Coffee Traders' Forum - A Discussion about Coffee Futures Trading
Coffee Traders Discussion Forum
Coffee production has certainly been increasing across origins. Tapping further into the I&M brainpower, important to note that this increased production is mostly from small farmers in poor countries who are already multi-cropping.
On the other hand, Lionel (I&M) notes that large commercial farmers who run a business are operating on relatively expensive properties, incurring the cost of employees and the additional cost of yield enhancement. As a result, commercial farmers incur much higher costs than small farmers. To be successful over the long term, the higher costs force commercial farmers to consider profitable crop alternatives.
Improving living standards, the cost of education and the financial aspirations of small farmers are also on the upswing, but they are not supported by the income from coffee production. Like commercials, small farmers are also forced to consider alternative crops. As the sons, daughters and grandchildren leave the farms in search of more rewarding urban employment, these dynamics are already impacting small farmers in many countries with improved education
As you can see, coffee farming does not currently support a higher standard of living. As a result, something has to give. Increases in small farm coffee production simply cannot continue without a corresponding increase in income.
In this author's mind, the monthly coffee charts are a manifestation of these observations.