Coffee

There’s a decent article over at the Globe and Mail about Uganda, and specifically, coffee.

But for all of us, something to think about next time we buy a cup at Starbucks:

The economics of your morning coffee

A Ugandan farmer is paid 90 cents for a one-kilogram bag of green coffee beans, picked from her trees and dried in the sun. She sells them to the agent for an international exporter.

The exporter combines the harvests from thousands of small farmers, has the beans hulled and sorted for size in Kampala, and ships the green beans to a processing facility in Europe or North America, where they are roasted. Because beans shrink in the roasting process, it takes 1.25 kilograms of green beans to make 1 kilograms of roasted.

That kilogram of roasted beans sells for about $11 on the mass market.

(The equation for “specialty coffees”? The farmer gets $6 for the 1.25 kg of green beans that it takes to produce the kilogram of roasted coffee. The exporter sells the kilogram of roasted for $36.)

Your local Second Cup or Timothy’s (Starbucks roasts its own) buys the beans in North America. They use seven grams of ground beans per cup of coffee, which sells for an average of $2. Thus, each kilogram of coffee is now worth $280 — for which the farmer got 90 cents.

In 2001, coffee generated $10.5-billion for more than 50 coffee-producing countries. The total for the consuming countries was $86-billion.