STiR coffee and tea magazine

STiR coffee and tea 21 Individual coffee farms in Brazil's top growing region of Cerrado Mineiro report damage of up to 60% from frost. Photo courtesy Fernando Barbosa. "At my farm about 30% of the total area planted with coffee was badly affected which was a lot less than many growers in the region here with damage on between 60-70% of their farms I know, but because of the way the frost burned the trees and land in a very uneven way I will have to renovate at least 50% of the total area," produc- er Dalcio Oliveira Guidett, a grower in the Serra Negra region of Sao Paulo state, told STiR coffee and tea. Such comments represent the vast majority of farmers as they work through the initial damage evaluation. While smaller parts of frost affected areas can be renovated with less invasive prun- ing methods, the majority need either stumping, where the stem is cut just 8-10 centimeters from the root, or replanting, both of which cases will require 3-4 years before production will be back. And in case of replanting, this won't be possible to start until the end of 2022 because of a lack of planting material. "This is the worst frost to hit Brazil's coffee in- dustry since 1978," said Fernando Barbosa, him- self a grower in the key Southern Minas coffee re- gion and a long-time industry advocate who works with multiple grower groups across Brazil. "The producers are devastated; many growers are in shock to see all their work been reduced to noth- ing overnight." While the overall scope of frost damage in percentage of the crop may still turn out to be less than the 1994-1995 frosts, the over- all impact for the 2021-2022 crop years is more significant as global demand today is over double what it was then, market analysts said. Arabica futures at 7-year high as unprecedented large area hit This comes at a particularly sensitive time for the world coffee market as supply runs low against an already smaller than expected harvest in Brazil and consumer demand booms against low inventories and stocks, according to figures and data from the International Coffee Organization (ICO) and the US Department of Agriculture (USDA). The unexpected severity of the frost in Brazil sent arabica futures at the ICE exchange in New York soaring to 7-year highs over $2.20 per pound in late July before profit-taking took over. But prices remain trading in the $1.80-1.90 range and is expected to roar back to over $2.00/lb. in the short to medium term, and possibly even reaching $3.00/lb. for the first time since 2010, commodity analyst Judith Ganes told STiR. The damage from the four cold fronts that brought the coldest weather to Brazil in over 30 years between the end of June and early August is so severe the result ultimately will go down in the history books to be known as the "black frost of 2021". Unlike the "black frost" events that hit in 1975 and 1978, and were primarily isolated to the state of Parana, the 2021 black frost hit an unprec- edented large part of Brazilian coffee producing areas across Parana, Sao Paulo, Alta Mogiana, and the top Minas Gerais producing regions of South- ern Minas and Cerrado Mineiro. A "black frost" is a term coined by Brazilian agronomists that describes a particularly damag- ing frost where extended cold weather below -2 or -3 °C combined with the effects of winds and humidity causes not only leaves and branches to be burned but also taps into the heart of the stem and sap of the coffee trees, leaving it either entirely killed or dead so close to the root that it has insuf- ficient nutrients left to bounce back from pruning or stumping. At least 3-4 years of uncertainty in fresh coffee supply The damage from the frost cannot be underesti- mated. For multiple reasons, the numbers of losses as well as overall impact on the Brazilian produc- tion cycle will have much more long-term effect than what the initial figures reveal, said agrono- mists and market analysts. There is agreement by sources that the market should prepare itself for at least 3-4 years of critical supply problems as it will be until the 2024 and 2025 crops before Brazil's coffee regions will be able to register any signifi- cant recovery from the extent of the frost damage. "In the best-case scenario we are three years away from seeing a full recovery to Brazil's pro- duction cycle," said Jonas Ferraresso, an agrono- mist who himself has a small coffee farm of three hectares in the state of São Paulo. "But more likely it will not be possible to see all the areas affected re-planted until the harvest in 2025 as it is already too late for most farms to contemplate replanting in the next year." "In the best- case scenario we are three years away from seeing a full recovery to Brazil's production cycle"

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