The Coffee Science Foundation has released a publication entitled ‘Cost and Profitability Analysis of Producing Specialty Coffee in El Salvador and Honduras’, intended to understand the role of labour in specialty coffee.
In recent years, the global market for specialty coffee has witnessed a significant surge. This has piqued the interest of coffee farmers in producing countries, prompting them to increasingly explore its cultivation.
Honduras serves as a prime example, where specialty coffee exports represented 54 per cent of total exports in the 2019-2020 harvest season, as per the US Department of Agriculture. Similarly, in El Salvador, approximately 80 per cent of coffee exports were differentiated or specialty coffee, according to the Consejo Salvadoreño del Café.
The study examined two production systems in Honduras, organic coffee production, which has experienced a notable surge in demand, and specialty coffee produced within a conventional (non-organic) system. Given the lesser prevalence of organic production in El Salvador, the study focused solely on specialty coffee cultivated within a conventional system, referred to as ‘specialty-conventional’ in the study.
The objectives of this study were to determine the cost structure of specialty coffee in Honduras and El Salvador, and estimate the costs and profitability associated with specialty coffee in these countries.
Researchers began by documenting production practices, input usage, and costs. Then they developed management plans with the help of local coffee experts in each country to outline typical activities from planting to the end of the production cycle. These plans served as the basis for a semi-structured interview instrument used to collect data from farmers. The data collected was then summarised using cost-profitability models developed by the research team.
The study’s findings highlight significant differences in total costs and cost structures of specialty coffee between Honduras and El Salvador, which can be attributed to farm management and natural conditions.
The project was underwritten by Solidaridad, Rainforest Alliance, Conservation International, Rainforest Alliance, and the Specialty Coffee Association. The research related to this publication was performed by a research team led by Carlos Carpio, PhD, of Texas Tech University.
To read the full study, click here.