Farm: Finca Santa Cruz
Farmer: Jose Argüello
Importer: La Nacional
Exportation: Joint effort between Jose and La Nacional
Price paid for the landed coffee at our roastery: 40CAD$/kg of green coffee (~18$/lb)
FOB Price paid by La Nacional: 25,80USD/KG
In this situation, this is also the price paid to Jose who handled all the processing and logistics up to the point where the coffee is at a facility, ready for export.
FOB, or Freight on board, means the price paid to account for all the cost prior to the coffee being safe inside either a boat, or in this case, a truck.
An FOB price can mean very little, especially if the producer isn’t in charge or involved in the export process.
Why? If the coffee is sold from the farmer to a mill, and the mill sells to an exporter, etc, it becomes difficult to know if the farmer was adequately compensated.
Jose was paid 25,80USD/kg, and he is the one who dictated the price based on his various cost (cost of production and labour at the farm, processing equipment, fertilizers, costs of living, transportation, etc.) something that, shockingly, is still not the norm in coffee.
Jose and family make a decent living while reinvesting heavily on new processing experiments and equipment. But they also reinvest a lot to make sure that farm workers have great living conditions and wages.
Sadly, not many farmers can have that much control over the price they receive, but we are grateful that Jose and his family have a bigger say in what they can ask for their hard work. Also grateful to have La Nacional working ethically and transparently with both producers and roasters.