Colombian coffee: getting the best cup

“I’m going to be famous in America!” Hernan Fernandez jokes as we take his picture in front of his sprawling coffee farm, La Meseta, in the small province of Antioquia, Colombia. “My picture will be plastered on a wall somewhere, and I’ll just be here in my muddy boots with my coffee.”

He’s not complaining, just commenting on the distance between his world and ours. Through high quality control standards, and ideal altitude and climate, La Meseta produces an exceptional cup of coffee. Henry Dean, owner of Boston Stoker Coffee Company, has been courting Hernan for two years, slowly earning enough loyalty to sign an advance purchase contract for Hernan’s world-class coffee. When it’s roasted and brewed, it tastes like smooth milk-chocolaty orange with subtle notes of vanilla in the finish.

The problem is that Hernan, like other Colombian farmers, is more comfortable riding the commodity market; waiting for the highest price before selling to a mill. Lots of farmers don’t care where their coffee ends up, as long as they get a good price. Even though Henry is offering a premium price, Hernan hesitates, wondering if the commodity market will go higher. Colombia 2012-470

The coffee buying process in Colombia is different from other countries. Most farms are too small to sell directly to buyers like Henry. Estates are family owned, passed down through generations and divided between siblings, getting smaller every generation. The average size of an Antioquia coffee farm is just 1.3 hectares. Other provinces like Nariño have even smaller farms, averaging 0.7 hectares.

The size means the daily yield of coffee cherries during harvest is small. Too small to make the long drive to a mill every day to sell fresh cherries. Since coffee has to be wet processed within a day of picking so the fruit doesn’t rot, Colombian farmers have their own wet mills at home. The cherries are de-pulped and set out to dry, where they can stay in stable parchment form until there is enough to make the trip.

What sounds like a minor difference in agricultural process, significantly changes Colombia’s coffee economy. Once dried, “parchment coffee” is stable for months, so farmers can hold their coffee until the market price rises. Colombia is a sellers market, and it’s almost all price driven.

Climate also plays a role in daily yield. Kiko Venzuelas, part owner of the Enantioquia Benefictio mill in Jarin, Antioquia says the Colombian harvest has lengthened because of mild summers and higher average rainfall. “The harvest lasts months now. It used to be weeks. So farmers pick less every day.”

Other countries with large farms and tight harvest times have high daily yields, so farmers sell cherries daily without investing in wet mills. There’s a lower overhead, but also less control. This model gives traditional mills the upper hand. They can pay lower prices for cherries because farmers have to sell the same day. But once the coffee is processed and dried, mills can wait for higher prices. Some farms vertically integrate, investing in their own milling equipment, and will negotiate their own sell price. They have greater control over profit, but are also exposed to more risk.

In Colombia, dry mills further process the parchment coffee into ready-to-roast green beans, and negotiate directly with brokers on prices and purchase contracts. Coffee contracts are signed before the harvest so dry mills know how much coffee they have guaranteed buyers for, and green coffee brokers have time to sell their inventory in advance to roasters. Farmers are always paid cash same day by the mill, so advance purchase contracts protect mills against having a warehouse full of pre-paid inventory with no buyers. But Colombian mills have the opposite risk; instead of excess inventory, they risk defaulting on contracts because farmers refuse to sell.

Kiko’s mill works hard to earn farmer loyalty to avoid this situation. They employ agricultural technicians who consult with farmers to improve yield and “cup quality” so farmers get higher prices. They are careful to give good service at the mill, paying farmers within the hour instead of the usual five to six hour wait at government run cooperatives. Even still, relationships with farmers are “tenuous strands of partnership.” Farmers sell to the highest bidder; there have been times when Kiko had to ask customers to accept a substitute coffee because farmers wouldn’t sell.

Uncertain price is a common frustration for farmers. Ricardo and his two brothers run a farm together in Nariño, a province on the west coast of Colombia. “Why should I work hard to have good quality coffee when if Brazil has a big crop, my price goes down too?” He blames his meagre profit on the future traders in the stock market; an activity that has no connection to his farm, and yet seriously affects his business.

Henry is trying to bypass this challenge by buying directly from Hernan with a pre-negotiated price. He’ll guarantee a set price for quality, regardless of the stock market. It can vary from $0.50 to $2.00 per pound above market rates. It seems like an obvious benefit to Hernan, but it’s taken no less than two years and a few nights of bonding over aguardiente for Henry to earn enough trust. Finally today they strike a deal. Kiko agrees to process La Meseta coffee separately through his mill. So for the first time, Boston Stoker customers will enjoy the smooth chocolaty orange taste of Colombian direct trade coffee.