Nicaraguan Coffee Sells for over $20 a pound!

wow, Nicaraguan coffee producers are winning the competition in the marketplace. These farmers won the Nicaraguan edition of the XI Cup of Excellence auction by selling their coffee for $22.40 per pound! This is great news for all the coffee producers in the country.

original story in Spanish here:

http://www.elnuevodiario.com.ni/nacionales/256038-pagan-mas-de-us2000-qu...

blogged about here:

http://www.elportonverde.com/2012/06/27/nicaraguan-coffee-sells-for-over...

actual results here:

http://www.cupofexcellence.org/CountryPrograms/Nicaragua/2012Program/Auc...

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Webtrainer

This particular auction is more of a show and not representative of coffee prices in general.

See: http://www.cupofexcellence.org/WhatisCOE/OurHistory/tabid/148/Default.as....

excellence

But the "excellence" part is the part that matters; it separates what is going on from the "general" part; the prices between the two should be measurable, if not huge; the fact that 21-year rum costs a lot more than 4-year (or 4 -day) doesn't mean the price is more of a show - while far from the norm, there is a basis for the price differential; a ton of work and quality controls go into the excellence winners in Honduras; I assume it is the same in Nicaragua, but have no direct experience; while it is misleading to imply all coffee is worth big money, certain coffee is worth big money - and coffee buyers are not fools (their end-of-line customers might be, but that is another matter).

Glad you bought up the rum example...

IMO, anything after/over 7 year old rum is way overpriced in relation to what the average consumer would identify as a difference that they would actually pay for. Line up the shots and they would say one is smoother, then tell them how many $'s smoother it is... most would buy the 7 on value (in fact. IMO, its under priced).

Same with the coffee. The auction shows what the farmers are capable of and puts Nicaragua on the map, but its not necessarily a direct connection to coffee prices and quality/value etc. which was what I thought webtrainer was suggesting.

I've gotten hints that Nicaraguan growers

....aren't necessarily coffee drinkers (I know of exceptions to that, too), so this isn't something where they're hands-on developers over the years of the crop for their own pleasure as well as for commerce. Difference between Greeks cooking Greek food and Greeks cooking Italian -- the Greek food tends to be really good; Greek-cooked Italian tends to be really mediocre (Nicaraguan riffs on Italian food tend to be a bit more interesting because some of the ingredients are similar to Nicaraguan food and anyone doing Italian/Nicaraguan here isn't just doing it because gringos want it).

If drinking first rate coffee is part of the coffee grower's life, he's going to grow better coffee. If it isn't, it's just a cash crop for bringing in money. Costa Ricans and Hondurans drink more coffee per capita (3.8 kg and 3.9 kg per year) than Nicaraguans do (2 kg per year), and both drink far less than the Finns (12.0 kg per year) or any of the Scandinavian countries (8.2 to 9.9 kg) or the Netherlands at 8.3 kg. Brazil is both a producer and a consumer: 5.8 kg per year per capita. Colombia drinks even less, so most coffee-producing countries are not big coffee consuming areas except for Brazil. Vietnam (0.7 kg) and Belize (0.7 kg) hardly touch the stuff. Kenya and most of the other African producing countries are even lower--0.1 kg per capita, bit higher in Ethiopia at 1.3 kg per year.

Honduras had the opposite problem that Nicaragua had this year: over-production for the capacity of the processing facilities: http://www.reuters.com/article/2012/05/08/us-honduras-coffee-idUSBRE8471...

A Honduran guy married to a gringa set up shop as a roaster in the US and is doing direct farm to consumer sales.

http://farmerdirectcoffee.com/OurStory.html is the history of the operation.

Getting people excited about the coffee they're growing and drinking and getting connected to consumer country roasting operations seems like it would be useful.

Rebecca Brown

Thanks For The

Link to the Honduras couple. I hadn't found this one yet. There are several others marketing directly to the end user, and a lot of the Hawaiian growers do likewise. The Honduran couple have a nice site. I'm going to order some of their coffee and check it out. I've found really good coffee in Guatemala too, and of course, in Costa Rica. The best coffee I've found in Nicaragua so far came from El Gato Negro. Most of the other coffee I've purchased in Nicaragua has been disappointing. A lot has to do with the quality of the roast.

Clearly, for a grower to strive for excellence requires a market to reward his efforts over his next door neighbor who just picks what happens to show up in any given year. If you are selling to the commodity market the bar is pretty low.

This market is finite, however, and probably represents a very tiny niche in Nicaragua itself. If you are attempting to grow a premium bean your market is the US, Europe and Japan. I noticed that there was minimal coffee selection in Maxi-Pali, and nothing I would have purchased, I see a lot of Nicaraguans drink coffee, but so heavily sugared that I don't think quality is that important. The casual tourist who picks up a bag of "Nicaraguan Gourmet Coffee" on his way out of the country finds very inconsistent results, and probably then thinks that "the coffee I bought last year in Costa Rica was much better".

Only one local blend is available as far as I can see

Like Nicaraguans with coffee, Indians drink tea but with milk, sugar, and spices. The Chinese are more the drinkers of tea for taste, and even the pickers drink good tea (one tea variety is notorious for being stolen by the women who pick it -- pants tea). The Middle East drinks the most tea of all per capita, but that's generally spiced and sugared, more for the caffeine than for delicate tastes. They also drink a fair amount of coffee.

Chinese drink tea for the tea, never add anything to it, drink teas in season.

Next time you're down, check out what is happening in Miraflor. I'm not a coffee drinker so I wouldn't be able to evaluate that.

Rebecca Brown

Local coffee

we`ve found that coffee in the 100 cords for 400 gram bag stuff is pretty good. We have sampled all the brands available locally, and anything in a lower price range tastes a little cardboardy to us. Dipilto was our daily brew for a long time, but either it`s QC varies or our tastebuds drifted, so now we usually buy Seleto green bag at maxipali and occacionally swicth back to Dipilto or Kilambe or even Llano for a change of pace.

We may not be dealing with Kona Coast world class, but good coffee can be had here at about half what it costs in the States. Pricesmart``s housebrand is also pretty good but we rarely get to Managua.

"You can avoid reality, but you cannot avoid the consequences of avoiding reality." Ayn Rand

Let's use an example

with a Nicaraguan connection. Located in Atlanta. http://www.javavino.com/our_store/house_coffee.html

It's easier to do something like that in Atlanta

...than in rural Virginia. Both of them are importing green beans and roasting them in the US, which means fewer middlemen and delays -- better for the consumer, better for the farmers.

This is another interesting coffee site: http://www.sweetmarias.com/coffee.central.nicaragua.php

Sweet Maria's had entries on many coffee-producing countries. Nicaragua is competing with a whole lot of other countries, which is kinda sobering.

The Hondurans appear to be growing more on small farms (85% 5 hectares or less, around 12 acres or less). Don't know the figures for Nicaragua, but even my next door neighbor has 22 manzanas, something like 35 acres, not sure what part is in coffee, though. My impression is that the larger fincas are quite common and need part-time labor for harvests (as opposed to a family farm where harvesting would be part of the work year).

This is interesting on how small scale farmers were more adaptable in when coffee prices fell drastically (again, Honduras, but I don't have data for Miraflor which appears to be using the same model: http://iasc2008.glos.ac.uk/conference%20papers/papers/T/Tucker_228601.pd... People whose whole incomes weren't dependent on coffee and who didn't have ways to be in debt seemed from this study to be less stressed (they complained about a lack of access to credit, but were expanding coffee plantings during the coffee recession).

The theory is that large scale farms have an economy of scale that small farms don't, but that really depends on the crop. If the crop is hand-harvested, there's not really any way to have the sort of economy of scale that you get with a wheat farm and combines. It may take a fairly brutal dictatorship to make large scale coffee production work, with drafts of laborers and prisoners to pick the crops, which is how the whole thing got started in Nicaragua in the first place.

If the boss isn't watching, farm laborers will put more time into growing subsistence crops than in working coffee.

The Platonic Ideal would be to break up all large holding and forbid the ownership of agricultural land by people who weren't themselves personally working it.

Rebecca Brown

Coffee Crop Exports Down.

The first eight months of the 2011-2012 harvest shows that sales of export coffee from October 2011 to May 2012 were US $278.2 million, while the same period from 2010 to 2011 generated US $341.5 million.

Also, 1.24 million quintals (100 pound sacks) were exported while 1.55 million quintals were exported in the same period last year.

However, the price per quintal was a little higher; $223.9 for 2011-2012 versus $220.4 for 2010 – 2011.

The principal buyers were; The United States, Venezuela, Belgium, Germany and Canada.

that is..

for sure..99.99% of coffee dosent go close to that price..more likely to the farmer around a dollar a lb..that was middle men.. probably selling to a japanese specialty company

What I understand is this year was not a good coffee year

...so people who did have good crops had a scarcer item. Good for them, just not the over all equivalent of the two previous years on average, heard from a couple of people and it's obvious from the mood next door and the lack of newer purchases, though my neighbors don't have just one source of income (he also grows vegetables and she works in town).

One of the things about agriculture is that a really bumper crop drives the prices down, sometimes below production costs (people have gone broke in good potato years). The best year for any one farmer is the year everyone else had crop failures. My father talked about the really nasty fluctuations in tobacco prices before the allotment system was set up (whatever one's opinion on tobacco growing is -- my uncle decided to stop growing it after a gall bladder attack that he thought was cancer).

Rebecca Brown

Juanno & ACC Are

on the money. Taza winners sell for a premium price to European and Japanese buyers, but quantities are often small.

It proves that there is a market for a premium bean. But, there is so much inconsistency in Nicaraguan coffee and much goes out at the commodity price, or lower.

On my last trip I bought 10 pounds from El Gato Negro -roasted by Rob- and it was excellent. Everyone has raved about it. I also bought 4 pounds of what was touted to be a gourmet coffee at Cohifer in Eltelí. It was very poor, weak, flavorless. Packaging was good, label design was OK -but no one would buy that coffee a second time. As an aside, probably the best food I had on the trip was at El Gato Negro. I still remember that perfectly toasted bagel with cream cheese .. ..

I spent a lot of time looking at other people's coffee plants this trip. Some plants were well-spaced, some were crammed together, some were well-maintained, others bug-eaten. The coffee on the land owned by my seller was impossibly close together (the more plants the more beans ?) , excessively shaded, and the cherries were small. Two miles away, same elevation, at the Estancia Najaron, the plants were well-maintained, plenty of room, and the cherries were big.

There's a multi-year Kenyan study that showed that it didn't matter how closely you planted your coffee trees, you realized the same production from the same amount of land (obviously some restrictions apply, there was a sweet spot). If you jam them together they grow tall and scraggly, hard to maintain and pick. If you give them the proper space, they bush, crop is accessible, plant is easier to take care of. There's only so much solar radiation to go around. Shading: there's a trade-off here, too much and you give up production and cherry size. Too little, and you don't get the best flavor.

Even the best bean requires an accurate roast. Although tastes vary, this is arguably the most important part of the venture. The inconsistency reflects a cultural attitude that less than 100% is good enough, and the consumer should just accept it. BillyBob calls it the 90% mentality. Those of us who have spent time in CR remember the extra effort the Ticos put into their coffee, brewing it on your table in those little drip bags.

Nicaraguan coffee has the potential -there's that word again- to be better than CR coffee. IMO the coffee is brighter and the flavors more complex. CR coffee is less acidic and softer, kind of like the difference between a good Malbec and a Merlot. I'll drink a decent Merlot if I have to (found one at the Maxi-Pali in Estelí) but prefer the Malbec even though the price is going to be double.

Rob got $11 for his coffee at Gato Negro. He probably paid well under $2 for the beans. His skill roasting the coffee added real value, and the bag and the labels were also first class. Nice margin. He and Kelley have developed a brand over the years; most people who go to SJdS wind up at El Gato Negro. More importantly, they go back again and again. Why not? You can get rice and beans anywhere but you're only going to get that perfect crepe or omelet at their place. Kelly's postings have annoyed some here from time to time, but one thing stands out: they don't accept less than 100% from their employees, or themselves.

I really enjoyed the "all you can drink" aspect not to mention..

the taste at Gato Negro last time I was there... I went too late though, as I ate my delicious club sandwich and drank my third cup, they kicked me out for the afternoon closing time...tasty stuff though to be sure.

I've always wanted to go and buy a quintal and have it here to roast it in small batches. I experimented once with my neighbor's coffee but it was lousy. I believe it is because we are not at enough elevation, only around 1,000 feet. Nice elevation to be still in the Managua city limits but certainly not enough to grow good coffee!

Thanks for the informative post KWP!

Doors of hope fly open when doors of promise shut. -Thomas D'Arcy McGee

There's a guy south of SjdS at about 800 feet

And he grows a great coffee. Small bean, so you do need more beans, (cherrys) to get a quintal, but a sweet oaky flavor. I can get his details if you are serious about growing some.

nice post..

on coffee

Actually

Kelly & Rob have their own coffee farm up in northern Nicaragua. So it really is 100% Gato Negro from bush to cup. Its the best coffee in Nicaragua as far as I am concerned. But I am biased, I drink about a quart of it to start my day...

Yeah . . . .

Brad and I missed you that morning,. Rob said you usually come in . .We hung around as long as we could (while Jeni worked her way through the menu). Good food and attentive service + a bit of the iconic character roasting coffee. With the books, felt like something out of a Hemingway story.

It's a great place.

We had a great hotel too, stone and a lot of very nice wood detail, across the street from the beach. Glass doors to the balcony, AC plus lots of hot water. BIG bed..

I bought four pounds of

I bought four pounds of excellent coffee right on Mombacho. Luckily we also have two commercial roasters in our area, both offering Nicaraguan beans, both operators claim they are partial to them.