Farming, Pt 1 — Low harvests and profit blind spots

James Harper: This is Filter Stories. I'm James Harper, and I have a new series for you.

I want to be upfront: this is a very strange series to sit on my channel. It's a toolkit to help coffee farmers run better businesses — and judging by my download statistics, you are not a coffee farmer. But stay with me. This series is a must listen, because coffee farming is really, really important. Our industry is worth over two hundred billion dollars, and it rests on the shoulders of the farmers who actually grow the coffee. What our coffee tastes like, the price of our coffee — it all ultimately depends on the decisions farmers make. And yet, paradoxically, it is one of the coffee industry's biggest blind spots.

So the great news for you is that by the end of this series, you are going to understand coffee farming better than most coffee professionals you will meet at a trade show. And this knowledge is going to shape the rest of your coffee journey.

First, I need to give you the backstory — what this series is, and why I'm going to be presenting it to you in a rather special way.

I made this series with a friend of mine, Lucia Solis. Lucia hosts her own great podcast called Making Coffee with Lucia Solis, a very technical deep dive on fermentation and processing. Lucia herself is a coffee consultant who lives on a coffee farm in Guatemala, and she spends a lot of her life visiting coffee farms. She knows this world inside out.

Two years ago, we came together to address a huge gap in the coffee world: there is not enough high quality information to help coffee farmers run better businesses. If you are a roaster, fantastic information about roasting is at your fingertips. There's like a dozen roasting podcasts. There are loads of courses, consultants, conferences — there is an entire industry dedicated to helping you run a better roastery. But if you're a coffee farmer, you have almost none of that. And arguably, coffee farming is where it's needed the most. Coffee farming is, without a doubt, one of the hardest places in the coffee industry to make a living.

And so Lucia and I made a series to try and close this gap a little bit. We spent two years interviewing dozens of the best coffee farmers in the world, agronomists and specialists, and we've created this series, The Coffee Producer Toolkit. It speaks directly to coffee producers and it helps them run more profitable farms. We are releasing it first in English, but it's soon going to be translated into Spanish, and then subtitled on YouTube in major languages spoken by coffee producers. We are launching it at coffee events in producing countries, and we are super, super proud of it.

But let's get back to you — because, look, you are probably not a coffee farmer. Like I mentioned, there is so much here that's going to help you on your coffee journey. For you to really take it on board, though, I can't just play you the episode as it is. Let me explain why. This first episode in the series covers farming metrics, water, genetics, replanting, plant nutrition, cherry pulp fertilizer, and labour and tools. And we often go into detail — like talking about the specific tools you need to fertilize your coffee trees faster. I'm pretty sure this information by itself, you're not going to find interesting. Which is why what I've done is: before every section, I press pause on the episode and I come in, step in, like Tam right now. And I give you the wide shot — the fact that Latin America has been experiencing huge urbanization, that people are just not living in the countryside as much. And then I explore, well, how are we fixing that problem in the global north, you know, in North America or in Europe? And why can't those solutions work for Latin America? And once you have that context, I then press play on the episode, and then you hear the granular recommendations.

By the end of this series, you will feel like you have stood in the shoes of a coffee producer. You're going to get answers to all these questions you've been caring about for years. Why don't producers just roast their own coffee? Why is it not easy for me to message this farmer on Instagram? Why isn't every farm experimenting, planting exotic varieties and doing crazy fermentations? What's stopping them? At the end of this series, you will know the answer. And who knows — you might even want to try farming for yourself.

Okay, so now let's hear the intro to the actual episode. And then I'm going to jump back in before we get into the next section, on coffee metrics.

And I really hope you appreciate how I've Latinized the Filter Stories theme music.

The episode begins

James Harper: Welcome to the Coffee Producer Toolkit.

Lucia Solis: A podcast series built with coffee producers in mind, to help you run a more financially sustainable, better managed coffee business.

James Harper: I'm James Harper. I'm a coffee journalist, creator of Filter Stories, a documentary podcast about the history, science and culture of coffee.

Lucia Solis: And I'm Lucia Solis, a former winemaker, now coffee fermentation and processing specialist. I live on a coffee farm in Guatemala and I work directly with coffee producers to improve their practices and their livelihoods. My podcast, Making Coffee with Lucia Solis, uses a scientific basis and my 22 years of production experience to share insights into coffee production.

We're covering the topics that matter most to your bottom line: agronomy, post-harvest processing, storage, fermentation — my favourite — coffee quality assessment, sales and marketing, and more. Each episode features best practices from leading coffee farmers and experts, and presents it in a way that's practical and easy to act on.

James Harper: And this series is made possible by our partner sponsors: The Coffee Quest, Pinhalense, Descamex, GrainPro, Novonesis, BWT and Inter-American. We're launching it first in English. A Spanish version is on the way, and then all the episodes will be on YouTube in Portuguese, Bahasa, French and major languages spoken by coffee producers.

Lucia Solis: Whether you're a producer, you work with producers, or you're just curious about what it actually takes to make coffee farming a viable business —

James Harper: — we think this is going to be useful. And if you're not a farmer, honestly, we think it might just change how you see this industry entirely.

Lucia Solis: And in this first episode, we're starting with the basics: coffee agronomy.

James Harper: We're first going to cover the importance of measuring your yield and profitability, then the importance of water, followed by plant genetics. We're covering how to manage your replanting plans, then plant nutrition — including how to properly manage your coffee cherry pulp. And finally we'll be finishing on how to mechanize many tasks on your farm. All these tips and tricks will help you have a more profitable coffee farm.

And yes, there are some important things that we will not cover in this episode — but we have links in the show notes to great resources where you can dive deeper there.

Lucia Solis: Right, we can't solve the farm issues in one podcast episode, but what we hope to do —

James Harper: We tried. We really did.

Lucia Solis: — what we hope to do is to be able to spark, you know, light up some ideas if there are parts of your farm that you have maybe taken for granted, parts of the system that you have maybe not looked at, and to get curious and improve your profitability.

Filter Stories interlude: why we start with metrics

James Harper: Alright, pressing pause. Opening intro out of the way.

The next section is going to be on coffee metrics, and Lucia and I felt that this was the first thing we had to do. Of course, the first thing that's important for a coffee producer who's listening to this is to know where they are relative to other farms. How good am I doing? How much room is there for me to improve? Should I even bother listening to the rest of this episode? Lucia and I decided the first thing we should do is help the coffee farmer benchmark themselves. And I'm going to get to that benchmark in a moment, but first I need to tell you what's been happening these last 50 years.

Let's take just an average farm from Colombia and Brazil. Fifty-odd years ago, the differences in yield — you know, how much coffee these farms produce per hectare — wasn't so dramatic. Brazil at the time was already the world's largest coffee producer. They just have really great land for coffee growing: these high elevation rolling hills in places like Minas Gerais. The high elevation meant the coffee flavours were good, and that rolling terrain gave them an edge — for example, railways that could very efficiently transport coffee to the coast.

Contrast that with Colombia, where coffee is produced on these jagged, beautiful, dramatic mountain ranges. On one farm I visited, it felt like it was a fifty degree incline: one misstep and you were falling all the way down hundreds of metres into a valley.

But like I mentioned, fifty-odd years ago yields weren't so dramatically different between an average Colombian farm and a Brazilian farm. Then in the last 30 years, things really started to shift, and this was really driven by Brazil, which saw a dramatic increase in yield per square metre. Brazilian coffee farms today produce so much more coffee cherries than Colombian farms. Colombia did increase too, but Brazil increased so much more. A lot of that is down to industrialized agriculture: very technical, very input-driven agronomy, heavy use of pesticides and fertilizers. And because of that rolling terrain, they can also run mechanical harvesters, which are these big machines that harvest coffee cherries extremely quickly. Mechanical harvesters also allow you to grow very tall trees — and the taller the tree, the more cherries there are. That is a massive increase in your yields.

Colombia, by contrast, doesn't have the terrain for mechanical harvesters. Colombia has done a lot of work to try to boost yields in that time too, but the differences in terrain just completely change the game. The average Colombian farm's yield today is way lower than Brazil's. And not just Colombia — all of Latin America. By the way, going forward, when I talk about Latin America, what I mean is coffee growing Latin America minus Brazil.

There is just this huge discrepancy between what the average Brazilian coffee farmer is doing and a typical Latin American farmer. And so what Lucia and I wanted to do to start off this series is open the eyes of our audience, make them see this ginormous difference.

We made this series with a producer in mind that maybe had 10 hectares of coffee somewhere in Latin America. You know, it's probably an intergenerational farm. The farm was bought by the grandparents, and the listener, they're in their mid-30s, asked to come in and run the family coffee farm, seeing it all with fresh new eyes. We wanted to make it clear to them: look, your competition is not your neighbours, or producers in other parts of your country. Your competition is Brazil.

And this is genuinely very surprising information. I remember I was at a farmer training camp in Colombia, and as we were all sat around on plastic chairs, I got out my phone and I showed some producers there how Brazil does mechanized harvesting. And they were in shock, just seeing the cascades of coffee cherries coming off the backs of trucks.

So in this next section, once we've made the case that Brazil is actually your competition, we then focus on two really important metrics: yield and profitability.

To cover yield, we bring in Lalo Pérez, an agronomist who Lucia and I both tremendously respect, and he throws out a benchmark number for yield: one ton per hectare. To be clear, this is a very high benchmark for Latin America. Most farms come nowhere near this. And because of that, you might be tempted to dismiss it. But let me be clear why we think this is going to resonate for our farming audience.

Later in the episode, you're going to hear from a producer in Mexico called Julia Ortega. Look, her coffee wins coffee competitions, her prices are exceptional for her area, but her yield is well below that one ton per hectare benchmark — and she cannot live from the income from that farm alone. If her yield was higher, and she was getting a ton per hectare, she probably could. But she doesn't, despite doing so many other things right. One ton per hectare really does matter. And that is why we think it's going to resonate with our audience.

Now, the other metric we talk about is profitability, which you would think is very obvious, right? If you run a business, you need to be focused on your profitability. But most coffee farms in Latin America are small family farms, families who might have lived on them for generations. It's less of a business than a way of life. On the farm, you never really go hungry — the land feeds you, and it roots you in a rural community. And that matters so much. But farmers don't treat the farm as a business. The smaller the farm, the less likely it's going to be run like a business. And that is why so many farmers do not know how profitable they actually are.

But Lucia and I think profitability is really important to figure out, because in this series we are going to be advocating for all sorts of changes that are going to require investment — and to know how much you can invest, you need to know how much cash you have coming in.

Okay, so with all that out of the way, let's hear the next section. Pressing play.

Metrics: benchmarking your farm

James Harper: To start this episode, we want to share a story from a Guatemalan coffee producer we spoke to. His story reflects the circumstances many coffee producers probably find themselves in today.

Fernando Castillo: Mi nombre es Fernando Castillo, soy caficultor. Mi familia tenemos una finca en Fraijanes, Guatemala.

James Harper: Fernando's family have been on their 11 hectares in Guatemala since the 1960s, when his grandmother first planted the coffee.

Fernando Castillo: La finca, digamos, es muy cercana a [unclear], queda muy cerquita a la ciudad también.

James Harper: But for Fernando, it was never something he imagined.

Fernando Castillo: Eh, pero no, no, yo no queria trabajar en café.

James Harper: He actually built a career for himself in engineering in the US. And that was his plan, until his parents called him back to Guatemala to help manage the family's businesses. The coffee farm was part of that deal. And so he threw himself into it.

But what struck him early on was the logic the coffee farm ran on. As long as it wasn't losing money, that was considered a success. Fernando pushed back on that.

Fernando Castillo: Entonces yo le decia: papa, yo, yo, la verdad que no me veo haciendo todo ese trabajo para ojalá salir tablas, ¿verdad?

James Harper: They weren't paying themselves for their time. They weren't accounting for the value of the land. The philosophy was just: don't lose too much money. Because the family had this hope that at some point there would be that one good year somewhere on the horizon — a bumper harvest happening at the same time that coffee prices were very high.

Fernando Castillo: Y como que siempre estan convencidos de que ya va a venir el año bueno.

James Harper: But the years kept passing by, and that golden year never materialized. Because the losses were never catastrophic on the farm, it was easy just to keep waiting.

Fernando Castillo: Es relativamente facil aguantar, porque pues gracias a Dios tampoco es que la finca representara fuertes pérdidas, ¿verdad?

James Harper: It was like sitting in the desert sand, just waiting for the rains to come one day. The farm wasn't dying, but it wasn't really living either.

Lucia Solis: And this is a super common story for the majority of small and medium-sized producers in coffee. And James, here's the uncomfortable part: waiting for good years is no longer a strategy. And that's because of Brazil.

Fernando Castillo: Uno se queda "mind blown" de la diferencia tan grande, tan grande que hay.

James Harper: Fernando sees that Guatemala has a massive productivity problem. When you compare what a typical Guatemalan farm produces to a Brazilian farm, the gap is enormous.

Fernando Castillo: Es una diferencia demasiado grande, ¿verdad?

James Harper: In Guatemala, the average farm sits somewhere around half a ton of green coffee produced per hectare. But in Brazil, the average is easily four times that, and a good Brazilian produceris hitting six, seven, eight times what a Guatemalan farm is yielding.

Fernando Castillo: Y en Brasil creo que el promedio es fácil cuatro veces eso, y un buen productor tal vez hace seis, siete, ocho veces eso.

James Harper: And that difference is down to agricultural practices: genetics, planting, management, nutrition. That gap in productivity is why it is so difficult to make a coffee farm financially sustainable in the long term in Guatemala — because Brazil produces so much, it keeps the coffee price lower.

Fernando Castillo: Yo creo que por ahí va más la diferencia.

Lucia Solis: You know, James, throughout this series, interviewing all of these different producers, one of the things that we've realized is that a lot of coffee producers think that their neighbour is their competition. But really, most producers are not in competition with their direct neighbour. They're in competition with Brazil — with the efficiency of a country like Brazil.

Soto better compete with Brazil, your farm probably needs better agronomic practices. And that's why we brought on a couple of agronomists to give us best practices on boosting your yields and profitability. The first is Lalo Pérez.

Lalo Pérez: I'm Lalo Pérez, I live in Mexico. Y más estoy enfocado en, yo le llamo agricultura biológica, o agricultura razonable.

Lucia Solis: Lalo runs a consultancy in Mexico called [unclear].

Before you change anything on your farm, you must measure exactly where you are. You have to benchmark your farm. When you benchmark your farm, you know how much room there is for improvement. One of the first important benchmarks is figuring out your yield per hectare.

Lalo Pérez: Y de hecho, a mime gusta mucho hablar sobre estandarizar las métricas que usamos para hablar de productividad.

James Harper: For a producer not using mechanized harvesting like they do in Brazil, as Lalo explains, the benchmark he sets is one ton of green coffee per hectare. One ton of green coffee per hectare is the minimum viable yield — roughly 17 sacks of parchment coffee. Below that, he says, you're going to struggle to make the economics work.

Lalo Pérez: Para mieso es productividad viable minima.

Lucia Solis: I want us to sit with that number for a second. One ton per hectare. Most farms are nowhere near that. And Lalo is saying that that's your floor, not your ceiling. If you're below it, the question isn't "how do improve?" It might be whether coffee is even the right crop for your land.

James Harper: And Lalo finds himself asking that question about coffee farms where he lives in Mexico.

Lalo Pérez: En mi pais, en México, la productividad promedio son 300 kilos por hectarea — un tercio de lo que seria la productividad minima.

James Harper: The average in Mexico is 300 kilograms per hectare — a third of that minimum. But of course it goes beyond Mexico. We heard from Fernando in Guatemala that the average there is half a ton. That's half the minimum.

And just to be clear, Lalo's one ton per hectare goes for organic cultivation too. Organic farms tend to have a lower yield, but he's seen organic certified farms in Brazil that produce two and a half tons per hectare.

Lalo Pérez: Certificados organicos en Brasil que llegan a producir hasta 2.5 toneladas de café verde por hectárea.

Lucia Solis: So that's your first benchmark: yield, one ton of green coffee per hectare. But there is a second benchmark that's equally, if not more important, and that is profitability. To explore that more, we spoke with a second agronomist, my friend Sam Knowlton.

Sam Knowlton: My name is Sam Knowlton and I'm with Soil Symbiotics. I'm an agronomy consultant and regenerative agriculture specialist. I've been doing this going on 17 years, and I've had the chance to work all over the world and over 300 farms.

Lucia Solis: And Sam's argument was that focusing on yield is important, but profitability is even more important.

Sam Knowlton: Yield, I think, is a bit of a false metric sometimes. I think a better way to look at things is profitability. Because you could have a very high yield with tremendous labour costs and not be profitable. And, you know, what's better — to have high yields of very poor quality coffee, or lower yields of very high quality coffee that's going to be compensated much higher?

Lucia Solis: Yeah, and Lalo also agrees with this. He says that you absolutely need to measure your profitability.

Lalo Pérez: ¿Estoy siendo rentable por hectárea? Y luego, ¿mi rentabilidad es estable a través del tiempo? Acumulando los últimos cinco o diez años como productor, ¿yo he sido rentable año con año?

Lucia Solis: So before you change anything on your farm, you need to know how you're performing against these two benchmarks. What is your yield per hectare, and what is your profitability?

This series is meant for people that want a fundamental understanding of how toruna profitable business. And saying that we should know whether we are profitable — it sounds maybe even too obvious. That sounds so simple. Of course you should know if you're profitable. It almost feels like it shouldn't be worth saying.

But I can tell you from my experience with a lot of coffee producers and coffee farmers — even ones that have been farming for decades, for generations — a lot of this information tends to be kept in your head, just passed down orally. There are very few things that are written down and calculated, because of the nature of the inheritance, of it being a duty and not necessarily a business. It's more like vibes. A lot of them know roughly what they spent. They know what they got paid. There's a general feeling of like, oh, we had a good year, or we had a bad year. But that's not the same thing as having a spreadsheet and knowing your profitability per hectare.

I think another issue with being able to know your profitability is that a lot of producers don't take into account their time, because a lot of the labour is family labour, and it's hard to know how to quantify that. So you're not actually paying yourself a wage. As we heard from Fernando Castillo, that was a line item that they were really not taking into account in their overall costs.

James Harper: And that's precisely why, when Lalo starts working with a new farm, the first thing he does before recommending any agronomic changes is to look at the books. And what he sometimes finds is that the bookkeeping isn't good enough to even answer the most basic questions. What is the farm's yield per hectare? Is it making money?

And that's why Lalo says the best investment you can make on your farm is getting your bookkeeping in order.

Lalo Pérez: El mejor trabajo que puede hacer un agricultor es administrativo. Y es importante tener muy buenos registros.

James Harper: Okay, so let's just take as a given that you, as a coffee producer, have great records. You know your profitability and your yield per hectare, and you see that there is a gap. Maybe you're not profitable every year; maybe your yields are well below that one ton per hectare benchmark. If that's the case, now let's get into the agronomics, to see what you can change on your farm to become more profitable.

And according to Lalo, the first thing you have to fix is water.

Lalo Pérez: Bueno, el número uno que no se habla suficientemente en el café es el agua.

James Harper: That's coming up next.

James Harper: Alright, I'm pressing pause on the episode. These original episodes are really long — like, over an hour. And if I keep my explainers in between, it's going to be, geez, well over two hours of content. So to keep it manageable, I'm just breaking it up into different chunks, into smaller episodes. So coming up next in my feed, in the next episode, we're going to cover water, genetics and replanting. I'll see you there.