What’s That Got to Do with the Price of Coffee Beans?

I give a lot of public presentations about coffee, usually focused on the millions of farmers around the world who are reliant on this commodity for an often meager livelihood. My talks may also cover the proper preparation of coffee, my regular travel with students to Nicaragua, and even the development of a sense of place at the corner café.

During the question and answer period at the end of each talk, I usually get asked one of two questions: “What do you think of Starbucks?” and “What do you think of Dunkin’ Donuts?” The polite answer is the former appears slightly more concerned about the lives of farmers than the latter, and the only large, conventional farm I have been allowed to visit was a Starbucks “Cafe Practice” farm.

When the retail price of coffee is rising — as it is now — price becomes the main area of curiosity. To the question of why prices are rising, my initial inclination has been to answer “I don’t care,” because it usually is not very important. A 10 or 20 percent increase in the wholesale price of coffee would not make a significant difference in the household budget of even the most avid coffee drinker, and the chances of such an increase being transferred to a farm family (where it actually would make a difference) are nil.

So the topic did not interest me until late 2010, when the price increases at the wholesale level became substantial enough that some farmers did start to know about it. The first thing I noticed was that the price was rising so rapidly that some “coyotes” — often unscrupulous middlemen who tend to control local coffee markets — were often able to exceed fair-trade prices.  What could be a very good bargain for farmers in the short term, however, was starting to undermine cooperatives that had taken years to establish. When the price of coffee falls in the future, the farmers may be without an organization to secure prices that meet the costs of production.

In the dominant free-trade model, commodity prices tend to fluctuate, as high prices draw producers and low prices draw consumers in a perpetual see-saw of demand and supply. Conventionally economists recognize the risk inherent in reliance on commodity income in such a circumstance, but it was the distinct contribution of Raúl Prebisch to demonstrate the dependency that arises from the secular decline of commodity prices relative to the prices of manufactured goods over the long term. The “earnings” line in the hypothetical cartoon below models the random fluctuation predicted by conventional economics; the “purchasing power” line models the combination of short-term random fluctuations and long-term decline that dependency theory predicts for commodity producers.

The combination of volatility, long-term decline in terms of trade, and specific historic circumstances led to the severe 1999 coffee crisis, which displaced many thousands of farm families. Some are calling the current, rapid price increases a “second coffee crisis,” because of the dynamic mentioned above that threatens the cohesion of local cooperatives.

California coffee buyer Max Nicholas-Fulmer offers the clearest explanation I have seen for the quick run-up in coffee prices. His January 2011 post on the Royal Coffee blog has, in fact, been republished widely, including on Coffee Buzz and in The Specialty Coffee Chronicle (2011n3).

The article offers several reasons for the increase in the price of coffee futures. The first is that single-origin specialty coffees are beginning to command substantial premiums that in turn are bringing up prices for futures on all Arabica coffees. Second, coffee yields and coffee quality are greatly dependent on consistent climate conditions, and for those conditions to be found in the same locations as specific properties of soil and topography. Nicholas-Fulmer gives several examples of the uncertainty in rainfall and its timing that are resulting from climate change. Finally, he describes the impact of suburban sprawl, which is no longer limited to industrial countries. Even in many coffee-producing countries of the global south, automobile-dependent growth puts farmland in direct competition with suburban land markets, enticing many to leave what has become an unprofitable land use.

As he wrote in January, coffee Certified Stocks (the “C” Market) were trading at $2.45 in New York, the highest it had been since the 1997 bubble, when it had reached $3.20. As I write today, it is even higher, at $2.70, so Nicholas-Fulmer’s observations appear to be relevant for the foreseeable future.

Suggested activities:

1. To learn about the relative prices of coffee at each stage of the commodity chain,  play Kelly Whalen’s game Your Coffee Dollar, which is on the web site for the PBS-Frontline program on coffee in Mexico and Guatemala. The low values the game ascribes to coffee growers are actually optimistic — close to 97 percent of coffee is sold in conventional markets that tend to pay growers even less that the amounts suggested in this exercise.

2. Visit a local, independent coffee shop and inquire about where the coffee comes from, whether price fluctuations are affecting the shop, and how much the staff knows about the production areas of the coffee.

Real Toy Trains

Today, workers who need to access railroad tracks for maintenance and repairs typically reach the work site in a utility truck that has been outfitted with an extra set of special HyRail guide wheels that allow it to follow the tracks.

Through much of the twentieth century, however, dedicated railcars were in common use for bringing small groups of workers to remote stretches of railroad. Like many people, I first became aware of them through images — often humorous — in movies and on television of the old, manual versions known as handcars or pump trolleys. As an undergraduate geographer and avid camper and hiker in the 1980s, I would often fantasize about getting some friends together with some old handcars, packing them with some camping equipment, and setting off for some unique cross-country experiences.

As an undergraduate geography student, I had learned that the United States reached its peak railroad mileage early in the twentieth Century, because nineteenth-century settlement policies had encouraged redundant tracks that were not economically viable in the long run. As railroads consolidated and became more competitive, the total amount of track in use declined steadily, even as the amount of shipping dramatically increased.  This gave me some hope that plenty of abandoned railroads would be available for exploration, and since most tracks have a very low topographic gradient, it would be an easy way to apply my strong interest in transects to otherwise little-known terrain. I never did actually find a handcar, and I also learned that when track is abandoned, it is usually removed in order to recycle the steel. Finding inactive track, therefore, is something that must be coordinated very carefully with active railroad operators!

In real life, I have still never seen the handcars, and I have only seen the motorized railcars  in Mexico. During a 1989 summer term at the University of the Americas Puebla, I enjoyed walking into the town of Cholula each day, often to climb the famous pyramid there. It was near the pyramid that I would occasionally see a group of workers zoom past me in a motorized railcar. (What looked like one pyramid, incidentally, was known locally as las piramides, as the original array of four pyramids was buried by a single, large one, which was in turn buried two more times before being capped by a Catholic cathedral in a most dramatic example of sequent occupance.) They would zip by quickly, before I had a chance to get a photo, so I started having my camera ready whenever I was at the crossing. As far as I was concerned, they were living out the dream of independent rail travel! My preparedness paid off, and I eventually got just this one shot of four men, sporting shiny hard hats and a red safety flag. They clearly were not on a camping trip, but they had looks of satisfaction and purpose; they knew they had the coolest vehicle in town!

As Alexis de Tocqueville observed almost two centuries ago, civil society in the United States is remarkably robust, with an organization to be found for even the seemingly most obscure interests. I should not have been surprised, therefore, to learn of a nationwide network of people interested in these fun little carts. The Boston Globe article Dreams realized, On a Small Scale was my introduction to NARCOA, the North American Railcar Operators Association. Its 1,800 members share advice on finding and maintaining the vehicles — the classified ads on the NARCOA web site are most enticing! Most importantly, NARCOA members organize excursions, for which they carefully assure that clear track is available.

The  Boston Globe article cited above describes such an excursion in New Hampshire, and the online version includes a video.  The video conveys two important things to me: first, this is a great way to explore landscapes, at a moderate speed and from a unique vantage point. Second, the movement of these little machines can be just as spritely as I remember from the Cholula encounters.

Suggested Activities

1. Topographic maps. Identify any section of train track on a USGS topographic map at 1:24,000 or 1:25,000 scale.  Look carefully at contour lines (and possibly benchmarks) to identify the elevation at each end of the section. Measure the length of the section and change in elevation to identify the average slope of the section.  Then, identify the elevation at regular intervals along the track in order to graph a vertical profile of the track. The vertical axis of the graph should be at a different scale than the horizontal axis, to provide vertical exaggeration.) Repeat the process with streams and roads in the same area, to see how much effort may have been made to minimize slopes on the railroad. If the railroad passes through hilly or mountainous terrain, look for evidence of road cuts in the contours.

2. Railroads. Railroad museums can be found in cities and towns throughout North America, and are excellent places to learn the historic geography of a region or of the whole continent. From single box cars preserved on a town green to major installations such as the B&O Railroad Museum or the Golden Spike National Historic Site, railroad museums provide insight into the economic geography of the past, as well as patterns of migration and vernacular landscapes. (A small, extraordinary example is the Children’s Holocaust Memorial in Tennessee, housed in a boxcar that had been used in the Holocaust.) Similarly, railroad hobbyists — from railcar owners to model collectors to trainspotters — have learned a lot about geography from the pursuit of their hobbies. Identify a museum and/or an association of railroad enthusiasts in your area, and pay a visit. Write a short essay about the local geography lessons you learn in the process.

Garden Tales

This year, my family has been recognizing the anniversary of each state’s admission to the United States in a project known as Celebrating the States.  For each state, our celebration includes watching one film that relates to the state. Of course, thousands of films have been produced in California, so we chose a title that tells a particular story about California. Given our great interest in the geography of food, we selected an independent, documentary film called The Garden.

The film describes a community garden that was located on 14 acres occupying two city blocks to the north of 41st Street, between Long Beach Avenue and Alameda Street, in an area of South Los Angeles known as South Central LA. The farm was funded by the city of Los Angeles as part of  a multi-faceted approach to healing the city after the deadly 1992 Los Angeles Riots. The garden became the largest community garden in the United States — part of a continent-wide movement that encourages members of a community to grow some of their food on shared land. Connecting people to the land helped connect them to each other.

The film describes how the garden came to be destroyed, despite its many benefits to to the South Central community. The land on which the garden was created had been purchased by the city using imminent domain, which is a legal method of forcing the sale of property at a current fair-market price to a government for a public purpose. In this case, the man who originally sold the land to the City of Los Angeles was able to purchase it back, years later, for the same price. Once he did that, he exerted his private property rights over the land, including the right to evict the gardeners.

In the end, the garden was defeated, but not the gardeners. The landowner demanded millions of dollars to avoid the eviction, but demolished the garden even after they raised the full amount from foundations and other donors. The South Central Farmers continue to farm, on a more extensive piece of land in California’s Central Valley, and to truck the produce into the city. The new location is a better fit with the neoclassic  von Thünen model, which posits that vegetable crops will be found at a modest distance from an urban place, rather than in the city itself.

This film relates in several ways to No Impact Man, a film about which I blogged in connection with our New York commemoration. As Colin Beavin and his family showed in that film, growing food close to urban populations can greatly reduce the human impact on  environmental systems, as the distance food has to travel can be greatly reduced.

Another story of a garden in peril is that of the historic research garden of the Valivov Institute of Plant Industry, however, where the ultimate fate of the garden is not yet known. As with the South Central Farmers garden, this very special garden is threatened by real estate development, in this case residential development associated with suburban sprawl in its suburban location south of St. Petersburg.

As with South Central, the Valivov garden has became a cause célèbre, drawing supporters from throughout the  world. The garden is considered a critical reserve of the internal biodiversity of several crop and botanical plants.  The site itself is of interest for historic reasons as well, because of the extremes to which scientists at the time went to protect rare food strains during the siege of Leningrad (as St. Petersburg was then known) during World War II. Then as now, scientists protecting this garden understood the importance of genetic diversity within food crops as a necessary component of food security. Modern agriculture has dramatically reduced genetic variability within crops; ironically, perhaps, modern crop science requires access to genetic stocks that offer a great deal of variety. The scientists in St. Petersburg also understand that subtle differences in soil chemistry and soil organisms are important, so that transplanting the cultivars to another location would not fully preserve the biodiversity that has been developed at the site.

In both the Los Angeles and St. Petersburg cases, the gardens were under threat because proximity to urban places resulted in land values  that are quite high, relative to the value ascribed to their use as gardens. The tendency of land values to increase with greater proximity to urban areas is known as a rent cone. The conversion of farmland to commercial, industrial, or residential use is — to a great degree — influenced by the expansion of rent cones, which set price expectations (otherwise known as land rent) that are difficult to meet with agricultural land uses. And as von Thünen would have predicted, even with government or charitable subsidies, only the highest-value, intensive agricultural activities are likely to persist close to cities. Extensive uses such as grain or grazing would simply be out of the question, as they yield very low land rents per unit of land.

Discussion questions for viewers of The Garden:

Aside from the provision of food, what benefits were provided by the South Central community garden?

How do the relationships between public and private spaces change over the course of this film?

Are you aware of any community gardens in your city or region? If so, how do they compare with the community garden in the film?

No Impact Man

For the first several years after  my family moved to Massachusetts in 1997,  New York became a place we passed through as we drove between our new home in Bridgewater and our relatives in Maryland. Sometimes these trips would include a stay near the scenic Hudson with our geographer friend Jeff, who is a planner for, well, Scenic Hudson. In more recent years, we have spent a lot more time exploring the center of the state, as we take our daughter to and from a camp in the Adirondacks. One of those outings, in fact, led me to post a Concept Cache about a coffee shop in rural central New York.

During all of this time, our visits to New York City have been relatively few, though we have enjoyed the visits when we have enjoyed The City (as it is often known) immensely when we have made the effort. The “effort” has to do with two main factors: expense and transportation. Both of these barriers can be lowered with a bit of ingenuity and experience, of course, but so far our visits have been very special treats. Recently, I watched the film No Impact Man as part of my wife Pamela’s Celebrating the States blogging project, and it led me to think critically about the role of New York City — and cities in general — in human-environment interactions.

In my course on the geography of environmental problems, I use Andrew Goudie’s Human Impact Reader anthology to help my students examine the spatial aspects of a variety of impacts humans have on the environment. In simple terms, the impact of humans on the environment can be summarized as I=PCT, which is to say that the human impact is a function of population, per-capita consumption, and the technology used for that consumption. As we read the anthology’s seminal scientific articles on a wide variety of human impacts — from coastal erosion and soil degradation to flash floods and climate change — I emphasize the spatial dimensions of each of these impacts.

No Impact Man — which should really be called No Impact Family — is the story of one year in the life of Colin Beavan, his wife, and their young daughter. As the title implies, the goal of the family’s year-long approach was to reduce their net impact on the environment to zero, by a combination of reducing negative impacts and increasing positive impacts, with an emphasis on pursuit of the former. Their effort leads to some important findings about the spatial dimensions one the other side of the equation. Specifically, how might high density mitigate or enhance the relative contributions of population, consumption, and technology?

In my earliest thinking about the environment, I viewed cities mainly as sources of environmental problems, given the high density of some sources of air and water pollution.  I have since learned that low density can also be problematic, as  suburban sprawl tends to increase the use of private vehicles, among other effects. From an environmental-impact perspective, the clearest advantage of urban density is the ability to reduce or eliminate automobile dependency and thereby eliminate a major source of climate-changing greenhouse gases. The Beavan family gave up airplanes and automobiles for the entire year, used trains only for long distances, and used walking and biking for almost all of their transportation needs. To do this while still enjoying access to many cultural, educational, and employment opportunities, it is almost essential to live in an urban place, where a great number of such opportunities can be found within a short travel distance.

In reducing their impact, the Beavins also focused a lot of their effort on food — growing some of their own and buying from nearby sources. The spatial dimensions of this are a bit more complicated. Food that is grown locally does not have to be transported very far, reducing the use of fossil fuels for transportation. Food that is grown organically does not require chemical inputs (and therefore eliminates chemical waste streams). Eating low on the food chain — that is, vegetarian or vegan — further reduces the use of both energy and chemicals. An advantage of pursuing these goals in an urban setting is that a critical mass of like-minded consumers can be found, creating enough demand for farmers from the region to supply urban farmers’ markets. Whether such efforts could ever be scaled up to supply the entire food needs of major metropolitan areas, however, remains to be seen.

Colin Beavan hopes to have an impact beyond the one-year experiment. His No Impact Man blog is an effort to build on the experience.

Mato Grosso: The Future of Food

Paul Ehrlich’s publication of The Population Bomb in 1968 explained why human population growth was accelerating, and touched off serious debate about whether enough food could be produced to feed ever-more billions of people. Even as many have faced malnutrition and even starvation, however, total food production has tended to keep pace.

For the foreseeable future, population will continue to grow, albeit it at a decreasing rate. Over the next half-century, the question seems not to be whether humans will produce enough food, but rather how that food will be produced. The human population is passing through what E.O. Wilson has called the bottleneck, and by the middle of the twenty-first century, it is likely to level off at somewhere between 8 and 9 billion people.

Overall food production can be achieved in just a few ways:

  • Distribute food more equitably by curtailing over-consumption and reducing the production of meat
  • Increase crop yields
  • Increase the land area under cultivation

Each of these broad strategies involves a lot of possible specific cases and a number of complicated trade-offs. The story of soybeans in Brazil — particularly in the huge, interior state of Mato Grosso — illustrates several of the complications associated with the second and third options.

Cargill terminal in Porto Velho

I took these photographs of Cargill’s riverfront terminal just downstream from Porto Velho, Rondônia in 2003. Much of the soy grown in the center-west portion of the country is brought by road to this break-in-bulk point, where it is transfered to barges that can take it all the way to Belem, at the mouth of the Amazon River, for export.

For many years, agricultural production in Brazil increased slowly, if at all, and sometimes not fast enough to keep up with domestic population growth. What little increase did occur was strictly the result of increases in the amount of land being cultivated. Even though considerable efforts were made to increase yields, improvements in technology did little more than offset the poor quality of the new lands being cultivated.

The twentieth-century experience of Brazil is hardly surprising; humans farm about 1/8 of the earth’s land surface and almost by definition this is the most productive 1/8. Any new areas brought into production are likely to be marginal lands in both senses of the word: in peripheral locations relative to existing human settlement and of lower quality relative to already-settled lands.

By the close of the twentieth century, however, something clearly had changed, as Brazil’s agricultural output — particularly of soybeans — began to challenge the role of the United States as the dominant producer in the Western hemisphere. Reporting for the radio program Living on Earth, Bruce Gellerman has described this transition beautifully in Magic Seeds and the Miracle Crop. (His report is available as an mp3 and as text with some excellent photographs.)

The report describes how Mato Grosso has become such a large and still-growing producer of soybeans, despite the unsuitable soil conditions. It then goes on to describe the consequences associated with such success: increased reliance on pesticides, the tendency of crop pests to develop pesticide resistance, and the great loss of habitat in the savanna, known in Brazil as cerrado, or “closed” for its traditional inaccessibility.

Brazil is advancing on its frontier just as the United States did more than a century ago. A decade ago, I wrote  comparison of the two frontier experiences: that of the United States in the 19th-century West and that of Brazil in the 20th-century Amazon. According to Gellerman’s report, the process continues in the 21st-century cerrado, but with more than one biome at stake and with the potential for much more substantial clearing. With the techniques currently being employed, the area remaining to be cultivated in Brazil might be greater than the area currently cultivated in the entire United States.