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UF researcher: online technology could be a way to help sagging Mexican coffee trade

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Think of Anthony Rue as a coffee sommelier. His boutique café, Volta, near the University of Florida’s Gainesville campus commonly carries select brews from locations around the globe-with a notable and perhaps surprising exception.

“Mexico might be our closest coffee-producing neighbor, but it has earned something of a bad reputation,” Rue said. “We didn’t carry Mexican coffees until just last season because our suppliers haven’t wanted to deal in it. There has been a lack of transparency in what kind of quality you’re going to get.”

That questionable quality stems from an old-world style of trading among small farmers-one that commonly depends on a risky system of unreliable middlemen referred to as “coyotes.”

There might be a way to dodge these coyotes, however. It’s found in online auctions, a world that eBay enthusiasts in the U.S. have known for years says Charles Moss, a professor of food and resource economics in UF’s Institute of Food and Agricultural Sciences. Moss has studied Mexican coffee economics for nearly a decade.

A typical high-quality “Arabica” Mexican coffee is comparable to a light white wine: delicate and dry. Such coffee sold in specialty boutiques commonly comes from small farmers.

These farms, with less than 3.5 hectares of land, make up 78 percent of Mexico’s coffee producers. These producers, however, don’t have the ability to roast and process the beans themselves.

They commonly trade the beans, in berry form, to the middlemen coyotes, who then peddle the coffee to large-scale roasters. These roasters, in turn, process and distribute the final product.

In Mexico, this system creates a disconnect between the quality of the coffee and the price paid for it. Farmers are left with less incentive to grow high quality plants and roasters are often left with less-than-optimum beans.

While Mexico is still the fifth largest coffee-producing country, the price of Mexican coffee has plummeted over the last 15 years. While a 130-lb bag of beans might have sold for about $200 in the late ‘90s, it would now sell for less than half of that.

Working with Laura Donnet from the Universidad Austral in Rosario, Argentina and Dave Weatherspoon from Michigan State University, Moss is studying new ways that coffee producers everywhere can more accurately match the price of the coffee with quality.

In the current issue of the Journal of Agricultural Economics, they describe the relative success of online auctions, such as Cup of Excellence, which uses a panel of expert tasters to award rankings to different coffees.

In essence, it creates a systematic way to evaluate the coffee in a consistent way, Moss said. This means farmers get a fair price for the quality of their product, and roasters get more reliable beans.

While used throughout several countries, Cup of Excellence and online auctions are still only used to evaluate a relatively small percentage of the overall amount of the coffee produced.

“This is a system that could make a significant difference to the small farmers in Mexico who need to trade to a modern world, but are really stuck in centuries old ways of doing things,” Moss said. “Establishing a consistent market would open new markets in the U.S., the biggest coffee consumer in the world.”

Online coffee auctions are slowly gaining popularity, along with other methods of stabilizing quality. But to truly take root, Moss says, quality-grading systems must be accepted by farmers, roasters and, perhaps most importantly, retailers and coffee drinkers.

“I think there’s an audience of coffee drinkers waiting to embrace any system that improves quality,” Rue said. “And those of us that sell it will be more than happy to help.”

Source: Charles Moss, 352-392-1845, cbmoss@ufl.edu

Writer: Stu Hutson, 352-273-3569, stu@ufl.edu