Central America coffee farmers cut out the middleman

Costa Rican coffee farmer Susana Trejos has seen nearby plantations disappear with the boom-and-bust cycle of coffee prices. Her family's survival plan is to transform coffee from a common cup-of-joe into a high-end product like fine wine.
The Trejos plantation is part of a growing movement in Central America where coffee producers are cutting out the middleman, milling beans on their own and hooking up directly with specialty roasters willing to pay top dollar. In 2002, the Trejos' Don Ramon Coffee Estate in southern Costa Rica nearly went out of business when global coffee prices collapsed and a local mill shut down.
They saved the farm by building their own mill where they can tightly control quality demanded by discerning clients around the world. "We innovated by creating a brand that was our farm," said Trejos. "We had to evolve so as not to disappear."
The trend is known as 'direct trade' and is competing with other marketing tools for farmers like certified or organic labels to appeal to coffee connoisseurs. "There's a change: you're not a coffee cherry producer any more. You are a coffee entrepreneur," said trader Francisco Mena, who brings farmers and roasters together at his sleek office outside of Costa Rica's capital San Jose.
Mena leads workshops for growers trying to improve the quality of their "cup," what professionals call the unique flavour mix that can come from a particular coffee bean. Growers can sell high-end coffee to foreign buyers for premiums of up to $1.50 per lb above market prices. Arabica's September contract on ICE in New York is trading around six-month lows at $2.3720 per lb.
Even higher prices are fetched at Internet auctions. Panama's coveted geisha beans, often described as the champagne of coffee for its subtle jasmine-like flavours, sold for $170.20 a lb in a record online auction deal last year.
Thomas Nottebohm, the head of Guatemala's coffee exporters' association, says he has seen coffee giant Starbucks buying less in Guatemala and Costa Rica in recent years, leaving producers looking for alternatives. Starbucks has declined in the past to provide details on its purchasing. But direct trade still represents a tiny sliver of the coffee market. "The farmer and exporters are looking to fill the demand void with micro lots (but) it's like putting a bit of sand to stop a flood," Nottebohm said.
Costa Rica's coffee institute says the country has seen a boom in "micro mills," machinery to pulp and process coffee cherries on individual farms. There are now more than 150. Low-interest bank loans help producers buy the equipment with a price tag of between $50,000 and $200,000. Traditionally co-operatives and large mills mix beans from many farms together, making quality harder to ensure.
Specialty buyers like US-based Intelligentsia Coffee & Tea, which buys from 21 countries in Latin America, East Africa and Indonesia, say their customers want to trace beans back to a single farm and are shying away from co-operatives. "You need to make sure the land is handled well, because you can have a good crop this year but if you don't have good husbandry, then next year's is not going to be great," said Sarah Kluth, a green coffee buyer at Intelligentsia. The company is roasting 15 percent more coffee each year.
Guatemala, which vies for Honduras to be the region's top coffee exporter, is creating a computer search system where roasters can track satellite location, plant type, altitude and rainfall at particular farms. "The advantage of micro mills," said Wayner Jimenez, a Costa Rican barista and expert cupper, "is you achieve a cup that's sweeter, more complex, with very exotic hints of fruits and spices, caramels, sugars, chocolates. All sorts of flavours that can only be achieved with care."