ORGULLO LATINO
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How Higher Coffee Prices Impact Small Farmers in Latin America: Insights from Mayorga Coffee
The recent surge in global coffee prices through the Commodities 'C Market' has garnered significant attention, raising both optimism and concern. (Yes, concern). While consumers may believe this is a boon for producers, the reality is more complex. For small, remote farmers in Latin America, higher prices might offer temporary relief, but the systemic challenges they face demand long-term solutions.
MARKET DYNAMICS AND SMALLHOLDER REALITIES
While higher commodity prices might suggest increased income for all farmers, the reality is more nuanced. Small-scale producers often lack direct access to international markets, relying instead on intermediaries who have mastered the art of creating narratives to reduce producers’ income. Some examples that I’ve witnessed first-hand:
- Claiming that the coffee had a much higher percentage of defects when processed at the mill
- Offering pre-harvest financing on coffees giving the coffee a commodity value (rather than specialty) which they then loan at 75% LTV to charge 3-5% MONTHLY interest
- Claiming that the coffee cupped at a lower score once it’s been packed and sealed in a shipping container, forcing producers to negotiate down the price
- Charging “sales commissions” for representing the cooperative/producer to the market
- Establishing multi-year, prepaid contracts, locking producers out of market upside as they pledge their land for collateral
- The list goes on and on and on
CLIMATE CHANGE AND PRODUCTION CHALLENGES
Climate change continues to pose significant threats to coffee production in Latin America. Unpredictable weather patterns have changed the timing of harvests, migration has severely limited availability of support workers, interest rates are punitive, access to financing is highly limited, and there are some areas where coca leaf is a preferred crop due to its higher market prices. These challenges not only affect the quantity of coffee produced but also its market value, further complicating the financial stability of smallholder farmers.
COFFEE IS WAKING UP TO REGENERATIVE ORGANIC PRACTICES
While in my opinion it's mostly opportunistic and performative, the coffee industry is finally talking about regenerative practices (aka permaculture, diversification, circular etc). Fortunately, Mayorga’s producers have been engaged in regenerative organic practices for years, which helps to offset some of these concerns. Mayorga has understood for years that healthy soil and communities are the foundation of excellent coffee. We’ve supported our coffee farmers to diversify their crops and adopt sustainable agricultural practices. Some have chickens that provide income and inputs for fertilizer, some compost byproducts for compost, some plant chia, beans and other products that fix nitrogen and create additional income. Diversification can provide alternative income streams, reducing dependence on coffee alone and enhancing resilience against market volatility and environmental stresses. Regenerative practices, including agroforestry, proper water management, and organic farming, improve soil health and increase resilience to climate change, leading to better yields and quality over time.
THE ROLE OF DIRECT RELATIONSHIPS AND SUSTAINABLE PRICING
Establishing direct relationships has been crucial for Mayorga to ensure that our producers benefit from our relationships regardless of the market. Some years their margin is better than others but we always maintain direct communication to ensure that they are operating at sustainable levels.. We have never claimed to be the coffee brand that pays the highest price to producers. While micro-roasters often focus on smaller lots with higher prices, our approach is to build long-term, scalable partnerships that provide consistent premiums for specialty-grade organic coffee.
CONCLUSION
While rising coffee prices may offer temporary relief, they are far from a solution to the systemic challenges faced by small, remote farmers in Latin America. True progress requires more than higher payments—it demands a deep commitment to understanding their realities, building sustainable practices, and fostering equitable partnerships. Wealthy, well-connected producers will always thrive in any market, but if we want to create meaningful change, we must focus on supporting the most vulnerable farmers. Real transformation happens through direct engagement, shared responsibility, and long-term action that empowers producers to build sustainable futures. This has been Mayorga’s commitment for the last 27 years and will continue to be as long as we have conscientious consumers who appreciate the coexistence of quality, value, and responsible farming practices.
If you want to learn more about Mayorga's history and philosphies, follow me on LinkedIn
Martin Mayorga
Founder/CEO
