Poor Farmer

By Leslie Josephs The Wall Street Journal March 22, 2011 NEW ORLEANS—Some of the world's largest coffee companies are paying farmers more for the increasingly costly beans, but don't chalk it up to corporate responsibility. Ensuring supplies of coffee in the long term is vital, even at a higher price, executives say. Coffee prices have surged over the past year, largely due to production shortfalls, burning companies—and consumers—with higher costs. U.S. coffee roasters and retailers Starbucks Corp., Kraft Foods Inc. and Massimo Zanetti USA raised prices last week under pressure from climbing green-coffee costs. Arabica coffee futures on IntercontinentalExchange have risen more than 50% over the last six months after bad weather clipped output in top-producing nations such as Colombia. But the near-record prices fetched by mild washed arabica beans, prized by coffee drinkers for the rich flavors they produce, may not be enough to persuade farmers to expand produc...

Reuters March 19 , 2011 At least three U.S. roasters announced this week that they were raising coffee prices after arabica coffee futures fell from a 34-year high. Kraft Foods Inc (KFT.N), one of the top coffee roasters in the United States, raised prices for many of its roast coffees by 22 percent, marking its fourth and biggest price hike in a year, effective on March 16. On the same day, Massimo Zanetti Beverage USA raised the cost of its well-known brands including Chock Full o'Nuts, by an average of 12 percent. On March 18, Starbucks Co (SBUX.O) said it would raise the price of its packaged coffee by an average of 12 percent. Even robusta coffee, typically processed into instant coffee or used as a cheaper alternative in roasted blends, has joined the rally and on Friday hit a three-year high at $2,672 per tonne, basis May LRCc2. Roasters have widely been forced to raise their prices sporadically since June 2010 when the rally began, initially spurred by fund bu...

By Gerry Spratt SEATTLEPI.COM March 16, 2011 Starbucks is in talks to buy Peet's Coffee & Tea Inc., dealReporter.com reported Wednesday. Peet's, based in Emeryville, Calif., has long been cited as the inspiration for Starbucks and was Seattle-based Starbucks' original supplier of beans in 1971. Peet's sells coffee and tea through a chain of 192 stores, and in grocery stores. DealReporter said its grocery sales increased 24 percent last year. According to the dealReporter report, Starbucks is seeking to acquire businesses over the next 18 months. Starbucks said in a statement that it does not comment on "market rumor or speculation." Peet's didn't comment on the report. DealReporter said Peet's tried earlier this year to buy Diedrich Coffee, but was outbid by Green Mountain Coffee. Green Mountain recently entered into a deal to sell Starbucks coffee for its Keurig single-serving machine. See the dealReporter story here . ---...

He’ll be out a job and you’ll be without your daily coffee fix if we all don’t get our heads out of our asses and admit that global warming is real. By Diane Keeney Death and Taxes Mag March 11, 2011 As coffee yields plummet in Colombia due to unusual weather patterns connected to global warming, coffee prices will continue to rise. And maybe, just maybe, when their wallets are emptied and the caffeine withdrawal kicks in, the naysayers and the nihilists will admit that we’ve really done an irrevocable disservice to our planet. Colombia is the largest producer of Arabica coffee in the world and the second largest producer of coffee overall. According to the New York Times, Colombia produced over 12 million 132-pound bags of coffee in 2006, aiming to raise production rates around 2% by 2014. Last year’s production didn’t even make 10 million bags. While the country’s location on the the lush Andes mountains makes Colombia one of the prime regions in Latin America for shade-g...

Commentary: Working with Starbucks is hardly without risk By MarketWatch March 10, 2011 SAN FRANCISCO (MarketWatch) — A word of advice to Green Mountain Coffee Roasters Inc.: Be careful who you invite over for a cup of coffee. After a tense standoff in the fast-growing world of single-cup brewing, Green Mountain (GMCR 60.58, +16.94, +38.82%) and Starbucks Corp. (SBUX 37.85, +3.31, +9.58%) have joined forces. According to their joint statement, Starbucks will add its powerful brand name to the lineup of coffees and teas available in K-Cups for use in Green Mountain’s Keurig brewing machines. In exchange, Vermont-based Green Mountain gets to place its Keurig single-cup brewers in Starbucks stores, gaining instant access to millions of coffee lovers via thousands of outlets across the planet. This marketing bonanza sent Green Mountain shares soaring as much as 40% Thursday. And to think, less than a month ago Starbucks was making ominous comments about how it intended to crush...

Photo illustration depicts the potential appearance of a Starbucks single-serve cup for Keurig brewers from Green Mountain - MarketWatch Starbucks arch-rival Peet’s Coffee & Tea’s shares drop on the news By Matt Andrejczak and Andria Cheng MarketWatch March 10, 2011 SAN FRANCISCO (MarketWatch) — In a deal set to stir up the single-cup coffee brewer market, Starbucks Corp. and Keurig brewer parent Green Mountain Coffee Roasters Inc. said Thursday that Starbucks coffee and its Tazo tea will be sold in Keurig’s K-Cup portion packs. The long-speculated-on deal sent Green Mountain shares (NASDAQ:GMCR) surging 38% as some investors had wondered if Starbucks would sell its own single-cup brewing machine to compete with Green Mountain. Thursday’s deal doesn’t prevent Starbucks from doing so in the future. Seattle-based Starbucks’ shares (NASDAQ:SBUX) advanced 9%. Both stocks traded at 52-week highs. Emeryville, Calif.–based Peet’s Coffee & Tea Inc. (NASDAQ:PEET) was ...

By Leslie Josephs The Wall Street Journal March 8, 2011 Arabica coffee futures hit a nearly 14-year high, as a pound of unroasted beans fetched nearly as much as a cup of brewed gourmet coffee. Worries that scarce supplies won't be able to keep up with increased demand sent arabica for May delivery up 3.1% to settle at $2.8115 a pound on the IntercontinentalExchange, the highest price since 1997. The front-month contract, for March delivery, ended up 3% at $2.8095 a pound. Bad weather in Central America and Colombia have kept prices high, with Arabica coffee prices rallying more than 46% over the past six months. On Monday, few shipments out of top coffee producer Brazil helped fuel the surge in prices. Shipments have waned because of the Carnival holiday. "There's not too much selling around so that gives it more upside potential," said Rodrigo Costa, an analyst with brokerage Newedge. The International Coffee Organization has said global supplies l...

Highlight: * Weather, global market boosts prices * Buyers turn to other producers regionally By Helen Nyambura-Mwaura Reuters March 7, 2011 KOMOTHAI, Kenya - In Kenya's coffee growing area of Komothai, record prices at auction have farmers dreaming of a better future and driving to improve their crop. Record high commodity prices have rattled finance ministeries in the West, but poor growers see things differently -- especially in Kenya where reforms now mean more profits trickle down to them. Coffee from the local co-operative society fetched $1,011 per 50-kg bag in January, a heady price for any coffee farmer around the world. "Now you can build a house, you can pay school fees, you can buy inputs. Before this, you couldn't do any of that," said Duncan Kimani, 52, pruning excess twigs off bushes with green berries that will be ready for harvest in April. "Now we can live like humans." Kenyan coffee prices have hit records this year -- ...