Apples to Apples

Inspired to dive deeper into the price of coffee, I have broken down only a section of the cost of coffee which I feel is often overlooked and misunderstood.  The document below shows the costs between FOB (free on board) and the arrival of green coffee to the buyer’s roasting facility.  FOB is the price paid to the country of origin entity that has purchased coffee (perhaps still in parchment from a local coffee farmer), and has prepared it for exportation. Preparation for export includes many steps, including the final drying (in some cases), milling, sorting, physical grading, and sensory evaluation of each farmer lot. The “farm gate” price is sometimes available to buyers, and is often hard to acquire, even from cooperatives that are certified as fair trade.  It is easy to obtain a price from a cooperative, but to break it down to individual members and the price they actually took home after paying their fees for processing, dues, and other added expenses, it typically becomes a huge challenge.  Not only that, each farmer has a different set of financial situations to deal with, so they may receive more or less than the next farmer.  Anyhow, I hope this document simply demonstrates that there is no easy answer, but if you are asking “how much does the farmer get”, make sure that when a roaster says “the FOB price is xxx” that this doesn’t really mean much at all, unless you are asking how much the exporter charged the importer or roaster for the final lot in which they evaluated.  Apples to Apples (FOB to Roaster)