Issue link: http://read.dmtmag.com/i/737343
STiR coffee and tea 11 NEWS Turnaround Turmoil at Farmer Bros. New Texas headquarters Brazil's Robusta Drought The worst drought in 80 years in Brazil has led to daily rationing in smaller cities. The two main reservoirs serving Sao Paulo, South America's largest city, could dry out by February. As a result, robusta prices have reached record levels as farmers begin tearing up dead trees. Exports are down 90% during the past 12 months. Reuters reported that production has fallen to 5.95 million bags and that warehouses are letting workers go. "Damage from the drought appears to be worsen- ing," according to the report, raising doubts about the 2017 crop. Robusta is favored in the domestic market where shortages are impacting roasters. SAN Publishes Standards The Sustainable Agriculture Network (SAN) has published new standards that will be binding for audits after July 1, 2017. This allows certification bodies and farmers in the 42 countries where the SAN/Rainforest Alliance certification system operates time for training and transition to the changes of the standard. The revised standard recognizes that the path to true sustainability is a multifaceted process that requires time; it is not a destination reached in one leap. It is designed to enable more producers to embark and then continu- ally progress on their journey toward sustainable farming. Learn more: www.san.ag A challenging move from its Torrance, Calif., ancestral home to Ft. Worth, Texas has been good for business at Farmer Bros. coffee but not good enough to appease family members who call the move "misguided." The company reported that its net income improved from a loss of $26.6 million in fiscal 2012 to net income of $89.9 million in fiscal 2016. Since March 2012, when the board appointed Michael Keown as president and c.e.o. and the management team initiated its turnaround strategy, the company's stock price has appreciated more than 225%, increasing share value by more than $400 million. The corporate relocation plan is expected to produce cost savings of approximately $18-20 million annually and, as of year-end fiscal 2016, the company had already achieved more than half of the expected savings. In August Carol Farmer Waite, whose grandfather founded Farmer Brothers, sent a letter to the board announcing the creation of a group called "Save Farmer Bros." with the intention of seeking three board seats and replacing Keown. The performance was good enough to win the praises of Richard Farmer, a member of the founding family supporting Keown. The company recently broke ground on a 537,000 sq. ft. roasting and distribution facility that will employ 300 workers next year.