Welcome to another edition of Field Notes! In this month’s edition, we’ve got a report from a recent trip to Brazil, plus some great coffees available now!
Insights From a Trip to Brazil
I traveled to Brazil with a client group at the end of August to accomplish a few goals: we wanted to see some milling activity and processing, and do enough cupping to determine cup quality and work on some blend development. We were not expecting to see harvesting or too much farm activity. Our timing was perfect for this.
I had a secondary mission also. There has been enough confusion and concern over the state of US tariffs that I was eager to have discussions with producers, millers and exporters to understand their perspectives.
We drove first to areas of Sul de Minas. The coffee trees looked as healthy as they do following a harvest, and there were areas of new plantings, likely a result of the ongoing favorable pricing. Weather conditions had been slightly unsettled and like any trip to Brazil there was much hand-wringing over how not-perfect things were. “Last week was so cold.” “It has been much too dry.” Our days in the countryside were sunny and warm, with temperatures in the comfort zone and rain forecast for the weeks ahead. So I wasn’t ready to participate in the pessimism.
Producers have enjoyed record prices for a few years now and have been able to reinvest on their farms. In addition to the areas of new coffee fields, fertilizers, pest control, irrigation, other inputs, field equipment upgrades, and farm processing upgrades were among the expenditures these producers have comfortably been able to make.
Conilon harvesting was complete and there was only a smattering of arabica picking going on in some areas. Producers agreed that yields were down this harvest. Exporters later agreed that yields were down enough that it would impact prices and dampen supply to the point that they were open to discussing canceling or delaying shipments to the US due to tariffs.
But at this time the producers remain firmly in control. There is no rush to sell anything. Market bumps are the main times they will consider parting with coffee when they can command prices in the record territory of 2,000 to 2,500 reais per bag. And even in these conditions exporters complain about the unrealistic expectations of those who ask for 2,750, 3,000 reais/bag! By this time deep into August the warehouses were far from full. A majority of coffee is still being stored at the farm level. This was evidence of the producers’ patient approach.
We visited warehouses in Patrocinio and Machado where the machinery was humming, though not at peak levels. This was another clue about current export demand.
In Santos, export offices reported better bean size than previous years so we can expect a less dramatic price difference between grades. This news is tempered by some quality concern: Cup scores are slightly below average for this time of year. We cupped a lot of coffee and I can’t say I noticed any drama over cup quality. Fresh coffee abounded on the tables and we were certainly able to have wide ranging discussions over regional comparisons, grade comparisons, and taste differences. Our goal to create a new grade for our Ito En partners in Japan was straightforward. There was much to choose from, and we were able to mix and match on the cupping table to come up with a number of strong contenders for this new grade.
Discussions with all I met with during the trip included everything regarding the current state of US tariffs. Everyone wanted to ask me a series of questions: why were these new tariffs there in the first place? Why so high on Brazil? How long will they last? When might they change or go away entirely? I had nothing profound or definitive to provide. There was also a lot of wishcasting that Lula would just simply capitulate and do or say whatever it took to get the US to remove or reduce the tariffs.
There was concern around the disappearance of all US offer requests and worry over how Brazil was going to sell eight million bags of coffee this year into already full supply chains. But the slight volume reduction reported so far this year offers some small relief. Exporters were already taking calls from US importers and agreeing to delay and even outright cancel existing contracts for the nearby shipments. If these exporters don’t have to fulfill every contract this month or next it only takes pressure off the need to pay the 2,500 reais the farmers expect. It buys time and pushes the problem down the road. From our side we shared a similar sentiment. As long as we can delay shipments from Brazil, the possibility of something giving way on the tariff front is at least in play.
It was important to visit and reinforce our relationships and partnerships in the face of vanishing forward business between the US and Brazil. I was glad to be there in support of Japan purchases, and to share some hope for resuming normal business transactions sooner than later.
Report by Scott Merle, Senior VP Green Coffee Sales
available now
GUATEMALA, LA FLOR DEL CAFE ANTIGUA
Coming from small producers in Guatemala’s Antigua region, La Flor del Cafe is an excellent option for roasters looking for a crowd-pleasing coffee for their lineup. Its heavy body and notes of citrus and sweet milk chocolate make for a sure winner.
Availability: CTI NJ, Annex CA, Dupuy Houston
Certifications: N/A
Cupping notes: Chocolate, caramel, citrus
SUMATRA, MUTU BATAK
Our latest shipment of Mutu Batak has arrived on the east coast. This coffee, which comes from one of our longest-standing partnerships, is a great example of everything that makes Sumatran coffees special.
Availability: CTI NJ
Certifications: N/A
Cupping notes: Dark chocolate, grapefruit, leather
UPCOMING EVENTS
Portland Coffee Festival, Oct. 4
La Minita’s Scott Merle will be presenting an educational session, Exploring Coffee Processing Methods. Using guided tastings, attendees will examine how both conventional and experimental processing techniques shape the flavor of coffee.
Coffee Fest Orlando, Oct. 24-25
We’ll be exhibiting at Coffee Fest Orlando next month. If you’re attending, be sure to stop by booth #522 to say hi and try some of the great coffees we’ll be brewing. We’d love to see you!
That’s all for this month’s edition. Thanks for reading, and as always, if there’s anything we can do for you, reach out to your salesperson or fill out our contact form and we’ll get right back to you. See you next month!