Coffee Economics with Karl: A Better Understanding of ‘Farmer Price’

In last week’s debut of a new video series on coffee economics, Karl Wienhold of the Colombian trading company Cedro Alto broke down some concepts surrounding “farm gate” or “farmgate” price, and how that price is represented.

Now Wienhold has drilled down even further, exploring the concept of “farmer price,” which might vary widely from region to region, and depending on what specific jobs the farmer is responsible for.

“The ‘Farmer Price’ sounds simple, but the term does not indicate in what form, where, and after performing what functions the producer gets paid,” Wienhold told DCN. “They could be processing, drying, dry milling, packing, paying export tax and port costs and selling FOB, or even at the roaster’s door in another country. At the other extreme, the producer may only tend to the field and let an exporter’s crew of pickers come in, take away cherry, and handle all the rest (outcropping). These are the questions one must ask.”