Okay, that was a misleading title, because I am not going to pretend to tell you where we are going next, and neither should you listen to anyone who is telling you. If you can tell where the coffee market is going, well, close down your roaster, and just trade futures. Oh yea, there are people that do that, and they aren't roasters, they are traders, and they spend 18 hours a day, and there own money trading, and some make money, and some don't.

For Roasters, okay, we are up at seven year highs. Why, because world commodities are all at record highs, and someone said, "hey, coffee is still cheap." Around $1.20 is the longer run average price, so now we are 40% above that, but still cheap, if you look at wheat, copper, gold, oil, platinum, corn, soybeans, bean meal, silver, dirt, and everything else. Should commodity prices be at record highs, once again, if you don't think so, close your roaster, and start a hedge fund, and short them. Good luck!

Back to roasters, It's scary to buy here, but don't pick highs or lows, but hedge. Find the specialty coffees that you need, and if you sell at a fixed price to your customers, make sure that you have the coffee in place before you set those prices. If coffee stays here, well, it's here for everyone, and eventually roasters will have to raise their prices across the board. If you sell fixed price roasted coffee to your customers, and you hope that the market goes down before you buy the green coffee, so you can buy it cheaper, you just shorted the cofffee market. You can do that just by selling futures, and then you would not have to have a roaster, all those pesky employees, and the like.

Sorry for the sacasm. I was a trader for 8 years before I got into coffee. I traded propiertarily (mean the bank's own money to make money) in currencies, equities, commodities, convertable bonds, etc. and made money every month. It was a full full time job. I think it's a bit silly when some ower of a coffee kiosk read an article in a month old newspaper about a big supply of brazilian coffee, and now knows the market is going down. I have an opinion on where I think coffee may go ("may" being the key word) but we are flat, or completely hedged.

Sincerely,

Jason

[Sorry for the delay in the El Salvador travel reports. I got back, and the coffee market went nuts! Back on track, and 2 more El Sal updates to go!]

Okay, gushing over what one does for a job is not cool, for all those out there that can’t stand their jobs, but damn this is a cool job, at times, can’t help saying it.

Woke up early this morning to meet Aida from Finca Kilimanjaro. Our first let down, however, was that our friend, Andrew, got shafted by the man, actually, the man in this case was United Airlines, and got stuck stateside. Good news is that Andrew made a later flight, bad news, he missed today’s trip.

Well, George and I forged on with Aida, and went west to Santa Ana region of El Salvador to visit Finca Alpes, Finca Kilimanjaro, and Los Cruxes, the mill where her coffee, along with others, gets milled.

What did I learn today? Well, say agovio method of production, where the coffee plant is bent other, allowing one tree to have lots of branches. Is this good for the cup, or bad, or indifferent? I don’t know yet, but it was the secret of how El Salvador was the largest producer of coffee per hectare a few decades ago, and seems to be a uniquely El Salvadorian coffee “thing.”

What else did I learn, well, Pacamara have monstrously large beans, which I’ve seen many times in the green. SL 28, which is the Kenyan strain of coffee looks like an “M&M” cherry to quote Aida. That bourbon comes in red, yellow, and orange varietals. The orange was new to me. It looks sort of peachy like. I’d guess that’s it’s a spontaneous mutation of red and yellow, but I studied Chinese in college, so you can form our own opinion here.

We also saw some of the wind damage that recently damaged so many coffee trees. Also, visted Finca Santa Rita, and saw that the volcanic explosion took out its crop for the last two years.

Right now trying to figure out how to read my waypoints on the new GPS that I bought.
Well, that’s not working out too well, but also to note. Meet Jose Antonia Salaverria of Jasal, who owns Santa Rita and Los Cruxes.

Tomorrow up north to Chalatenango region, and visiting Mr. Ochoa and his farm.

Regards,

Jason

This trip has gone very fast, as they always seem to go. It’s our last day in El Salvador, and we are driving north up to Chalatenango to visit Mr. Raul Ochoa and La Montanas farm. The visit to La Montanas was the original reason that we had planned to come down to El Salvador. Mr. Ochoa’s farm had come in 16th place, then 5th place, then 3rd place, and finally 1st place, and that was a trend and a coffee that we simply could not ignore.

A strange thing happed on the way to the farm, and while this sounds like the beginning of a joke, it is not. About two weeks before our planned visit, straight line winds hit El Salvador (and parts of other areas in Central America, but El Sal took the brunt).

I think that he has 25 trees left out of his entire farm. Completely leafless. Completely beanless. It was like leaves and coffee cherries just disappeared into an alien ship.

(I have not posted these photos yet, but will later this week.)

When I had heard this, I was really kind of numb. There was not loss of life (that I am aware of) or this was not on the scale of Hurricane Stan, or the tsunami that hit Indonesia, but it was very close to home. I kept thinking of Mr. Ochoa, who had sold his coffee in parchment to the local buyers in past years, and then from great land, great climate, and great work had won first place in the Cup of Excellence. The very reason of our trip was to come down and meet Mr. Raul Ochoa and his son, Alexander (not Alejandro) and buy his coffee at a premium way above he’d received before. The fact that out of an estimated 160 69kg bags, he had maybe 7 60 kg bags left, was just amazing.

My initial thought was, “What can we do?” and that we should not go down there.

George said that this was even more reason to go, and that’s what we decided to do!

I contacted Ricardo Espitia of the El Salvadorian coffee council to ask what type of help could we provide. Ricardo had seen the farm and was in shock too. Well, altogether we came up with the idea of providing seed money to get the farm back on its feet, and to make sure that there was enough money to treat the coffee with the special care that it had received in the past to make it that special.

Ah, the coffee, I have not even talked about the coffee yet. The coffee is Pacamara varietal, and it was liquid peach juice, floral and fresh summer berries, with an acidity that is there the whole way, but not even a hint of being overpowering. It was not only the best El Salvadorian that I had cupped, but one of the best coffees that I have cupped.

Okay, back to our plan. Café Imports is “pre-paying” for coffee, be it next year, or three years from now. It’s a sign of good faith, and a cash injection for Mr. Ochoa and his son to have the money for the new inputs to get their farm going again. We wanted to be both the financial seed to get the coffee going, and hopefully the seed of inspiration in a rather tough time for the Ochoas

George auctioned off some of the previous year’s coffee at $100 a pound, and raised over $4,000 at the time that I wrote this, and I believe that there is more money coming.

Mr Ochoa was quiet when we were telling him about our plans, very stoic. Then when it was his turn to speak, he started tearing up as he thanked us. I felt very strange having an older man brought to tears, but you could tell he was honestly touched.

After our visit at his farm, Mr. Ochoa hosted us for lunch, which was honestly the best meal that I had in El Salvador. Vegetable soup of potatoes and green beans, with chicken broth. Arroz, chicken (hen) three ways, baked, fried, and in a cream sauce ginger, fresh fruit for dinner.

Back in the States, we have the seven bags of surviving coffee from Mr. Ochoa. We are going to offer this coffee to last year’s bidders, along with ourselves, and try to raise more money from this limited supply of coffee to help even more.

I have a photo showing new tiny buds sprouting from Mr. Ochoa’s trees, and that is the way that I feel about this whole visit. A bud of new growth starting to reach its way toward the sun.

He's always been our little shinning star, but now, the SCAA thinks he's a star too! Congratulations to Jamin Haddox of Cafe Imports for passing the SCAA Q cupper, Star cupper, and all around cupper superstardom test on his first try! Nice job!

A look out the window today, March 31.