Read about our recent San Jacinto micro-financing project
We recently launched a micro-financing project to connect our coffee community in Canada with Doña Isaura’s farm in Honduras which wrapped up at the end of February 2019—thank you to everyone who purchased this coffee during that time and supported this initiative. This meant that $1 from every pound of wholesale San Jacinto sold, and $1 from every retail back of San Jacinto sold (or $1 per half pound) was put towards building raised coffee drying beds on the farm.
Oftentimes, increased quality in the cup leads to an increased premium for coffee producers. Raised beds, coupled with longer drying times, are a cost-effective and low impact way to hopefully improve quality. In life, as in coffee, there are no guarantees but we hope this can be the first step of many alongside Doña Isaura.
What We Hope You Remember
We know it can be hard to read all of the information about every coffee — we don’t think you need to. However, we provide it all here for those who are interested. For those who don’t have the time, here’s what we hope you learn about this coffee.
- Doña Isaura is a second generation coffee farmer who is now 76 years old.
- For most all of the time she’s operated the farms, she sold her coffee on the commodity market until 2015. She’s now certified organic and is selling everything at least at the Fair Trade minimum price.
- Due to her advanced age and the fact that her children have left the farm for other work opportunities, the future of this farm is in doubt.
- De Mello is currently working on a micro-financing project with the goal of connecting our coffee community in Canada with Doña Isaura’s farm. $1 from every pound of wholesale San Jacinto coffee, and $1 from every 1/2 lb of retail coffee is being put towards buying coffee drying beds for the farm with the aim of improving quality.
Pacayal Coffee and De Mello
In September 2017, we were approached by an organization called TFO Canada and offered the opportunity to connect with a wide range of Honduran coffee producers.
As part of this meeting, we were introduced to Edgar and Karen Carillo, a young brother and sister who operate Pacayal Coffee in La Paz, Honduras. They themselves are coffee producers and saw that there was a need in their department to better represent and support their local coffee growing community. As such, they reached out to people in search of funding, and after taking in some capital, began the process of developing a group of farmers that would be represented by Pacayal.
Edgar is a hard worker. He has gone everywhere from Europe to the United States and Canada, tirelessly working to connect his producers with these markets, and is highly motivated to shift all of these producers he works with to the Fair Trade Organic market, or better, the specialty market. As he says, “la mejor idioma es la calidad” — The best language is quality. The quality of Pacayal Coffee has spoken for itself as in short order, he’s found himself a specialty market base in the United States, Northern Ireland, and Europe.
We are amongst his first buyers in Canada, and we see a lot of potential in Edgar and Pacayal. Honduras is an emerging coffee market, its volume has exploded in the last few years, especially in Canada. While there is some truly exceptional coffee being produced in small sections of the country, there is still a lot of growing and learning to do for other producers to meet these growers standards.
Pacayal currently shares a dry mill, and is still in the process of building their own washing station where cherries can be brought for processing by the producers who don’t have such a set up in their own farms. They’re also working to build a cupping lab and quality control centre in the same space. This will lend a great deal to increasing the quality of all of the producers they are supporting, and should go a long way to connecting them to the global specialty market.
Doña Isaura Martines
Edgar sent us several samples from Pacayal producers, but the ones that won came from Doña Isaura Martines, who is basically his superstar producer in the Pacayal roster.
Over breakfast in her modest home outside the town of Opatoro, La Paz, we learned a lot about her unique story. Her father, Don Antonio, was at one time the largest coffee producer in all of Honduras. He started with his own farm and slowly began to purchase land from those around him, growing to encompass six distinct fincas accounting for around 50 hectares of land. In Honduras, many producers operate on less than 5 hectares, so this is a huge operation.
Don Antonio was also very advanced for his time, technologically speaking. He built a beneficio in 1982 on his own land, which is now mere steps from Dona Isaura’s house, including depulpers, fermentation tanks, and drying patios, as well as an office and bodega for storing coffee. From these patios, at around 1700masl, you can see all the way to El Salvador, the San Miguel volcano visible on clear days.
Don Antonio spent his whole life selling coffee at bottom barrel prices, and this is why he kept growing his land. At this point, volume was the way he was going to stay afloat. In 1998, Dona Isaura took over the farm and has been tending to it ever since. She continued in the same path as her father, selling large quantities of coffee at local market price until only three years ago in the 2015 harvest, when she began working with Pacayal Coffee.
With their help, she took the first step of becoming Fair Trade and Organic certified, which brings her a minimum of $1.90. However, on the basis of her lifetime of knowledge and skill as a coffee grower, Edgar has worked to connect her also with the specialty market, with buyers like us, who are willing to pay a premium based on the quality. As such, we paid $3/lbUSD FOB for this coffee, $1.80lb over the current market price and $1.10 over the FTO minimum.
Working with Doña Isaura represents a challenge and an opportunity. At 76 years old, with two children who are no longer interested in working on the farm, the future of San Jacinto and her other farms is up in the air. This is in fact a real example of how a lifetime of producing coffee for little money was likely a hard pill to swallow for her children, and they moved to the city in pursuit of other opportunities.
While Doña Isaura is doing a great job for her age, she’s also working with a well-equipped but dated beneficio for processing, plus an enormous volume of harvest that can make consistency difficult. As well, due to a lack of connected specialty buyers she’s had little chance to receive feedback on her coffee, from which she can learn to improve her harvesting and processing.
Our hope is that we can continue to work with Dona Isaura and focus on lot separation where we can work closely on the whole process together for the education of all, and are in talks about the possibility of investing into improving the infrastructure on her farm to assist with this.
Purchasing Philosophy and Price Transparency
As part of our ongoing purchasing philosophy, we’re always seeking to develop levels of purchasing in which we buy from one producer or group of producers who have ore access to the specialty market and/more resources while also purchasing from those who are more on the fringe of the specialty market. Honduras is a great place for this as the market is growing very rapidly and many producers are seeing the ability to earn more for their coffee.
To be specific, our purchases in 2018 then include the always exceptional Beneficio San Vicente in Santa Barbara as the more resource based operation, while Dona Isaura represent s the latter part Next year, we hope to add another small producer who is attempting to access the specialty market.
Here is a breakdown of percentage of every dollar FOB that goes into taxes, support to IHCAFE (Honduras Coffee Institute – Producer support), dry milling, exporting, financing, and Pacayal coffee.
You will see a large portion goes to IHCAFE, relatively speaking. IHCAFE is a support structure that helps producers to improve their quality to gain higher prices for their coffees. This has included everything from establishing a national cupping school to offering technical assistance and training to farmers, to establishing nurseries and greenhouses, and they also have been been working on a project to provide producers access to low interest loans to buy processing equipment.
Sale price $3.00USD/lb
Taxes 1.5% $0.045
IHCAFE License $0.0425
IHCAFE Trust $0.09
Milling and selection $0.35
Exportation $0.10
Financing $0.05
Pacayal Coffee Fee $0.10
Producer price $2.23USD/lb
As you can see, there is a fair amount of costs included here before the producer even gets their money, it’s near a 25 percent loss form the FOB price.
Were Dona Isaura to sell her coffee at the FTO rate, she would still pay the same amount as she does selling on the specialty market.
As such, at the FTO minimum of $1.90, she would have taken in $1.42USD/lb. Had she sold this coffee at the market price then of $1.20, she would have taken in less than $1USD/lb for her coffee, which scored 84 on our tables.
We bought 20 69kg bags from Dona Isaura this year, our largest single purchase from Honduras ever. At the price we paid, after the above costs, she took in $6,770.28 USD. As the Honduran Lempira is valued at 24 Lempira per USD, this is a total of $$162,629.29 Honduran Lempira.
We are a small buyer, as far as the overall coffee production of Honduras goes, but it is our hope is to work together to increase the quality of Dona Isaura’s coffee, and to progressively pay more each year, thereby lending some level of economic security. We also hope these efforts will lead her to greater success with the broader specialty market.
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