San Francisco Chronicle - (Sunday)
Coffee crisis brews as a beetle wreaks havoc
A tiny bug is destroying arabica crops worldwide, which could spell a price hike for your cup of Joe
Sometimes, a cup of coffee starts with chopping down a tree. Or a few hundred of them. Tommy Greenwell, a third-generation coffee farmer on the island of Hawaii, grows some of the best-rated beans in the world, displaying a range of flavors from citrus to vanilla to caramel and more. Strolling the orderly rows of bushy and branching 8-foot-tall trees, Greenwell shows off his prized plants, festooned with coffee cherries in candy-colored hues from lemon-yellow to McIntosh apple red to a deep ruby-ripeness.
“Every three years, I cut ’em down,” Greenwell said, holding a deeply tanned hand to his brow to shade his eyes from the sun’s glare during the punishing tropical September heat.
That’s because, in 2010, the coffee berry borer beetle arrived here on the Kona side of the island. The spiky, brown beetle is about as long as a grain of rice is wide and digs its way into coffee cherries, each of which houses two beans apiece, and consumes the fruit inside, sometimes turning the plump, red cherry into a shriveled brown husk that farmers call “zombies.”
So Greenwell hacks his prized trees to stumps every few years to stop the spread of the tiny beasts, as well as other ailments that plague the plants. On the other side of the expansive Greenwell Farms plantation, where the steep hills of the property look out over the gleaming cerulean Pacific Ocean, dozens, if not hundreds, of the plants resemble small, conical Christmas trees just starting their three-year journey back to maturity.
The beetles are relative newcomers to Hawaii, but have decimated crops in some of the largest coffee growing countries on Earth, like Vietnam and Brazil, since they showed up more than 150 years ago. In that time, the tiny beetles have contributed to rising prices — and blood pressure — for coffee farmers around the world, cutting into profits and forcing many out of the industry altogether.
Combined with another scourge of the industry, a fungus called coffee leaf rust — which all but wiped out the coffee industry in Sri Lanka decades ago — the price of a sustainable, quality cup of Joe is facing a reckoning.
“We are at this focal point where we need to shift how coffee is made,” said Grayson Caldwell, the senior sustainability manager at Bellwether Coffee, a Berkeley company that builds precision electronic coffee roasters and sources coffee from a network of producers at a living-wage price. “We can’t keep putting the burden of low prices on the backs of the people who produce it.”
While coffee prices have spiked in recent years on international commodities markets, from less than $1 per pound to more than double that earlier this year, it doesn’t necessarily mean a windfall in profits for farmers. As they deal with an array of pests and disease that cut into their profits, they also have to contend with spiraling inflation and rising fuel prices.
Of course, not all farms are feeling the squeeze equally, with larger operations more able to weather the inflationary body blows. Much of it has to do with the kind of coffee a grower is producing.
Greenwell grows arabica coffee on his Hawaiian farm, one of the two major species of the plant that comes in many varieties and is prized by the likes of Starbucks and Peet’s Coffee for its complex flavor. He sells his beans direct to consumers for $40 to $60 a pound.
The other, known as robusta, is what you might find in a typical Folgers can, known more for its hardiness against disease and climate along with its concentrated caffeine content and more acrid flavor, commonly masked with sugar and milk.
But while arabica varieties sell for higher prices on the global commodities market, they are also more susceptible to pests like the coffee berry borer and leaf rust, which thrives in warmer climates.
“For people that drink regular coffee, like instant coffee, that is not a problem at all,” said Andrés Montenegro, the sustainability director at the Specialty Coffee Association, a nonprofit group that represents specialty coffee growers, roasters and baristas the world over. “For people that appreciate the smallholder farmer, that like to drink coffees that connect them with regions in Latin America and Africa and Asia, there is a key threat there.”
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Some global estimates put the number of cups of coffee consumed each day in the billions. In the U.S., about two-thirds of people drink it every day, according to one estimate.
“People love coffee. People need coffee,” said Hanna Neuschwander, the director of communications and strategy for World Coffee Research, a nonprofit group that focuses on coffee research and development. “To a very large degree it fuels the capitalist economy.”
With coffee being one of the most traded and consumed things on the planet, the going rate is largely set on the commodities market, where the price of a pound of coffee can
change by the second based on supply, demand and the future prospects for the global harvest.
And like just about everything else during the past few years, the price of coffee has been surging.
For instance, a small Starbucks Pikes Place Roast coffee made of arabica beans can cost as much as $2.95 in San Francisco — compared with the roughly $2 it cost a year or so before the pandemic.
Inflation has increased consumer costs, but that price hike does not truly reflect the squeeze many small farmers are facing, Neuschwander said.
“Any farmer that’s having to deal with rust is having to spend money to deal with it or they are losing product,” Neuschwander said, “Whether that cost gets passed along to consumers is mostly, ‘No.’ ” That’s true for Greenwell. While he chops some trees down periodically, that doesn’t get rid of all the rust and beetles. At his Hawaii farm, he uses copper-based sprays to tamp down the rust. He also recently bought a machine for several hundred thousand dollars that uses a computer to inspect hundreds of beans each minute, flicking away the ones with tiny beetle boreholes in them.
For now his farm isn’t facing an existential threat from those challenges, but fighting them is expensive and resource-intensive.
In 2012, the first year the boring beetles hit the island, he lost about 30% of his crop, although he said some farmers saw up to 80% of their trees stop producing.
The cost of grappling with threats in the field, along with fluctuations in the global commodities market, have cut into farmers’ profits.
For smaller farmers producing arabica beans (most grow robusta too) the sale price is “completely detached from how much it costs producers to produce coffee,” Caldwell said, meaning a bumper crop in Brazil could crater prices, and profit margins, for farmers across the world.
A study run by Bellwether Coffee found producers in Colombia, one of the top sources of high-quality arabica coffee, were earning around 67% less on their crop than compared with 40 years ago, even when adjusted for inflation.
The study also looked at roughly two dozen farmers and found they would need to make 20% more to have made a sustainable living income in 2021.
While producers like Greenwell who command a high price for their product are managing for now, the result of the tiny beetles and spores combined with a changing climate and market dynamics means one thing for the global coffee map: consolidation.
“Ten years ago, seven countries produced about 70% of our coffee,” Neuschwander said. “Today it’s about five countries.”
That means the coffee available to us is shrinking, and specialty coffee beans could become more expensive.
“A potential future is we have access to cheaper commodity coffee from fewer places, which makes the supply chain more vulnerable,” Neuschwander said. That means that “if Brazil has a frost, that makes the prices go up. And specialty coffee becomes more and more expensive.”
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Perhaps a snapshot in the extreme of what that future might look like lies not in the mountains of Colombia but along the Santa Barbara coast. That’s where Jay Ruskey’s Good Land Organics farm has been growing coffee since 2002. The California coffee industry now boasts dozens of farms producing, which led Ruskey to found Frinj Coffee to help farmers with everything from plant material to roasting and bagging.
“It’s a practical luxury,” Ruskey said of the California coffee industry, which is mostly concentrated in Santa Barbara and San Diego, or just about anywhere you could grow avocados. “I don’t think what we’re doing is for everybody. Some people like nice wine but aren’t going to buy a Ferrari.”
A cup of his coffee sold in a cafe is priced accordingly, anywhere from $10 to $36 per cup. Frinj’s site offers roasted
beans for $70 to $284 per pound.
“I think people need to pay more for their coffee,” Ruskey said. “Coffee is probably one of the most complex foods that U.S. consumers have daily.”
Despite those eye-popping prices, there is a growing market for high-priced and highquality beans.
“Coffee shops are looking for more origins, unique flavors,” Ruskey said, which has driven a growing market for specialty coffees. In 2018, Oakland specialty roaster Blue Bottle Coffee, now owned by Nestlé, bought 266 pounds of Ruskey’s prized Caturra Geisha Blend, selling out in two weeks, he said.
Ruskey said he inked another deal with Blue Bottle this year to sell the company a total of 100 pounds in three small lots for $215, $220, and $320, respectively.
Being that it is relatively new, Ruskey’s farm has yet to see the arrival of blights like leaf rust and coffee berry borer, which can hitchhike into a field on animals and clothes.
He said fliers posted around his farm remind anyone who has recently come from coffee fields in Hawaii, where beetles and rust are prevalent, to not wear the same shoes or clothes they wore on the islands. Ruskey said he’s had to stop off at clothing stores more than once to re-outfit visitors who just landed from farms in Central America.
For now it’s easier to operate and try to turn a profit without those associated costs and concerns. But, one day, most likely, they will come.
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Chifumi Nagai has spent much of the past five decades in labs from Japan to Hawaii, splicing together different breeds of coffee, sugar and other botanical wonder plants to make them not only taste better for consumers, but also to stand up to the ever-evolving threats of nature.
Now retired, Nagai spent much of her career with the University of Hawaii and the Hawaii Agricultural Research Center to develop and crossbreed new types of coffee trees that would be both resistant to blight like leaf rust, and still retain the fruity, spiced and sometimes citrusy flavors of Kona-grown beans that prestige coffee-drinkers crave and that command a price like few other places on Earth.
In the late 1990s, Nagai figured it was only a matter of time before rust hit the Hawaiian islands. So she began to collaborate with the U.S. Department of Agriculture in Hilo, importing rust-resistant varieties of arabica coffee and crossing them with Hawaiian varieties.
But that process takes time and the “grandchildren” plants of those experiments are just now being spread out into fields. “Theoretically, 75% should be resistant” to rust, Nagai said. Although, depending on which grandparent those trees take after, they might express more rust resistance without retaining the prized light, even nutty flavor of Kona coffee that keeps consumers coming back despite the hefty price tag.
In the long term for the Hawaiian coffee market, it might become an existential struggle. If their beans aren’t buttressed against blight, they could die out over time. And, Nagai said, it doesn’t make sense to switch to growing lower-quality robusta, or arabica beans without just the right flavor for the finicky human palate.
“Why would (customers) keep paying that high price if they could just buy it someplace else?” she said.
The USDA has also added different types of coffee to its germplasm in Hilo, the repository of plant materials similar to the Svalbard Global Seed Vault in Norway, but for subtropical plants like coffee, pineapples, macadamia nuts and lychee, said Tracie Matsumoto Brower, a USDA research horticulturist.
“We’re like the Noah’s ark of agricultural crops,” she said, providing plant material to researchers and breeders to try and create more resistant agricultural strains.
Matsumoto Brower said her ark is also working with Neuschwander’s group, World Coffee Research, to establish a plant breeding network for different countries as well, in order to fend off pests and rust in their unique environments.
“Like … COVID pathogens, they are always evolving,” Matsumoto Brower said of pests like beetles and the sickly yellow rust spores. “It is a constant battle.”