Mexico City, Sept 1 - Mexican coffee growers expect the coming harvest to be healthy, but high costs, debts and mistrust of a volatile market mean output battered by years of low prices is still unlikely to reach pre-crisis levels.
Light rains in recent months mean coffee berries have ripened evenly and growers are optimistic a U.S. Department of Agriculture crop estimate predicting a moderate increase in output in the 2006/07 harvest is more or less accurate.
"So far there has been good weather, better than last year which was very rainy," Fernando Celis, president of CNOC, an umbrella group representing thousands of small coffee farmers told Reuters this week.
The coffee harvest officially begins in October but some lower altitude beans are already being picked.
The USDA report calculates a crop of around 4.2 million 60-kg bags, up 5 percent from the 2005/06 harvest, as some growers increase production to take advantage of higher world prices.
But Celis, who agreed with the USDA estimate, said Mexico needed to boost production by more than 1 million 60-kg bags for its coffee industry to operate efficiently.
"The 2004/05 harvest was the lowest in nearly 30 years. With lower production, the cost of getting each bag to market increases," he said. "Production is increasing too slowly."
Mexico produces no official crop estimates of its own since the collapse of the Coffee Council last year, which left the farmers without a functioning central trade body.
LABOR PINCH
Without a governing body, the sector does not have a successful drive encouraging farmers to improve coffee quality, one of the reasons its farmers do not enjoy the premiums paid for Costa Rican and Guatemalan beans.
Output slumped during a long price crisis earlier this decade, as Mexican growers abandoned farms or started investing in new crops.
According to International Coffee Association numbers, it bottomed out in 2004/05 at 3.4 million bags, after peaking at 6.6 million bags in 1999/00.
A wave of migration partly sparked by the price collapse and heightened by Hurricane Stan last year is now pushing up labor costs for farmers who stayed.
The flow of coffee pickers from Guatemala to Mexico's southern state of Chiapas has slowed since the hurricane damaged thousands of acres farm land in the region last year, and farmers say they are now paying $7 per day, up from about $4 per day last year, to find workers for their plantations.
In other regions like Veracruz, where cheaper Guatemalan labor is not available, some farmers are paying up to $12 dollars a day, Celis said.
"Now very few of the young are are getting involved in farming, which raises the problem of who is going to replace the coffee farmers of today," he said.
Many plantation owners in Chiapas, the top producing state, are heavily indebted after the crisis. Without money to invest in boosting output, they are finding it hard to pull themselves out of debt.
"The price is not that bad, but there is just not enough coffee to build up our capital," said Martha Zapata, who sold her family's San Antonio farm in Chiapas after Stan.
With less labor available and farmers reluctant or unable to reinvest in coffee after tough years and price fluctuations, Celis said it will be difficult for Mexico to bring coffee up to pre-crisis volumes.
"The problems now are not caused by the international market, they are Mexican, internal problems," he said.