What's Next for Coffee Prices in 2020?

By Bill (William) Murray, President & CEO, National Coffee Association

After hitting historic lows in mid-2019, coffee prices began to rebound in November of 2019, an upward slope that continued through the end of December 2019.  Dramatic world events in early January 2020 have already caused spikes in commodity markets – including in the price of oil – that could drive coffee prices up further. 

And so the question on everyone’s mind is whether this upward price trend will continue. 

We can’t predict future coffee prices – but here’s what we do know:

Last year’s historically low coffee prices put unprecedented pressure on some of the 25 million farmers who grow coffee.  This, in turn, led to an unprecedented industry-wide conversation about the impact of low coffee prices on farmers.   

Initially these conversations were simplistic, in today’s click-bait style – broad, black-and-white portrayals of a supply chain populated with villains and innocents, with equally simplistic solutions that could easily cure all ills.

But as the conversation continued, it became apparent that the truth is more complex – just as coffee itself is a complex beverage. 

The reality is that many of the challenges facing coffee farmers are not unique to coffee. Price volatility, poor infrastructure at home, a lack of information, and other factors are the same issues facing small-scale famers in all agricultural sectors.

And while there are common elements bedeviling all small-scale farmers, there is no simple, appealing, one-size-fits all “solution” for helping coffee farmers improve their lot.

This is why it is crucial – especially if coffee prices continue to rise – that we continue to work together as an industry to support farmers.  If you want to be part of the solution, here are four things you can do now:

Understand the Facts.  Current low prices are due to an oversupply of coffee, with other factors, such as the natural, cyclical nature of the market, and foreign currency fluctuations, further challenging farmers.   Devising solutions starts with accurately identifying the challenges.

It Takes a Village.  Know that solutions involve many hands – from international organizations such as the United Nations, to the governments of coffee-growing countries, NGOs, corporations, and even coffee drinkers who send a signal about their values and what they are willing to pay for every time they buy a cup of coffee.  A local – or national – dimension to helping farmers is especially important, as communities must shape programs designed to meet their needs.

A great place to start for a better understanding of the challenges and solutions is the International Coffee Organization’s 2019 “Coffee Development Report.” This report’s 10 page “Overview” provides a rich, deeply researched perspective on today’s market with a focus on development.

What else?

Take Action.  Join us.  Work on your own, through your company, and with others to do what you can now and make a commitment that will persist regardless of price levels.  Hundreds of companies and organizations are supporting program work and buying practices that support farmers.  NGO programs, such as Conservation International’s Sustainable Coffee Challenge, are convening companies to collaborate and directly help farmers — as is the Global Coffee Platform.  More immediately, there are charities that are working on a day-to-day basis to help farming communities in need, like the Coffee Trust.

And finally…

Drink More Coffee.  Market prices were driven down by an oversupply of coffee, and drinking more coffee – to help lap up the surplus – not only helps farmers, but can bring health benefits.

In the meantime, the NCA will continue our work, together with others — for change will not come quickly or easily.  We’ve been supporting, sponsoring, and participating in the ICO’s work;  We’ve partnered with the Sustainable Coffee Challenge, including creating resources to help improve labor practices at origin; and we’ve identified charities through our Showcase and Award Program that we believe are worthy of your support.

Where are coffee prices going in 2020? 

Up or down, one thing is for certain: there won’t be any coffee without farmers to whom we are all connected.

Is Coffee Good for You? Our Coffee Doctor Weighs In

Yes, coffee is good for you. But did you know you that more of it can be better? Our resident Coffee Doctor, Mark Corey, PhD, recently traveled to Montréal, Canada for the East Coast Coffee Madness festival, where he spoke about how coffee’s not only good for the drinker, but good for the people who grow it, too.  Read on for a window into coffee madness:


East Coast Coffee Madness (ECCM) (Festival du Café de Montréal) was held on October 19-20th, 2019 in Québec, Canada, at the gorgeous Montréal Science Center.  Organized by Jonathan Gabbay and Nathalie Gabbay of RGC Coffee, the event brought together professionals young and old from every corner of the coffee industry – from baristas to roasters to purveyors of the finest self-contained, bicycle-powered espresso carts. (Really.)

Dozens of exhibitors showcased their artisanal craftmanship and expert ability to source, roast, and prepare coffee to perfection.  But I wasn’t just in Montréal to sample some of the finest single-origin coffees in the world (though that was a nice perk – Ethiopian Yirgacheffe, anyone? I had a mission: to take the stage and help spread the word about the surprising — and under-reported — health benefits of coffee.

Raising the Floor                                                  

The theme of the keynote presentations was “Raising the Floor” of coffee prices. A diverse roster of experts offered compelling insights into how we can address this complex issue for which there is no magic bullet. Phyllis Johnson of BD Imports, former Board Member of the NCA, spoke about the need to elevate the voices of women and minorities in coffee. By having their voices heard and increasing awareness of their contributions to the value chain, she said, we can help build stronger coffee-growing communities – in a sense, ‘raising the floor’ at the ground level.  

As we all remember from Econ 101, supply and demand dictates that when there is an oversupply of a something, market prices tend to fall. This is the situation we find ourselves in with coffee. Before coffee prices reached their current low, farmers were already struggling to stay above the farmgate value, or break-even cost of production — so asking them to limit production at the expense of their own livelihoods is not a viable solution. Instead, we should be working to increase consumption – and one way to do this is to spread awareness of the health benefits of coffee.  This was the focus of my address.

Coffee is Good For You — and More is Better

As a food scientist, I’ve spent much of my career evaluating the scientific consensus and the latest research to make sure coffee is safely produced and healthy to consume. The data is clear on coffee: It’s healthy, and the greatest benefits may be derived by drinking 2-4 cups per day (1).  The problem is, most consumers don’t know that coffee is good for you — let alone that more is better. In fact, the 2018 National Coffee Drinking Trends (NCDT) Breakout Report on Coffee and Health reported that 69% of consumers were unaware of the potential health benefits of coffee. To capitalize on this massive pool of consumers who could help balance out the coffee oversupply, my presentation highlighted the possible benefits of coffee consumption, such as how coffee drinkers:

  • Live longer than non-coffee drinkers (1),
  • Are LESS likely to develop type 2 diabetes than non-coffee drinkers (2),
  • May benefit from liver-protective effects (3),
  • May experience protection from depression (4),
  • May derive other potential health benefits (5).

It was frankly a lot of information for anyone to absorb in a short period of time, but I’m hopeful that by interpreting the data and presenting it in an informal, conversational way, coffee pros are better equipped to share with their customers that they need not feel guilty about that extra cup of joe.

Several thousand years ago, Hippocrates said, “Let food be thy medicine, and medicine be thy food.”  I think we can all drink to that!   

Cheers,

Mark Corey, PhD, Director of Scientific Affairs at the NCA. 

References:

East Coast Coffee Madness – https://www.eccoffeemadness.com/

Supply and demand – https://www.mindtools.com/pages/article/newSTR_69.htm

Farmgate price –  https://en.wikipedia.org/wiki/Farm_gate_value

69% – National Coffee Drinking Trends Breakout Report: Coffee and health. 2018.  http://www.ncausa.org/Industry-Resources/Market-Research/Consumer-Insight-Reports

(1) Kim Y, Je Y, Giovannucci E.  Coffee consumption and all-cause and cause-specific mortality: a meta-analysis by potential modifiers Eur J Epidemiol. 2019 Aug; 34(8): 731-752.  https://www.ncbi.nlm.nih.gov/pubmed/31055709

(2) Carlström M, Larsson SC. Coffee consumption and reduced risk of developing type 2 diabetes: a systematic review with meta-analysis.  Nutr Rev. 2018 Jun 1; 76(6): 395-417.  https://www.ncbi.nlm.nih.gov/pubmed/29590460

NCA Next Generation Council Meets at SCTA Dinner in Switzerland

NCA Next Gen Council at the SCTA Conference and Dinner, Basel, Switzerland, October 10, 2019

2019 marked the 10th year of the annual SCTA Conference and Dinner located in Basel, Switzerland.  For the second year in a row, the NCA Next Gen Council was invited to participate in the event, a proposal which was once again graciously accepted.  In addition to the elegance of the dinner itself, our Council members were able to attend an information session and networking hour dedicated exclusively to Next Gen members. 

The initiative was led by Guillaume Zbinden, who has been at the forefront of the effort of the SCTA to emulate the NCA’s Next Gen platform.  Guillaume’s keynote speech was followed by a thorough review by Michael von Luehrte of the activities of both the SCTA Next Gen Council, but also those of the contingent of Next Gen Members throughout countries of origin. 

And to round out the conference section of the Next Gen session, attendees were able to see ‘into the future’ with remarks by Dean Sanders and a panel led by Susana Robledo. 

The event was a great success and the growth of the Next Gen “movement” was apparent! 

NCA Member Spotlight: Nano-Purification Solutions

Companynano purification solutions
Location: Charlotte, NC
NCA Member Since: 2018
Twitter: @npsi_USA
Facebook: /nanopurificationsystems
Instagram: @nanopurificationsolutionsusa

What does nano-purification solutions do?

Nano is a manufacturer of nitrogen gas generation systems used for coffee packaging, manufacturing, cold brew coffee production and nitro draught service.

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A Partnership to Protect the Future of Coffee

The NCA is working with the Sustainable Coffee Challenge to help make coffee the world’s first agricultural product

By William (Bill) Murray, President & CEO, National Coffee Association


Here at the National Coffee Association (NCA), we like to say that “we serve coffee.”

With the rising threat of climate change, serving coffee today also means serving the planet. We know coffee’s future depends on coffee being the world’s first fully sustainable crop.

To help make this vision a reality, I am immensely proud that the NCA has joined the Sustainable Coffee Challenge.

(Read the official news release.)

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Consumer Insights: Coffee Claims [Video]

From sourcing to roasting, coffee companies can have a lot to say about their product. These messages can majorly influence consumer perception and behavior – but not necessarily in the ways you’d expect.

A new NCA Consumer Insights report (based on NCDT data) takes a closer look at coffee claims – which include general statements, perceptions, or things that people find motivating about coffee.

For example, said Cheryl Hung, VP of Research at Dig Insights, during a recent webinar: “What kind of equity does coffee have with consumers? Are there positive and negative associations with coffee among different demographics? Who perceives coffee in a negative light? And what can we say to persuade them from a marketing perspective, or via point of sale?”

Get more highlights in the video below – and to learn more, check out the webinar (on-demand playback free for members) or NCA market research:

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Practical Solutions for Sustainable Coffee Supply Chains

The 4C Global Sustainability Conference will take place in Berlin on June 6, 2019

via 4C

How can you implement sustainable supply chains in times of low coffee prices? What is the impact of sustainability certification? How can you use innovative technologies and integrate smallholders?

The 4C Global Sustainability Conference in Berlin will address these questions – and more.

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NCA Member Spotlight: JNP Coffee

Photo: JNP Coffee

COMPANY: JNP Coffee
LOCATION: USA & Burundi
NCA MEMBER SINCE: 2018
TWITTER: @jnpcoffee
FACEBOOK: /JNPCOFFEELLC
INSTAGRAM: @jnpcoffee

Read more NCA member spotlights, or check out our complete list of members

What does JNP Coffee do?

We trade the very best East African specialty coffee from Burundi, while empowering women farmers with technical knowledge and unparalleled bonus/premium payments.

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Pot Head: The Coffee Cannabis Connection

Coffee is a complex substance and — as a new study finds — its metabolic interactions are equally complex.

Coffee influences the same regions of the brain as cannabis, according to recent research.

By Tim Newman| Fact checked by Jasmin Collier

Read the full article at Medical News Today

Visit the NCA Guide to Cannabis & CBD for Coffee Companies


Although studies looking at coffee’s health benefits — or lack thereof — appear to be published on an almost daily basis, its true impact on health is still poorly understood.

Some studies have found health benefits, some have concluded that it might reduce mortality risk, and others drew no solid conclusions.

This confusion is due to several factors, and one is the difficulty in separating cause and effect in large, population-based studies. For example, someone who drinks a lot of coffee might also sleep less, smoke more tobacco, drink less water, or work unsociable hours. These factors muddy the statistical waters.

Also, coffee is an incredibly complex beast; it contains more than 1,000 aroma compounds, levels of which vary depending on the type of coffee bean and how it is brewed.

Researchers from Northwestern University in Chicago, IL, took a detailed look at the impact of coffee consumption on our internal chemistry. Their findings were published this week in the Journal of Internal Medicine.

The scientists found that with increased coffee consumption, blood metabolites involved in the endocannabinoid system dropped off. This is the system that gives cannabis its recreational and medical effects.

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