A coffee farmer inspects his crop in Colombia. Photo: Neil Palmer (CIAT) – via Wikimedia
Perspectives on the New SCA Report On Farm Profitability
In an article published on Daily Coffee News, Kraig Kraft from CRS Coffeelands addressed the Specialty Coffee Association’s recently released report that reviewed existing public information about farm profitability and costs.
The main — and surprising — conclusion from the analysis is that farm yield is not correlated to farm income. On the surface, this seems somewhat paradoxical.
Why wouldn’t higher production lead to more income?
When it comes to coffee, convenience is crucial. Fortunately, a cup of coffee is never far from reach for the majority of U.S. consumers.
More people are drinking coffee out-of-home than ever, reaching a high of reaching a high of 46% in 2017, according to the NCA National Coffee Drinking Trends report. And they’re also opting for more specialty and gourmet beverages.
New market research from the NPD Group shows that coffee shops are popping up across the country to meet this increasing demand. In addition to coffee served at restaurants and other foodservice outlets, there are now 33,129 gourmet coffee shops in the U.S., a 2% increase in units from last year.
Additional highlights from NPD’s Spring 2017 ReCount restaurant census include:
The following post is from the latest NCA Member Alert.
On Thursday, Republican leaders announced that the controversial border adjustment provision, which threatened to saddle coffee imports with duties that could have added as much as 20% to declared values, has been dropped from the proposed tax plan.
“While we have debated the pro-growth benefits of border adjustability, we appreciate that there are many unknowns associated with it and have decided to set this policy aside in order to advance tax reform,” House, Senate and White House leaders working on a tax plan said in a joint statement Thursday, CNBC News reports.
Editor’s note: Next month, the global coffee industry will gather in Medellin for the World Coffee Producers Forum to explore how to strengthen farmers, discussing sustainability, labor, managing price volatility, and improving productivity and yields. Here, Frederick Kawuma, Secretary General of the Inter African Coffee Organization (IACO), sets the stage for these discussions by providing an overview from the producers’ perspective.
Coffee farmer Feleke Dukamo checks the latest coffee prices. Source: Wikimedia Commons
By Frederick Kawuma, Secretary General of the Inter African Coffee Organization (IACO)
There has recently been a spate of studies analyzing the income of coffee farmers. The first thing that becomes evident is that the income from coffee farming varies depending on the country, and even the region within the country, where the studies have been done.
The second thing that becomes evident is that the income from coffee farming depends on the price the farmer gets for his coffee, which depends on “the market.”
“As a regressive tax borne largely by consumers, the proposal can hurt […] hundreds of independent roasters, coffee shops, restaurants, retailers, and suppliers. Aimed at promoting a healthy diet, the tax would have the opposite effect if applied to coffee.” – William M. Murray, CEO, NCA
The Seattle City Council will vote on introducing a “soda tax” in the city on Monday. The measure would put a one-cent per ounce tax on sugary beverages, and would impact coffee as collateral damage. Furthermore, small businesses would be disproportionately affected.
The National Coffee Association has submitted the following letter to the City Council to express the industry’s strong position on how the tax would severely impact the local coffee economy and that coffee should be exempt should any soda tax be ratified.
Read the full NCA comment letter.
In the News
Is Seattle’s proposed soda tax also a tax on sugary lattes?
Tell the Seattle city council that levying a soda tax on coffee would have unintended and unanticipated consequences for the coffee industry and local businesses. Send an email to email@example.com, or call 206-684-8888.
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The following is an excerpt from the NCA Member Alert
A Border Adjustment Tax (BAT) could mean a 15% or 20% import tax on coffee. That’s why the National Coffee Association went to Washington last week to lobby against it.
By William (Bill) Murray, CEO, NCA
The 2016 U.S. presidential election provoked deep passions across the U.S. that continue to be felt today, as the policy implications continue to unfold.
Last December, we took a first look at how coffee-related policies might be impacted by the election, while conceding that there was much yet to be discovered about the new administration.
Among the various initiatives under discussion by the new administration, a “border adjustment tax” potentially has huge implications not only for the coffee sector, but for every coffee drinker in the U.S. – more than 180 million Americans.
Most ironically, in the case of coffee a “border adjustment tax” could raise the price of everyone’s daily coffee, while not having the intended effect of “bringing jobs to America.”
The global coffee market continues to brew up a storm, and Asia is playing a key role in its growth.
New research from Mintel reveals that three out of the five fastest growing retail coffee markets are in Asia. Indonesia is currently the fastest growing packaged retail coffee market with a CAGR of 19.6% over the past five years, while India has had a CAGR of 15.1%, and Vietnam 14.9%.
This popular pick-me-up fuels not only our daily energy levels, but the global economy as well.
By Vivian Giang, Fundera
The way Americans drink coffee has changed drastically. According to the New York Times, Americans drink less coffee today than we did in the past, but we’re drinking higher quality, better brewed cups.
In fact, according to a 2014 National Coffee Drinking Trends study from the National Coffee Association (NCA), daily consumption of gourmet coffee among adults in the U.S. is up 34% in 2014, a 3% rise compared to 2013.