STiR coffee and tea magazine

40 STiR coffee and tea / Issue 2, 2019 (April / May) T By Dan Bolton Transparent Trade ransparency answers the most pressing question in coffee: Where does the money go? The release in January of the first Specialty Coffee Transaction Guide offers defensible price points at which buyers and sellers can begin negotiating prices for specialty coffees. The online publication is an attempt to guide price discovery in compliance with antitrust laws. The data, drawn from 10,000 contracts, is based on actual prices paid for quality coffee at different quantity levels. It is a first, following several years of tracking FOB prices by a team of economists and academic researchers at Emory University in Atlanta, Ga. The work is an outgrowth of Transparent Trade Coffee which launched in 2015 to provide a forum where consumers, curious about their coffee choices, can review pricing details from direct trade roasters at the time of sale. At the heart of the venture is the concept of "return to origin" defined as the percentage of coffee retail sales that goes back to the coffee supply chain, according to Peter W. Roberts, professor of or- ganization & management at Emory. Roberts and Chad Trewick, founder of Reciprocafe, were joined by Ric Rhinehart, executive director emeritus of the Specialty Coffee Association (SCA) during a recent webinar addressing solutions to the coffee pricing crisis. Coffee pricing crisis Rhinehart, who heads a newly formed SCA initiative to address pricing concerns, said that existing markets (both arabica and robusta) do not "effectively address the real cost of labor today." Rhinehart estimates that 70% of the cost of production is labor with most small farmers earning less that a living wage. He and the staff at SCA's Sus- tainability Center, are encouraging roasters and importers to participate in the Emory University research to better understand the problem and provide alternative price discovery mechanisms. He said recommendations and interventions will be made public in September. These include ongoing updates of the coffee transactions guide. Roberts told webinar participants that pricing volatility and the intervention of financial professionals drowns out the real economy of coffee, one that consists of farmers and farm workers, millers and traders, roasters and retailers. The guidelines are based on submissions by 21 coffee firms covering 10,000 contracts during a two-year period ending September 2018. Transactions totaled $341 million. Peter W. Roberts, Ph.D, professor of organization & management at Emory University, Atlanta, Ga. The Specialty Coffee Transaction Guide reveals price paid and cupping scores for 10,000 anonymous contracts to help buyers and growers negotiate prices independent of commodity markets

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