Coffee Economics

How value, costs, risk and income move through the coffee chain.

Value chain

A coffee supply chain can include producers, cooperatives, processors, exporters, importers, traders, roasters, distributors and cafés. Each stage has costs, risks and value-adding activities.

Price is not income

The international coffee price is not the same as a farmer’s net income. Farm-level economics depend on yields, production costs, local deductions, financing, exchange rates, quality premiums and the structure of the sale.

Living income

Living-income analysis asks whether a household can earn enough from its economic activities to afford a decent standard of living. It is different from simply asking whether a coffee price is above a benchmark.

Risk

Weather, disease, currency movements, logistics, input prices and market volatility can all affect coffee businesses. Long-term relationships and risk-sharing arrangements are sometimes designed to reduce this uncertainty.