Coffee prices are compounded through the supply chain. 

The goal of this project is to know where we land and outline goals to ensure that the coffees we purchase are fairly priced through the whole supply chain.

As a new company purchasing small quantities we rely heavily on the spot market. Buying “on spot” means that the coffee has landed in a warehouse and is readily available for purchase. The spot price is much higher than the FOB price and is usually available on importer’s websites.

In the spreadsheet below, we list 100% of our coffees with the FOB price paid. FOB stands for Freight on Board and is the most commonly negotiated price that is attainable because of the contracts negotiated between Exporters and Importers. While the FOB price does not tell us how much a farmer is paid, we can deduce that their payment is less than the FOB pricing after the Exporter and Mills take their cut. 

FOB pricing is not something that has been historically available to roasters unless they negotiated the terms themselves. FOB pricing has recently surfaced because of industry pressure and movements like The Pledge that launched just a few weeks ago in late June of 2019.

The Pledge was started by a group of roasters that publish the prices they pay in order to demystify the price of coffee and more importantly prove through documentation that fair prices are paid. Some of the reports are exemplary and even include prices paid to the farmer. 

This is also my goal. 

To purchase coffees from suppliers that can document the price structure down to the individual farmer.

To offer a fair share farm subsidy at the end of the year to the producers/farmers that do not receive a minimum price of $2.25 per pound. 

To work with producers that are committed to paying fair and dignified wages to the pickers that work their farms.

To publish contact information of the farms we work with so they can tell their own story in their words. 

These goals are ambitious and will not happen overnight. As we work towards these goals, I will be open and honest about our successes and struggles as a small business. I hope to one day join my colleagues and form meaningful and impactful relationships throughout the entire supply chain. 

To learn more about FOB pricing and the Coffee Price Crisis we recommend the articles below:

IF YOU DRINK COFFEE, YOU SHOULD KNOW ABOUT THE C-MARKET Article By Colleen King

Karla Boza on the Realities of Coffee Farming [081] Podcast By Boss Barista

The 2018 Coffee Price Crisis: Market Fundamentals and the Human Cost Article By Jos Algra