In the coffee world, success is a question of managing countless variables.
Farmers need to take into account the particular characteristics of the coffee varietals they grow, elevation, sunshine, shade, soil quality, precipitation, ripeness, and so on, while also avoiding pests that can destroy whole harvests. Coffee roasters control temperature and timing down to the decimals, while baristas weigh out coffee and water to the gram, mindful of water temperature, extraction time, and the flavors they want to highlight in a given coffee.
The biggest risk falls on the coffee grower at the base of the chain, whose livelihood depends on the harvest each year. But since the coffee commodity market is notoriously volatile, even successful harvests can bring lackluster returns.
Here's what the price of coffee looked like over the past 45 years:
"Coffee Prices—45-Year Historical Chart" from www.macrotrends.net. Price per pound, unroasted, in USD.
The philosophy behind our Direct Trade program is simple: if we can minimize the negative impact of one big variable—coffee's C-market price—for our farmers, then they can focus on the variables within their control to ensure the long-term success of their farms.
PT's pays its Direct Trade partners (individual farmer or co-op, as the case may be) a minimum of 25% above the C-market price for high-quality coffee. Often, the difference is much more pronounced. Here's what it looked like over the past 3 years:
(As another reference point, the 2016 Fair Trade Almanac reported a Fair Trade Minimum Price of $1.40/lb.)
Our additional financial support allows farmers to invest in infrastructure, like coffee processing equipment and irrigation systems; sustainability initiatives on their farms; and social programs in their communities.
And the benefits at the consumer's end of the chain are undeniable—the proof is in the cup. Our customers get to drink excellent coffee produced by dedicated farmers who are paid a fair price for their product. Cheers!