This post is adapted from a talk I gave at Roastronix Summit 2025 ahead of SCA Expo in Houston, Texas in April, 2025.

It was 2 o’clock on a Tuesday afternoon and I found myself standing in front of a Mexican hat store on the West Side of Cleveland. I’d read there was a Viamerica agent inside and hoped to send the equivalent of some $5,500 USD in Colombian Pesos to a coffee producer, Lino Rodriguez, who’d shipped coffee to me via Fedex to roast for Aviary. The day before, I’d tried to send payment the way I’d done it in the past—through the Ria app. It turns out, though, that sending a few thousand dollars as one-off transactions to a battery of recipients across Latin America will get your account flagged for potential fraud or money laundering—and so I was surprised to discover that my account had been closed.

Foreign currency exchange is one of the many landmines of “direct trade.” Coffee producers buy cherry or inputs or labor using their local currency, but at export, coffee is typically sold against foreign currency (e.g. USD). Through the harvest, the exchange rate between USD and local currency floats—meaning that a producer’s purchasing power resulting from the sale of a lot of coffee at the start of the harvest may change by the end.

From 1 January 2025 to Tuesday, 4 March 2025, the COP gained strength against the USD. If Lino received payment in USD in January, he would have had the advantage of a higher FX rate; but by March, that same amount of USD was worth less in COP.

Dual rate exchange systems complicate this further by offering a different price to buy or sell with a margin in the middle during conversion—a margin which may devalue currency on either end of the transaction. Some countries, like Ethiopia and Colombia, regulate how much or to whom or from whom or to where different currencies may be deposited, or how long and what percentage may be held. In the case of Colombia, Bancolombia prohibits deposits to accounts that accept foreign deposits in excess of the equivalent of $5,500 USD per 30 day cycle—unless you’re working through a wire service like Ria or Viamerica.

Further, the harvest is financed—with cash going out before it’s received in support of a producer’s life and harvest activities—even as global interest rates rose as economies globally recovered from the pandemic. In Colombia, real interest rates rose from 1.42% in 2022 to 13.82% in 2023, relaxing slightly to 9.5% by the end of 2024.

I’d been buying from Lino since 2017, but under different circumstances. Not just in terms of the market (95 cents, instead of above $3.00)—but back then, we worked through exporters and importers. Lino sold his coffee to an exporter from whom he’d receive cash immediately on delivery of his lot to the purchasing warehouse; the exporter, in turn, would finance the coffee until export and handle the additional risk associated with currency fluctuation and conversion until they received payment from the importer, cash against documents; the importer paid in USD, financing the coffee while it was on the water and until I released it from storage in New Jersey; and I had the privilege of paying up to 30 days after that release owing to my credit terms, far removed from the initial sale in Colombia and Lino’s farm.

It’s an uncomfortable truth of coffee buying that sudden high prices tend to result in lower quality. In order to capitalize on the high market, exporters, processors and producers work to produce more coffee, creating competition not only for cherry but labor to pick cherry, milling time, and shipping containers. Labor is limited, and on the C-market, an unripe cherry is worth as much as a perfectly ripe one. Yields matter more than selection. Space on drying patios, too, is limited; and so, coffee is shuffled before it’s stabilized to make room for the next and expedite sale and export.

But I wanted Lino’s highest quality coffee—so my strategy was to pay more, pay quickly and pay in full. And so: I found myself standing in front of a Mexican hat store on a Tuesday afternoon.

The way you define quality will depend on your vantage in the supply chain. While a producer might hold that cultivars and processes that result in higher saleable yields are their coffee of the highest quality, an exporter might value milling performance above all else. An importer might care about defect counts and water activity. None of these, of course, has much if anything to do with cup quality.

The notion of quality differentiation, though, is inherent to the sector, which  defines “specialty” coffees as those that are, by default, sweet, clean and uniform but meanwhile prizes those coffees that offer “distinctive” attributes.

Two weeks ago, the Specialty Coffee Association dropped a bomb as Expo opened—that it had annexed the Q certification program from the Coffee Quality Institute, essentially rendering the once-independent CQI and the standard it spent 20 years building defunct—and that its Coffee Value Assessment score sheet would be moved from beta testing to universal adoption both between the SCA and CQI (with talks in progress with Cup of Excellence). A partnership with FNC in Colombia to use the SCA-CVA sheet for all export cuppings buttressed the emergent reality on Thursday: CVA is here to stay, and the previous sheet—used globally since 2004—is out. (Author’s note: I am aware of ongoing talks between SCA and COE as well for use of the CVA; with USAID funding gone, I wouldn’t be surprised if another merger were on the horizon)

The CVA aims to create a higher-resolution picture of a coffee by gathering extrinsic details in addition to a (revised) sensorial evaluation. The details it captures, though, are so utterly generic and superficial that it does nothing more than capture basic biography like variety, process and elevation and certifications—failing to explicitly direct the capture of actual extrinsic qualities that might add value to a coffee (agroforestry, woman producer, indigenous producer, smallholder, uncertified but biological methods of production, etc.). But in spite of this flaw in execution, its underlying premise makes some sense: quality as we’ve come to understand it has been adopted by the specialty coffee industry as a signifier of sustainability.

In 2025, not only is “quality” core to the identity of specialty coffee, but it’s regarded as industry doctrine that the pursuit of “quality” is a means to create a more sustainable industry.

There is some data supportive of this notion. The 2024 Specialty Coffee Transaction Guide, which aggregated, summarized and analyzed data donations from 123 companies around the world (cooperatives, exporters, importers and roasters) accounting for more than two billion pounds of specialty green coffee captured through nearly 105,000 contracts, examined the movement of the C-market as an index price relative to the data donated. In their analysis, the authors found that by separating lots into smaller tranches of exceptionally high quality coffee, a producer could, in theory, earn more money—even more than if they produced larger lots of greater volume or of lesser quality. For example, in the period of September 2018 to June 2024:

This trend held true even compared against gains of the C-market in the same period analyzed: 

In a 2024 study in World Development Perspectives, the authors supported the adoption of the CVA as a way to consider a coffee’s “sustainability criteria.” In their analysis, they provided evidence that through market access to higher-paying international customers (“direct trade”) and cultivation of higher-cupping and exotic cultivars like Gesha, producers were able to make more money for their harvest. While the study showed economic benefits, with specialty and direct trade relationship coffees earning twice the price of FNC coffees and exotic varieties earning 60-80% higher than average, it illustrated other benefits as well, including social/community benefits, ecological preservation, improved wages and permanent, full-time staff, and healthcare versus commercial coffee producers—buttressing the belief that “quality” does in fact help to satisfy the social, environmental and economic pillars holding up “sustainability.”

In my work as a processing and post-harvest consultant, my goal is most typically to use existing infrastructure and as few resources as possible to improve the value of a producer’s harvest. While this often does mean improving cup quality, it can also mean merely improving uniformity or shelf life, or improving efficiency. The strategies producers typically employ for value addition are: lot separation/quality differentiation, processing-related enhancements and the cultivation of exotic varieties. 

But the quality intervention that makes sense for a producer is subject not only to resource availability and risk tolerance but also market access and macroeconomic conditions. It doesn’t make sense, for example, for a producer to spend money on additional steps or layers of sorting if the differential in price received for the resulting lot isn’t significant enough to justify it. 

Changing market conditions  as well as market access introduce noise into our expectations of a correlation between price and quality: sudden high prices, in fact, create conditions that tend to result in lower average quality.

In reviewing the piece I wrote about my initial processing work with Lino, I wondered how the economics of the interventions we used would change if we were to have done that work in 2024, as the C-market began its historic rise, instead of 2017 or 2018.

From my notes, I recalculated the impact—setting the intervention in the same period as the data reported by the 2024 Specialty Coffee Transaction guide: September 2018 and June 2024.

In 2018, the C-market price was below $1; the price offered by the FNC was below the typical cost of production, meaning that coffee production was a money-losing enterprise for most coffee growers. Lino sold his coffee through a private specialty exporter, though, who paid above the FNC’s daily price based on quality. The coffee we processed typically sold as an 83-84 point coffee, but I’d agreed to pay the price of an 86.5 regardless of the outcome of the experiment.

Back then, the effects of climate change on the harvest, while present, weren’t as pronounced as they are today. Main harvest still ran with some predictability between August and October, with mitaca in May or June. This predictability meant that it was possible to have labor available for assistance in the harvesting activities as in Colombia, laborers often are migrant workers who follow the harvest as it moves through the country. It was the year before the Venezuelan presidential crisis, which brought a flood of refugees across the border into Colombia, but the wave of migration between the two countries following Maduro’s 2014 election and the 2017 constitutional crisis brought additional labor into Colombia. The 2016 peace agreement between the FARC and Colombian government seemed to be holding steady—improving the security in the southern departments of the country and enabling us to be more exacting and demanding with cherry selection and sorting.

We were able to leverage the moment in history to deliver a higher quality coffee and earn a higher price.

By June 2024, the situation had evolved: the peace with the FARC had collapsed with offshoots gaining strength, resulting in a deterioration of security around Palestina; Covid-19 disrupted the distribution of goods through the countryside; climate change had taken its toll, extending the harvest to small pulses over nine months of the year. Meanwhile, in the same period, the COP had lost strength relative to the U.S. Dollar. making imports—of food, of fuel, of agricultural inputs and pesticides—more expensive.

And the C-market had risen—to $2.24 per lb.

As a result of labor shortages and the increased competition for workers, to ensure selective picking and sorting of cherry, we’d have to pay more than we did back then—by the equivalent of about $0.20 per pound. Even only partially accounting for the cost of production impact of inflation—which, by 2024, had nearly normalized following pandemic high levels—the higher market price and higher cost of labor dramatically change the economic picture:

The profitability resulting from selling to the FNC in 2024 is approximately equal to that of the coffee sold through processing interventions in 2018 (Observation A). If a producer was satisfied with their profitability in 2018, this means that rather than paying to process coffee as a specialty lot—selectively picking within specific cultivar-separated blocks, sorting cherry, fermenting slowly, and drying slowly to stable moisture—a producer could focus on yield- and throughput-focused styles of production, cutting costs to improve profitability further. Average qualities would be expected to decrease in this scenario as a result of these economics.

The differential between the price paid for an 86.5 point coffee and an 83.5 point coffee is virtually erased (Observation B) as a direct result of higher costs associated with the harvest. Once again, unless they had a specific buyer or contract to fill, it may not be worth the effort or expense to utilize quality best-practices in the hopes of selling a coffee for 86.5; should that coffee for whatever reason fail to reach its quality goal—falling just short at 85.5—the producer would actually miss out on profit they would have gotten had they, instead of using quality best-practices, simply strip-picked and dried fast (Observation C).

In order to incentivize production and separation of higher-cupping (87+) lots, a buyer—an exporter, importer or roaster—would have to pay more, pay quickly and pay in full. And in this case, the price offered by the exporter for an 87.5 point coffee—payable in cash, on delivery of the lot—was in excess of double the price for an 86.5. 

In contexts where coffee is purchased as ripe cherry by a washing station, such as in Ethiopia, the effect of high prices on quality is typically even more pronounced. Because, in these contexts, the direct beneficiary of high prices is the exporter, there is typically competition for collection of as much raw material as possible (cherry) to produce exportable coffee. As a result, standards for sorting and ripeness are typically relaxed as are typical separations based on elevation.

Every Tuesday through the harvest, the Ethiopia Coffee and Tea Authority publishes the minimum registration price for exportable coffee by grade, region, process and producer type. This price expresses a legal minimum price for contracts for a given coffee, which all must be registered with the government for export and to receive foreign currency as payment. In calculating its minimum registration price, the CTA factors in costs of production (such as cherry prices), the strength of the birr and—while it tends to lag behind as a way to reduce volatility—the movement of the C-market. 

Actual trading prices, though, reflected a different reality—with grade 2s trading just 0.10 to 0.20 per pound below grade 1s. As a result, very few were produced; they got bulked into Grade 1 offers.

In a market supportive of a “do less” approach to production, I observed a decrease in average cup scores (particularly for naturals and lower grades) as well as higher quaker counts across the offer samples I received between November 2024 and January 2025. This came even as liquidity issues and limited access to financing suppressed the most extreme effects of cherry competition that Ethiopia faced the previous year, prior to birr devaluation.

And with minimums for washed Grade 1 coffees from Guji around $4.50 in December, to secure coffees of the highest qualities or from the best-known producers, we’d end up signing contracts with agreements to pay anywhere from $5 to $11 per pound  FOB—with some producers seeking prepayment or financing in the form of credit ahead of payment they’d receive upon shipment. 

In parallel to the rising C-market, in August 2024, Cenicafé unveiled its newest cultivar, which it dubbed “Castillo 2.0.” Like the original Castillo, Castillo 2.0 is the result of breeding Hibrido de Timor with Colombia’s so-called traditional varieties—namely, Caturras—in an effort to produce a cultivar adapted to Colombia’s environmental conditions but selected for high quality potential, high yields, manageable stature and resistance to both roya and coffee berry disease. Castillo 2.0 doesn’t just represent one type of tree genetically—but rather 40 different lineages, with some descending from parents of (Caturra x Canephor) and Caturra, and others using Timor HdT 1343 as a parent to select for its resistance attributes.

In the announcement of the new variety, FNC asserts that through genetic control of disease (e.g. the breeding of resistant varieties) they’re pursuing more sustainable cultivation; they state that the application of pesticides not only costs producers on the order of 150-200 million USD per year but also contributes to “plastic container waste.”

By releasing a diversity of phenotypes nationally, Cenicafe hopes that Castillo 2.0 will prove more resilient to roya, for longer: “Coffee breeding for resistance to a fungus like rust becomes a challenge because developing a resistant variety can take around 20 years of complete evaluation and selection cycles, while a fungus like rust completes several cycles in one year and can quickly adapt to a new genotype.”

But, as a consequence of this strategy of releasing multiple lines, as with its predecessor, not all Castillo 2.0 are created equal.

The documentation released by FNC lays out the marketing callouts of the new variety in comparison to V. Castillo clearly in a table:

And later, its cup characteristics and quality: 

In a the 2024 context of the C-market and an internal price of more than 1.4m COP per carga, an 84-85 point coffee is “good enough”—as in the case with Lino’s coffee, a producer in June 2024 would have stand to profit anywhere from $0.35 per lb (selling through the FNC) or up to $0.53 per pound (selling to a private exporter).

But that’s incumbent on the market staying high; if it were to fall to the levels of September 2018, that 84-85 point coffee would, with today’s FX rate and inflation, mean that a producer of Castillo 2.0 once again isn’t profitable—whether selling through the FNC or a private exporter.

And of course: the price could very well fall.

The Castillo 2.0 strategy fails to account for the reality of the modern, speculator-driven C-market: by incentivizing rapid expansion of coffee cultivation during a high water line in the market, the FNC and Colombia, the world’s third-largest exporter of coffee, may flood the market, an oversupply which could lead to a sharp market crash—as in 2014, after trees planted during and after the last major roya outbreak began to produce; or 1997, when Vietnamese and Brazilian production soared; or 1989, when the ICA quota system collapsed leading to global oversupply.  And worse: the full-sun, commercial monoculture style of cultivation recommended by FNC for Castillo 2.0, without appropriate management, risks damaging soil fertility—not only reducing potential yields and quality but also lowering the trees’ defenses against disease, in spite of their vaunted resistance—just in time, no doubt, for the release of Castillo 3.0.

It’s more of the same.

The FNC, which subsidizes itself through a 6% export tax on coffee, has a vested interest in continuing to promote varieties which will grow exports—regardless of how the macroeconomic effects impact the small scale farmers it represents. But, as the data suggests, producers who instead choose to grow less but better coffee and focus on quality practices may, with sufficient access to specialty buyers, defy market movements, achieving greater economic security and prosperity.