Thread: Mexico's Coffee Harvest Struggles With Labor Shortage

FEBRUARY 16, 2011, 12:33 P.M. ET.

Mexico's Coffee Harvest Struggles With Weather, Labor Shortage

By JEAN GUERRERO

MEXICO CITY—Mexico is facing what could be its worst coffee harvest in almost 20 years.

Unseasonal rains and cold weather have resulted in a crop that is ripening at an uneven pace. These coffee-harvest anomalies are exacerbated by a shortage of labor at farms where workers, paid by the bucket, haven't found enough coffee berries to pick to make it worth their time.

This year's crop escaped the deep freeze earlier this month that hit corn, tomatoes, bell peppers and other produce, but aging plants that produce fewer berries and new plants that aren't productive yet are also curtailing coffee output.

The poor harvest caused Mexico's coffee exports to decline 26% year on year during the first four months of the season, which began in October. While Mexico's government says this crop cycle's harvest will be 5% larger than last year's, at 4.4 million bags, Agroindustrias Unidas de México, the largest coffee exporter, isn't as optimistic, estimating 3.5 million bags will be produced this year. One bag of coffee weighs about 132 pounds.

The previous low point for Mexico's coffee sector was the 1992-1993 harvest, when 3.4 million bags of coffee beans were collected.

Mexico is the second-largest producer of washed, arabica coffee beans, the kind that are sought by roasters such as Starbucks Corp. Colombia is the largest producer but has suffered from multiple poor harvests, which slashed global supplies and sent prices surging to 13½-year highs.

"Any coffee losses from any country contribute to what we are seeing here in terms of tight supply," said Rodrigo Correa de Costa, an analyst at Newedge. "In Mexico, if there are any more reductions in output, it would definitely make the market tighter, especially for quality beans."

Concerns about fewer exports from the major arabica producers supported futures prices Wednesday. Coffee for March delivery was up 0.6% at $2.5955 a pound in midday trade on the InterContinental Exchange, after the futures touched $2.6365 a pound, the highest price since June 1997, in intraday trade Tuesday.

For farmers looking to take advantage of the higher prices, the poor crop and the lack of workers is frustrating.

Ildorfo Javier Aguilar, who owns about 12 acres of coffee plants in the southern state of Guerrero, said he made two 10-hour trips to the northeast part of the state to bring back 17 peones—a Spanish term for farm laborers—in the back of his truck.

Within the first week, six of them had left. He suspects it was to find work at more-productive farms.

"They just disappeared," Mr. Javier said. "In the evening, their cook told me a bunch of them were gone. They told him they were going to take a shower, and then they never came back."

Mr. Javier said he pays his laborers 17 pesos ($1.40) a bucket, which holds about 29 pounds of berries. That is about par with what other producers in Guerrero pay, although pay varies with the region.

Still, Rene Avila, director of operations for the Mexican Association of Coffee Production, said he thinks small producers will find a way around the labor problem, possibly by picking the berries themselves.

"With the way coffee prices are right now, not a single berry is going to remain on plants," Mr. Avila said.

On Mr. Javier's farm in early February, coffee pickers hunched over plants were wrapping their hands around branches and pulling from the base to the tip, ripping off all of the plant's berries and leaves and throwing them into baskets tied over their shoulders.

Coffee producers call this process ordeñando, or "milking," and it can hurt the plant's production the following year.

"If I make them strictly remove the ripe red berries, they'll only be able to do two buckets in a day, and they don't want to do that, so they just knock down all of it," Mr. Javier said.

Other producers have remained steadfast and are just starting their harvests more than four months into the crop cycle.

In a town near Mr. Javier's, nestled in a deep valley between thickly forested mountains, producers went from plant to plant themselves, picking only the individual berries that were a shiny, deep red. They had all day to make sure that only the best berries were picked, because there were so few of them.

"This is a question of productivity per hectare," said Ricardo Ibarra, who owns about 185 acres of coffee in Chiapas state. "If you have an apple tree with almost no apples on it and you pay a person per apple that they pick, they're obviously not going to want to work for you. That's the problem that Mexico has—it's a productivity issue."

Write to Jean Guerrero at Jean.Guerrero@dowjonesj.com

http://online.wsj.com/article/SB1000142 ... lenews_wsj

Gotta pay them more. Or pay them by the hour. LOL...a labor shortage. How ironic.

Yeah, maybe they hire some agriculture literate Americans.

So this years tough? So their attitude is screw it up for future coffee seasons?

"Coffee producers call this process ordeñando, or "milking," and it can hurt the plant's production the following year.

Brilliant!

They should bring in illegal North Koreans, Chinese, Haitians, etc. who aren't making anything and fill the jobs Mexico has with them...