Coffee rust disease is the greatest threat to the coffee industry worldwide and has the potential to improve or hurt Brazil’s economy while having a significant impact on the United States. Coffee is second only to petroleum for exports in developing countries. Over 500 billion cups of coffee are consumed globally each year. The worldwide coffee supply comes primarily from Central and South America accounting for 67 percent of production (Goldschein, 2011). Coffee rust disease is a wind-borne fungus that spreads quickly. Once infected, crop yields are significantly reduced (Arneson, 2000). In their annual reports from recent years, Starbucks and Dunkin’ Donuts both list increases in coffee commodity prices and shortages due to increased demand or diminished crop yields as potential risks to their revenues and profitability (Dunkin' Brands Group, Inc., 2013) (Starbucks Corporation, 2013).
There are two main varieties of coffee grown in tropical regions worldwide, Arabica (Coffea Arabica) and Robusta (Coffea canephora). Arabica, making up over 60 percent of the coffee produced worldwide, is prone to diseases and pest infiltrations (International Coffee Organization). However, it is considered to have a richer and more desirable flavor. For these reasons it is the coffee bean primarily used in the production of specialty coffee and the variety primarily served in US coffee houses (Specialty Coffee Association of America, 2012). Robusta coffee plants are hearty, mostly disease resistant, and have a bitter taste. The bitter flavor makes Robusta coffee beans less desirable for the specialty coffee industry (International Coffee Organization).
Brazil has a rich history with coffee production. They have been a dominate oligopolist in th...
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...rtant crop, especially in some rural areas. Shortages in Central America places pressure on Brazil to produce more coffee while prices for coffee rise. This is a boost to Brazil if they can meet demand. However, if Central America gets coffee rust disease under control, then the supply will increase and prices will fall hurting Brazil and the Brazilian farmers who depend on coffee for their livelihood. Changes in the price of coffee and quantity available could hurt the US coffee industry and alter the habits of United States consumers having a lasting negative impact on the U.S. coffee industry. The producing countries and consuming countries of the coffee industry are interdependent and currently poised to experience further market fluctuations together. It would be in the U.S. coffee industry’s’ best interest to work with Brazil and Central America on a solution.
The first chapter focuses on Brazil’s founding and history up until present. When the Portuguese were blown off course to Asia onto the coasts of Brazil in 1500, the Portuguese knew they had found a land filled with opportunities. The main attraction was the abundance of brazilwood which could be used for manufacturing luxurious fabrics in Europe. Over the centuries, exploration led to the discovery of more resources such as sugar, coffee, and precious metals that had made it a sought after country for colonization. Even to this day, Brazil maintains the image of a land with limitless resources since the recent discovery of oil and gas reserves and other commodities.
Carrillo-Huerta, M., & Bonilla, I. M. (2005). The effect of NAFTA on mexican agricultural exports to the united states: The case of coffee beans, 1970-2003. The Journal of Entrepreneurial Finance & Business Ventures, 10(2), 76-93. Retrieved from http://www.econstor.eu/bitstream/10419/55949/1/662664000.pdf
The setting for Stanley J. Stein's book Vassouras takes place in one of the most unique environments in the world. Housing large tracts of virgin rain forest, Vassouras represents the ideal climate for the coffee cultivation that has come to dominate Brazilian agriculture, and during the latter half of the 19th century proved as the foremost region for coffee growing in the world. However, by the beginning of the 20th century, Vassouras had declined as a major coffee producing region, and its decline demonstrates important aspects of Brazilian cultural and economic life. Vassouras ultimately lost its affluence as a coffee producer because of the destructive and ineffective agricultural practices of its farmers and the crumbling of the slave-based society that served as its dominant labor force. The experience of Vassouras also demonstrates larger themes in Latin American economics at the end of the 19th century.
The war in Vietnam ranged from 1956 to 1975, within these years many unconventional methods of warfare were used, such as “Agent Orange”, guerilla warfare and even events such as the “My Lai Massacre” occurred. The Vietnam War was a proxy war in which the United States fought the North Vietnamese who were backed by the USSR, we did not win the Vietnam war due to a lack of clear goals, and the impossibility to combat the North Vietnamese soldiers who by day were regular civilians but by night were using guerilla attacks on U.S. soldiers. Throughout the Vietnam War our troops and bombs caused large amounts of damage to the land of North and South Vietnam but the most damage was in our own home. Throughout the United States involvement in Vietnam, there were many adverse effects on our own lives, including the large increase of political, social and economic tension. The Vietnam War heightened social, political and economic tensions by causing inflation and a growing budget deficit of the United States. For the social tensions, it caused for the first time people protesting against a war and a lack of faith in the government due to being lied to. And as for political tensions the first lottery draft in history stressed many politicians due to an outraged population.
The most important part of the cup of coffee, the coffee beans, is typically harvested from South America, mainly because of the fact that Starbucks uses Arabica beans (Weinberg 1), which is dependent on a temperate climate that exists on the majority of the continent. The country that provides the biggest market supply of coffee beans for Starbucks is Brazil ...
Race and ethnicity are two words used very often in everyday speech interchangeably, thus making it seem like they mean the same thing. However, there is a significant difference between the two. According to Kerry Ferris and Jill Stein, race is “based on real or perceived biological differences between groups of people” (Ferris & Stein 2012). Ethnicity on the other hand is “based on common language, religion, nationality, history, or another cultural factor” (Ferris & Stein 2012). They’re social constructs, meaning that they’re concepts/ideas created and maintained by people who agree that they exist. All society’s have a tendency to categorize and identify people based on these two socially defined categories. Doing this creates a system of classification or categorization that leads to inequality. Societal resources such as wealth, power, privilege, and opportunity are dispersed according to this system of stratification (Ferris & Stein 2012). Such powerful social constructs always influence the members of society in some way.
The threats facing Starbucks include trademark infringements and increased competition from local cafes and specialization of other coffeehouse chains, and the saturation of the markets in developed economies, and supply disruptions. Furthermore, the increasing prices of its inputs such as dairy products and coffee beans pose a threat
Starbucks achieved the first principle by purchasing “coffee from small farmers in 29 different countries … [and buying] coffee at a higher than market price and guarantees future purchases” (Alter). With this, Starbucks has greatly impacted these small-scale farmer’s lives by insuring they have good long-term stability and financial security, farmers who aren’t otherwise noticed in the conventional market options. And “globally, Starbucks contributed over $3.5 million in Fairtrade premiums for coffee-growing communities” (Alter).
Coffee is a worldwide cash crop of which demand has exponentially increased over the years. “Coffee is (after oil) the world’s second most important traded commodity” (Cleaver 61). Competing coffee brewing companies wage war on offering the freshest, best tasting coffee the market has to offer. With such stiff competition there must be enough coffee beans deemed to be good enough in quality to supply the increasing demand. Starbucks can be considered one of today’s top competitors if not thee top coffee manufacturer presently in business. This successful company has had a huge impact on the coffee industry as well as the world. They have gone through great length to provide consumers with an excellent product as well as create a legacy that shows how to best go about running a massive corporation while keeping the environment clean and healthy.
When Starbucks started their target market were people who enjoyed coffee not just for the energy boost that they got from the caffeine, but people who enjoyed sitting down and drinking a well-prepared cup of coffee. Upon visiting Italy and falling in love with the coffee bars and the experience that they offered, Schultz envisioned a place between home and work where you could just sit and enjoy your coffee. Starbucks wanted to control their coffee from “raw green bean to the steaming cup” this meant that they had to talk with their farmers to make sure the quality was up to their standards. They
In the United States, coffee is the second largest import (Roosevelt, 2004). Furthermore, the United States, consumes one-fifth of all the worlds¡¦ coffee (Global Exchange, 2004). The present industry is expanding. It is estimated that North America¡¦s sector will reach saturation levels within 5 year (Datamonitor. n.d.). According to National Coffee Association (NCA), 8 out of 10 Americans consume coffee. In addition, it is estimated that half of the American population drinks coffee daily. The international market remains highly competitive. It is estimated that 3,300 cups of coffee are consumed every second of the day worldwide (Ecomall, n.d.). The latest trends included dual drinkers, an increase in senior citizens...
In this essay, I will conduct an economic analysis of the coffee bean market to explain how the short and long run affects price fluctuations, and whether or not government intervention should be used to stabilise prices to benefit the growers. The assumption of demand and supply is that as demand is increased, supply will need to increase to maintain the market equilibrium. Arguably the consumer has very little influence on the levels at which demand and supply operate at, though this is contested due to the fact that a product cannot be sold unless it is demanded(desired) by a consumer. Although increasing and/or decreasing either the demand or supply of a product creates a new market equilibrium, it is usually short lived and we expect
An article in the Seattle Post, describes the alliance that Starbucks is making to ensure that a sustainable supply of high quality of coffee is produce in Latin America. "Starbucks President and CEO Orin Smith said the alliance is partly his company's effort to pass on the "high price" of a cup of coffee to farmers." (Lee, 2004). He states that the high price enables them to pay the highest price to the farmers. Though the high prices to suppliers can demonstrate that money get to farmers with being diverted. Starbucks overall goal with this alliance is to buy 60 percent of its coffee under the standards agreed upon by 2007. "The agreement reflects the growing power of the premium coffee market and efforts to exploit it for the benefit of small farmers" (Lee, 2004).
When comes to Economic aspect, coffee is the second most traded product in the world after petroleum. As the country’s economy is dependent on agriculture, which accounts for about 45 percent of the GDP, 90 percent of exports and 80 percent of total employment, coffee is one of the most important commodities to the Ethiopian economy. It has always been the country’s most important cash crop and largest export commodity. (Zelalem Tesera p
Imagine a life without coffee. It is scary, isn’t it? Coffee is the elixir of life. This is seen with the statistic that Americans alone drink four hundred million cups of coffee each day. While the United States drinks a lot of coffee, Sweden and Finland drink more than double what Americans do with seventeen to twenty-two pounds versus Americas nine pounds (“Coffee Statistics”). There may be a day in the future where Monday mornings do not consist of a giant cup of coffee to get through the day, or meeting friends for a cup of joe to catch up on work or school. Coffee runs could come to an end by the year 2080 because coffee will be extinct due to global warming.