is it possible to keep the customer service without lowering the quality. Through the internet, with two or three clicks you can find out what is true and what is a lie. The customer has the right to know what they are buying.”

From the Vista Alegre Farm in Piata, Renato Rodrigues says that the price of specialty coffee should be reaching above 100 points, or US$100 in the New York Stock Market, however, across the globe the consumer has not yet realised the importance of paying more.

According to Renato, the pleasure of drinking a specialty coffee is indisputable, especially when the consumer understands the care that has been given at all stages to produce such high-quality beans.

“Coffee connects producers with the whole world and brings incredible experiences from people and places that they, producers, never imagined their coffees could reach,” he says.

“The important thing for Australian roasters is to seek a partnership with their importer and, consequently, with the producer. If there is no such connection, there will be no loyalty.”

As the only member of the BSCA in Australia since 2012, Minas Hill Coffee remains committed to educating Australian roasters on Brazil’s specialty coffee and raising awareness in sustainability and transparency across the coffee supply chain.

Marcelo Brussi, Founder and CEO of Minas Hill says, “together with the coffee producers, we hope these perspectives leave a message of optimism and hope for our baristas, roasters and everyone who makes a living from Brazil’s coffee.”

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This article appeared in the October 2021 edition of BeanScene. Subscribe HERE.

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