Starbucks is Giving Coffee Farmers Lots of Money

According to Michelle Burns, senior vice president of global coffee and tea at Starbucks, the company is giving farmers some good money to compensate for falling coffee prices.

Burns has said that Starbucks has paid over 8,000 farmers in Mexico, El Salvador, Nicaragua and Guatemala a premium totaling $20 million. This is on top of the regular amounts it pays over futures prices for specialty arabica beans, said Burns.

“When we looked at what the cost of production was across the range of countries, it was clear that the Latin American countries had a serious situation in hand,” Burns said in an interview.

“When a premium specialty arabica coffee of the highest quality — the arena that we play in — has been impacted, with historically low coffee prices at around $1, there are many countries where that’s not sustainable living.”

Futures have fallen this year to their lowest in more than a decade on the ICE Futures U.S. exchange and are hovering around $1 a pound.

“The desire would be that the market has some correction. That would be the ideal state,” Burns said. “If the coffee crisis on pricing continues, we will look at both what we do on the financial side as well as our continued work with what we do with trees.”

“We’ve built this company around a diversity of flavor profiles from many growing regions around the world,” Burns said. “We know for certain we want farmers to stay, we want the diversity of the origins we have the privilege to buy from.”

Disclaimer: We have no position in Starbucks Corporation (NASDAQ: SBUX) and have not been compensated for this article.