In the last 18 months, TTC has provided insights using data from sources like the Cup of Excellence, Fair Trade Proof, and Coffee Review. We have also analyzed data that accumulate within the TTC platform, like quarterly SCRPI data and FOB prices for registered TTC Coffees. This Insight leverages proprietary pricing data provided by Diego Robelo from his family’s estate in Costa Rica. The sample covers 140 green coffee contracts from three consecutive harvests; 2013/14 through 2015/16.
The first thing we see in these data is the considerable
year-to-year variability in prices paid for green specialty coffees. From 2013/14
to 2014/15, the weighted average FOB price fell by 6.3%; from $2.30 to $2.16.
This reduction was compensated by a larger crop volume in that year (+22.0%).
In the next harvest, the weighted average price rose by 7.3%; back to $2.31.
However, this price increase occurred in a year when crop volume fell by 34.6%!
All of this illuminates the challenges associated with managing vexing price
and quantity dynamics on specialty coffee farms.
A simple regression model – which explains roughly 57 percent of the
variance in FOB prices – produces additional insights about these pricing
First, higher bean quality corresponds with higher prices. This
farm sells coffees in several formats. Relative to the baseline group of
Catadurra coffees, their two Estate coffees sell for premiums that average $0.34
(HB) and $0.42 (SHB) per green pound. More impressively, coffees sold as
microlots had an average premium of $1.03! Farm reports shows that these price premiums
correspond with processing that yields fewer bean defects.
Second, the year-to-year price differences in the raw data are less
obvious after accounting for other factors. Here, it is critical to highlight
the large effect that the Bolsa Price, or the commodity price, has on coffees
that are not themselves commodities. This significant 0.629 coefficient is alarming
when we see that associated commodity prices ranged from a low of $1.13 to a
high of $2.60 during this brief window. Moving from the maximum to the minimum commodity
price corresponds with an average price decrease of $0.92 per green pound! This
is a very tough pill to swallow for a farm that is trying to cover current
operational costs, while investing for a better, and higher-quality future.
Another big driver of green prices is the quantity covered by each
contract. On average, every one thousand pound increase leads to a one-half
penny reduction in price. The quantities in the 140 contracts range from 50 to
The estimated quantity effect means that moving from the minimum to the maximum
corresponds with a price decrease of $0.68 per pound. Although the trade-off
between price and quantity is expected, it also highlights the challenges
associated with looking for the price premiums at the upper end of the
specialty coffee market, where purchased quantities tend to be lower. In this
respect, note that the microlot designation, which by itself corresponds with a
premium of $1.03, is also associated with much lower quantities, just 2,240 pounds
per contract on average.
While some will argue that it is problematic to generalize insights
derived from a single farm in a single country, we would counter that we need
more of these detailed observations to better understand green coffee pricing.
This will help us figure out how pricing processes can be influenced so that
specialty coffee growers can charge enough to cover costs, make investments and
return meaningful surpluses to their families and communities. For these reasons,
we are grateful to Diego for sharing these detailed pricing data with us and
 This estimated quantity effect is lower than the one
reported in a prior analysis of Counter Culture’s transparency reports. Click here to read
that TTC Insight.