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Of Coffee, Grounds, and Percolators
© 2002 Stuart Daw
Since this is the Tea and Coffee issue (of Canadian
Vending Magazine), let’s look at just a few random items, beginning with
the prime question: "Wha’s happenin’ to the coffee market?" Here
is my opinion, and I’ll charge you what it’s worth, which may be nothing,
depending on the next whim of a Fund manager who is trying to make a market to
cash in on.
In the long run basic economics, the Law of Supply and Demand, controls prices
for everything. The best cure for low prices is low prices. But perhaps that’s
a bit too terse. What it means is that with any product when prices are low,
marginal operators can’t compete and are squeezed out, while others divert
assets to greater wealth-producing activity. There’s a shortage and prices
rise.
In the case of coffee, green costs fall, especially for low-grade coffee, and
marginal farmers can’t afford the fertilizers, pesticides and herbicides
needed to maximize yields. They don’t have the money to pay pickers at harvest
time, though with several kids typically in the family and a lot of busy little
fingers available for picking, the cherries are not likely to rot on the trees,
even if coffee is at a rock bottom price. It’s not like Saskatchewan wheat
farming in the Great Depression, when college kids brought in from Ontario got
off the train only to find themselves standing in fields a mile square loaded
with sheaves of grain for stooking. A very depressing Depression it was for them
as well as the farmers.
As of mid-September 2002, the coffee market is up some 15 cents (US) over the
lows of a month ago, around 28 cents (Canadian, roasted). The fundamentals don’t
support it, but the Funds, which were bearish, suddenly switched and started to
go long. The rising market frightened skittish roasters in many cases to join
in, providing further impetus. And while supply and demand today don’t seem to
justify it, we see the top ten arabica-growing nations all looking forward to
lower yields next year. That is unprecedented, and may well mean objectively
justifiable support for higher prices.
In the long run, more stability in coffee would prevail if the industry were
left alone. The World Bank and other agencies injecting themselves into the act
have helped to exaggerate this situation. In an effort to "help"
Vietnam, aid to that country gave financing and incentive to grow more coffee.
Why are we surprised then when Vietnam rises to be the number two grower in the
world today, having passed Colombia for that honour? This only provides further
proof if any were needed that governments, individually or collectively, should
keep hands off. The desire to sacrifice one group (the haves) to another (the
have-nots) only made the have nots poorer, giving lower prices to the haves.
The market, if allowed to exist untampered-with by governments would by its
nature be self-regulating. What comes to mind is the origin of the phrase
Laissez-Faire Capitalism. Louis XIV of France, needing more money to conduct
foreign wars, sent his minister of finance, a man named Colbert, to a meeting of
France’s top industrialists. He was, in effect, asking those present how the
government could help them be more productive, not mentioning of course his
purpose, which was to enable the state to receive more in taxes.
A haggard businessman named Legendre stood up in the midst of the meeting, and
in a firm voice said "Laissez-nous faire", which of course means
"leave us alone" in plain English (or "get the H... out of the
way," in modern Canadian parlance).
Meanwhile, let’s tiptoe through all this hoping for nothing too calamitous to
happen with prices in the long run. And let’s promote good coffee.
In closing, and again dealing with the coffee
issue, I was surprised when an Internet coffee provider, a customer of ours,
passed along a couple of questions from his customers. One was why grinding
coffee made coffee instantly (pardon the expression) stale. The other had to do
with why the percolator was passé (I thought it was gone long ago).
As to the grinder making coffee stale, we can say "not guilty as
charged!" It should go without saying that a grinder cuts the beans into
tiny pieces, allowing a greater surface of coffee to be exposed to the air, thus
the staling effect over time, the degree of which depends on how it is stored.
But the grinding per se is not the cause of staling.
One good thing about the percolator — It made the house smell great. The bad
things were almost too numerous to mention. The boiling water rising in the tube
cooled while passing through the cold water bath on the way to the basket. A few
minutes of "blips" and the grounds became super-saturated, eventually
dripping into the cool water below. Constantly changing temperatures were bad
for the brew, and once a weak solution of coffee was gathering in the pot, it
was boiled up the tube for a second run. The whole process took too long,
tending to over-extract the coffee. One can not imagine a worse procedure for
making it. But then it did indeed make the house smell great.
STUART DAW'S ARTICLE ARCHIVES:
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