The Economics of Growing Coffee in Hawaii

US coffee companies that adhere to fair tradeWhen people look at the price of Hawaiian coffee they sometimes assume that those of us who grow coffee and sell coffee must be making a fortune. Or they wonder why the price of Hawaiian coffee is so high. So we thought we’d take the opportunity to explain some of the economics of growing, processing, roasting and selling coffee.

When looking at the math of growing coffee here in Hawaii, keep in mind that we only grow Arabica beans. Arabica is the type of bean that is used in virtually all specialty coffee. There are a lot of different varietals of Arabica trees, and both their yields and their levels of natural disease resistance vary by varietal, but the basic economics are same regardless of variety. One thing that all types of Arabica beans have in common, besides their quality, is that they have a lower yield per tree than Robusta, which is the type of coffee used in most non-specialty coffees that are commercially available (e.g., Maxwell House, Folgers, etc.).

When we take visitors on a tour of the farm we often take the opportunity to explain how coffee gets from the tree to the cup, and we share some of the surprising facts about coffee production. For example, did you know that one fully mature Arabica coffee tree will only produce 1.5 – 2 lbs. of roasted coffee in one year?

Coffee cherry & beansCoffee beans are simply the seeds of the coffee tree, and until we pick them they live inside a fruit called a coffee cherry. Each cherry normally contains 2 seeds that will become 2 coffee beans. (In roughly 5% of the cherries we find that the two seeds have merged into one football-shaped seed called a Peaberry.)

Coffee Cherry on TreeFor the highest quality coffee and the very best flavor, coffee cherry should be picked when it’s at the peak of ripeness, which we can identify by the bright red color of the fruit (or the bright yellow color for a varietal of Arabica coffee called Yellow Caturra). Because each branch of the tree has coffee cherries at varying stages of ripeness, all coffee cherry must be hand-picked, preferably by experienced coffee pickers who can quickly identify which cherries are ready to be harvested and which should stay on the tree to ripen further.

Pulper with Scott 02After picking, the fruit and seeds are separated using a machine called a coffee pulper (or de-pulper). The cherry that has been removed is composted. The seeds are then dried until they are at 10 – 11% moisture. At that stage, the seeds are called “parchment” because they are covered by a paper-like covering which must be removed using dry-milling equipment to reveal the green coffee bean.

Optical Sorter Feb 2017 croppedFor the next step we take our parchment to a dry mill. This is the only step in the process that we do not do right here at the farm. In the milling stage, the parchment covering is removed, and, in Hawaii, the beans are also normally “graded”, which involves sorting them by size and identifying (and removing) defective beans, which would include beans that are off-color, broken, or have bug bites from the coffee berry borer, which is a parasite that can cause anywhere from 3 – 30% of the coffee harvest to be lost.

home roasting coffeeAfter milling, the green coffee beans are brought back to our farm where they are stored in a climate controlled warehouse until we’re ready to roast. We roast our beans in small (10 lb.) batches. That roasted coffee then needs to be placed in labeled bags and sealed so that it is ready for sale. (In the case of our ground coffee, we of course need to grind it before bagging.)

Here are some of the numbers that result from going through that entire process from tree to bag:

  • It takes roughly 7 lbs. of ripe coffee cherry to make 1 lb. of roasted coffee
  • In Hawaii, we pay coffee pickers between $.80 and $.90 per pound of ripe cherry picked, which means that between $5.60 and $6.30 of the cost of every pound of our roasted coffee is money we paid directly to the pickers.
  • In addition to paying pickers to pick coffee cherry, we need to pay to:
    • Pulp the coffee, which takes both labor and specialized machinery
    • Dry the coffee from its wet state after pulping to around 10.5% moisture which also takes labor, energy, and specialized equipment
    • Mill and grade the coffee which is done at a dry-mill that charges us by the pound
    • Roast the coffee (again, labor, energy & specialized equipment)
    • Labeling, filling and sealing the bags of coffee so they arrive fresh and ready to satisfy your craving for a fabulous cup of coffee.

Of course, at the end of the day, all you really need to know is whether or not you feel like our coffee is worth the price. We promise you that we’re keeping the price as low as possible while keeping the quality as high as possible. And you can feel good about the fact that drinking our coffee provides employment to people who need it – that is, to all the folks who work here at Paradise Meadows, home of Hawaii’s Local Buzz, and who participate in the process of bringing our coffee from the tree to your cup. Mahalo!

One thought on “The Economics of Growing Coffee in Hawaii

  1. Micki (Bredeau) Warner

    Thank you! This was a most enjoyable read. I didn’t know anything about what goes into producing coffee. As I’m enjoying my most important morning cup watching the blue jays, chickadees and cardinal at their feeder, this was a refreshing and interesting article. Thank you!
    I’m so sorry to hear of the loss of your Gracie.

    Reply

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