Pocos de Caldas, Brazil, 27 Nov, 2008 - Brazil's coffee farmers are enjoying timely plentiful rains for next year's coffee crop, but with soaring costs, trouble finding workers and low selling prices, many say their good fortune ends there.
Coffee prices tumbled last month along with other commodities as the scale of the global financial crisis became apparent. Prices slumped below $1.20 per lb in October and have languished there since then, down from about $1.50 in early September.
Farmers say that leaves them little else to take home after selling their coffee except a sense of despondency over the season ahead. The pinch is felt most acutely for growers in hilly areas like Pocos de Caldas, where the topography limits mechanization.
"My idea is to leave coffee and plant eucalyptus trees," said farmer Rogerio Xavier, the sixth generation to run the family coffee farm about a half-hour drive from Pocos. He said he would wait two more seasons to see if things improve before switching.
Antonio, his elderly father, said they had spent about 270 reais (US$650) to produce each of the 4,000 bags harvested this year and lost 30 reais ($72) on each despite some creative cost cutting.
"I'm even drying the beans outside now to save on wood," said Antonio, standing in a barn beside a towering cylindrical coffee drier that was gas-fired until the fuel's cost forced him to switch to wood. The machine enables fast drying of beans in any weather.
One of the fastest-rising costs growers have faced in the past year is the doubling of the price of fertilizer -- a knock-on effect of high gas prices from which its nitrogen is derived.
Inside his farmhouse, he produced a print-out breakdown of the average selling price and costs since 1994. It put fertilizer costs at 770 reais in 2007 but almost twice that at 1,368 in 2008.
"We need a higher price, nothing else," Antonio said. "I've never seen anything like this in my life."
With world coffee prices fluctuating according to demand and supply which in turn depend on good weather and husbandry, growers have grown accustomed to recurrent crises from the peaks and troughs coffee and other commodities go through.
LOW SEASON
Though some growers say they are now more rigorous collecting coffee husks during harvesting to use as a free source of organic fertilizer, in these hilly parts, there is little scope to cut labor costs with large ride-on coffee harvesters.
One of the most popular presidents in Brazil's history, Luiz Inacio Lula da Silva, a former factory worker, has irked farmers here by overseeing several significant increases in the minimum wage to reduce the nation's gaping income disparities.
Farmers often employ several dozen coffee pickers for the three or four months of the harvest period each year.
"Because of this, manual coffee production is going to end," said Luis Alfredo de Almeida, director of the CafePocos cooperative of nearly 600 farmers. He painted a bleak picture of coffee farming in Pocos from his warehouses in the center of the town.
"My son has gone off to study agronomy. He doesn't see any future in mountain coffees ... (Young people) are off working in other sectors," he said.
In flatter areas where mechanized harvesters can be used, doing the work of many human hands in a fraction of the time, they are usually hired or shared among several growers on all but the largest farms because of the prohibitive purchase price.
Turning to the classified ads of farms for sale in a newspaper produced by coffee cooperative Cooxupe written for its near-5,000 members, the manager of its warehouses near Pocos, Sandro Dias, said some had given up on coffee in Pocos altogether.
"Before there were only a few, now there are 10 listed here," said Sandro Dias at the regional office of the Cooxupe coffee cooperative, a few miles from Pocos. Others are sometimes sold to the highest bidder on Mercado Livre, Brazil's version of auction Web site eBay.