Apr 142016

Mexico is the world’s ninth largest coffee producer and second largest producer of organic coffee. However, coffee production in Mexico in recent years has been affected by adverse weather conditions (untimely rainfall, frosts, excess humidity) which have been ideal for the expansion of coffee rust disease (roya del café) in many production areas. The 2015/16 coffee production forecast is for 3.3 million 60/kg bags (sacks), the same as the 2014-15 total production, and much lower than historical production outputs of around 5 million bags.

About 35% of Mexico’s coffee production area is located at elevations of 900 meters or higher above sea level; another 43.5% grows between 600 and 900 meters. Coffee grown at the higher elevations is generally higher quality than that grown at lower elevations.

Mexico's exports: coffee

Coffee, one of Mexico’s most important agricultural exports

Mexico has about 500,000 coffee farmers, looking after 600,000 hectares of coffee trees in twelve states. Plantations in the states of Chiapas, Veracruz, Guerrero, Oaxaca, and Puebla account for about 93% of total production. Almost all coffee-growing areas have been affected by outbreaks of coffee rust. The most affected states are Veracruz, with about 70% of the area affected, and Chiapas with about 60% of the area affected. About 40% of the coffee planted area nationwide has been affected somewhat by coffee rust.

Coffee rust is a fungal disease that can cause plant defoliation. In moderate cases, leaf defoliation reduces plants’ ability to produce fruit (the seeds of which are the actual coffee bean). In serious cases, the trees will die. The rust has spread northward from Central America, and reached Chiapas 4-5 years ago.

The Agriculture Secretariat (SAGARPA) has responded by installing about 35 nurseries in states most affected, growing coffee plant varieties resistant to rust. But these trees will need about 4 years to come into production so government officials do not expect coffee production to rebound until 2019. Sagarpa’s objective is to renew at least 250,000 hectares before the end of this administration’s term in 2018.

The SAGARPA program, aiming to increase coffee production and productivity, includes US$83 per producer as incentive, technical assistance packages of up to $140 dollars per hectare, and 500 coffee plants to renovate coffee plantations, as 80% of plants are old and less productive and often rust-prone.

However, coffee organizations complain that resources are not reaching the affected areas fast enough and that program implementation has been too localized instead of having a nation-wide strategy.

Some state governments and international companies are offering support for various types of price-enhancing certifications such as organic, Fair Trade etc. Some indigenous communities are planting their coffee trees among other trees like lime and avocado to diversify production and provide shade that helps coffee quality and enhances eligibility for value-added certifications like Rainforest Alliance and Shade Grown.

As production techniques continue to evolve, some producers have increased plant density from 2600 plants per hectare to 5000 plants per hectare.

Recent figures suggest that about 96% of Mexico’s coffee is of the Arabica variety. The remaining 3-4% is the Robusta variety, used in the production of instant coffee. Mexico is importing large quantities of Robusta variety coffee beans as the large Nestle plant in the city of Toluca has been increasing its output of instant (soluble) coffee. However, Nestle has also increased the use of Arabica coffee in its products. SAGARPA is now supporting the planting of Robusta coffee to decrease coffee bean imports and to support Mexico’s goal of becoming a major producer of soluble coffee.

Mexico is also producing excellent organic coffee, a trend which is increasing among producers. However,  coffee rust has hit areas of organic coffee more than conventional plantings. According to SAGARPA, about 7 to 8% of growers are cultivating organic coffee, mainly for export.

About 40% of Mexican coffee production is marketed for local consumption, according to AMECAFE, and the remaining 60% is for export. The USA continues to be the main international market for Mexican green coffee beans.

Domestic consumption

Coffee consumption in Mexico has been increasing, with estimates of up to 2.6 million 60 kg. bags total usage this year, and consumption (of roasted and soluble coffee) at between 1.3 and 1.5 kg/person.

The importation of coffee is expected to rise in 2016, in order to meet domestic demand.

Increased consumption has been driven by government and retail advertising and by the growing number of specialty coffee shops in Mexico. (Starbucks alone has opened 500 coffee shops in Mexico). Soluble coffee still makes up about 68% of domestic consumption but ground coffee consumption is increasing among the middle class, whilst high-income consumers often want fashionable value-added imported coffee.

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Nestlé helps program to regenerate Mexico’s coffee industry

 Mexico's geography in the Press  Comments Off on Nestlé helps program to regenerate Mexico’s coffee industry
Jan 282012

Coffee trees are planted on 688,000 ha in 12 states, mainly in southern Mexico. The main coffee-producing states are Chiapas, Oaxaca, Puebla, Veracruz and Guerrero. As we reported in an earlier post, Mexico is financing a program to gradually replace aging coffee trees. The average yields of coffee in the 2010-11 season did show a slight increase on previous years. Officials hope this is the start of a trend of higher yields as the older trees are gradually replaced. The program to replace coffee trees is being supported by Nestlé, the Swiss food corporation.

Between 2002 and 2010, more than 4,000 growers in several states benefited from Nestlé’s distribution of more than 3.9 million coffee plants as part of a nationwide plan to replace aging coffee trees. Nestlé has since announced that it plans to establish its first coffee-propagation center in Mexico, in the southern state of Chiapas, in a joint venture with Agromod, a Mexican crop technology company, and the National Forestry, Farming and Fishing Institute (Instituto Nacional de Investigaciones Forestales, Agrícolas y Pecuarias, INIFAP).

The project will supply 30 million coffee plants by 2020, and mean that Nestlé will no longer need to import coffee plants to Mexico from its facility in Tours, France. As many as 20,000 coffee-growers will benefit from the project. Most of the new plants will be arabica varieties (for premium beans); the remainder will be robusta varieties (used in instant coffee blends).

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Mexico’s Fair Trade coffee faces an uncertain future

 Updates to Geo-Mexico  Comments Off on Mexico’s Fair Trade coffee faces an uncertain future
Aug 302011

An earlier post looked at why Mexico’s coffee harvest was unlikely to meet expectations this year. The 2010-11 harvest, hit by poor weather, totaled a disappointing 4 million 60-kg sacks (240,000 metric tons), almost entirely Coffea arabica and about 70% destined for export. This post looks at some recent trends relating to the production and consumption of coffee in Mexico.

Mexico is the world’s seventh largest coffee producer (after Brazil, Vietnam, Indonesia, Colombia, India and Ethiopia) and one of the leading suppliers of organic, shade-grown coffee. The nation’s 480,000 coffee growers, most working small parcels of land less than 5 hectares (12 acres) in size, are concentrated in the states of Chiapas, Veracruz and Oaxaca.

Mexico’s domestic consumption of coffee

Despite being one of the world’s leading coffee producers,Mexico’s domestic consumption averages only 1.2 kg (2.6 lbs) per person each year. While this figure has doubled since 2000, is is still only about half the equivalent figure for the coffee-growing Central American nations, and way below consumption in wealthier countries such as world-leader Finland (12 kg per person) or the USA (5.5 kg per person). Domestic consumption is rising but remains low.

Yields need to rise

According to Amecafe (Asociación Mexicana de la Cadena Productiva del Café), a major growers’ organization, global climate change is expected to have an adverse long-term effect on prices and on the sustainability of coffee-farming in Mexico. In an effort to raise yields of coffee to at least 12 quintals/hectare (19 bushels/acre) within 3 years and to 20 quintals/ha (32 bushels/acre) eventually, Mexico’s Agriculture Secretariat has announced financing of 16 million dollars for a program to gradually replace aging coffee groves in 12 states.

Fair trade coffee faces uncertain future

Soaring coffee prices might signal the beginning of the end for Fair Trade coffee. Much of the world’s specialty coffee comes from small-scale growers in Latin America, including Mexico, and much of it is marketed as “organic” or “fair trade”. After a decade of depressed prices, wholesale and retail prices for coffee have risen sharply in the past year. US retail prices have risen more than 20%; the price of coffee on international commodity markets has risen almost 60%.

The higher prices should be good news for growers, but as Kevin Hall points out in “Coffee prices being pushed by speculators” this is not necessarily the case. Many co-operative marketing organizations, including those considered socially-responsible or “Fair Trade”, do not have the resources to pay the new higher prices and acquire sufficient coffee to meet their existing contracts. This means they can no longer compete against the well-financed middlemen who specialize in purchasing coffee for regular distribution via commodities markets and major buyers. Farmers want the maximum return they can get on their crop, and they want it on delivery, which makes life difficult for any fair trade co-operative that lacks strong financial resources.

Further statistics:

  • USDA (US Department of Agriculture) June 2011 update on coffee (pdf file).

Related post:

Feb 242011

Mexico is the world’s seventh largest coffee producer and one of the leading suppliers of organic, shade-grown coffee. The nation’s 480,000 coffee growers, most working small parcels of land less than 5 hectares (12 acres) in size, are concentrated in Chiapas, Veracruz and Oaxaca, and produce 268,000 metric tons a year. While Mexican coffee consumption per person is rising, 62% of the harvest is exported, bringing in $400 million annually.

This year’s crop escaped the deep freeze in late January and early February that decimated corn, tomatoes, bell peppers and other crops in northern Mexico, but unseasonal rains and cold weather in coffee-growing regions of southern and eastern Mexico have reduced coffee yields and mean that this season’s crop is also ripening unevenly. Some growers are worried that this could be the worst coffee harvest in almost 20 years.

Mexico's exports: coffee

Coffee, one of Mexico's most important agricultural exports

With fewer berries on each plant, the potential earnings for coffee-pickers are poor, since it takes longer to fill each basket with ripe berries. Some experienced coffee pickers are looking for alternative employment hoping for better pay. According to growers, the less experienced pickers remaining on the job are causing more damage to the bushes than normal, because they employ a hand picking method known as “ordeñando” (milking) in which they run their hands rapidly along a branch, stripping away the leaves as well as the beans. The problem for growers is that this technique reduces the following year’s crop.

The 2010-2011 harvest season began in October. Government officials are still estimating a harvest of 4.4 million 60-kg sacks, which would be a total of about 264,000 metric tons. However, Agroindustrias Unidas de México, Mexico’s largest coffee exporter, believes that 3.5 million sacks will be nearer the truth. If the exporter is correct, the current harvest would be only marginally better than Mexico’s 1992-1993 harvest which was the lowest in the past twenty years.

The only silver lining in this cloud is that coffee prices on international markets are high and rising, mainly due to problems in Colombia, so Mexican growers have a good incentive to pick every single ripe berry they can find.