Coffee Commodities and Starbucks

If we look at commodity trading from a purely conceptual standpoint, we find that the true reason for having a commodity exchange in the first place, was to stabilize pricing so that the American farmer could have a better idea of what his agricultural product would sell for once the harvest was complete. It also helped manufactures who needed raw materials to know how much money could be charged in their end product, by knowing their costs.

If we look at the Colombian coffee market we see some interesting things develop. Starbucks has bought up half of the plantations there. While Starbucks was buying coffee previously, those plantation owners made lots of money, now Starbucks owns the plantations and therefore is running them differently. And not buying coffee from the other plantations, therefore the coffee prices have been lowered throughout the country, causing a Terrible plight on the people. Yet, if those plantation owners been sold their properties to Starbucks, had never sold them in a first place, then they would still be making lots of money from Starbucks.

Starbucks job is to return shareholder value to its owners and that means operating very efficiently, that means pain as little as possible to wholesale coffee growers. It was able to do this by buying out the plantations and doing it themselves. Of course there is a different culture in Columbia and a large coffee plantations also cared for the workers. That is not the way a modern-day American corporation works. The plantation owners are very upset, those in still remain owners, who have not sold out because there is nowhere to sell their coffee, for the high price they previously sold to Starbucks. However one must also consider, that before Starbucks the coffee plantations made just average profits. When Starbucks came along, their profits when up temporarily, until five years later Starbucks bought their own plantations, and not just in Columbia, all over the world. Someday, coffee means will be less of a commodity then they are today, because Starbucks will own over 50 percent of all the coffee plantations.

Coffee plantations do not produce a lot of harvest until their many years old. Starbucks is controlling that commodity by owning 23 percent of the commodity. Whenever they don't use, they sell for a higher price than the original coffee plantations were selling for. Some might complain about this strategy, however if they are using mostly coffee are retail level and selling the rest then they are free to do that. The only real problem with this, is bad messes with the entire supply chain, in this case it heard the people, the hard-working people of Columbia. Think about the macro and micro economics of coffee commodities next time you sip on your Starbucks Coffee.

"Lance Winslow" - If you have innovative thoughts and unique perspectives, come think with Lance; www.WorldThinkTank.net/wttbbs

---

Those Elusive Coffee Beans!

With the spread of various coffee beans into our lives,... Read More

The Great Bean Mystery - Find the World?s Best Coffee

Who doesn't love solving a good mystery? Is the Loch... Read More

Fresh Gourmet Coffee

Coffee is one of the most popular beverages in the... Read More

How to Make Restaurant Quality Coffee At Home

Have you ever wondered how restaurants get their coffee to... Read More

Coffee in America

American coffee? Technically there is no such thing, at least... Read More

The Good, the Bad, and the Ugly of Coffee Consumption

Coffee is heavily studied, but study results contradict one another.... Read More

Extracting the Coffee Flavor

The beverage called coffee is the result of mixing dry... Read More

Gano Coffee - Can Coffee Be Good For You?

Coffee, in all sorts, could be a "pick me up... Read More

How To Clean A Coffee Maker

Ever wonder how to clean a coffee maker the right... Read More

Gourmet Coffee Beans

You can be a coffee lover without knowing much about... Read More

Arabica Coffee

As you may have guessed, Arabica coffee gets its name... Read More

The Coffee Culture in the USA

It wasn't until I moved to the US that I... Read More

How to Make a Great Tasting Cup of Coffee - Its Not Rocket Science

There is good coffee and absolutely abysmal coffee. Both may... Read More

Russian Tea drinking - The beginning

It is believed history of Russian tea drinking tradition have... Read More

Coffee Is A Historic Beverage, And It Makes For A Great Gift

Ahhhhh, coffee... a fantastic dark beverage that wakes us up... Read More

Tea at Sea

Marylyn Monroe famed amongst other things for her love of... Read More

Coffee Roasting: Learning the Fundamental Art of Making Coffee Can be Fun

Coffee roasting from light to very dark, is an art... Read More

Which Coffees are Highest in Antioxidants?

As researchers learn more about antioxidants with health and disease,... Read More

English Coffee

With English Tea being a very familiar term, English coffee... Read More

Coffee and Health

From the year dot, my mother taught all her children... Read More

Ganoderma Coffee - Can It Be Good For You?

Are you a coffee addict? Are you searching for a... Read More

History of Instant Coffee

Mention instant coffee to any connoisseur and you are sure... Read More

Mr. Coffee Versus Bunn-o-Matic - The Coffee Maker Battle Heats Up

For coffee lovers, there are few things more appealing than... Read More

Is Caffeine a Hero or a Villain in Your Life?

Many sober, law abiding people who would never dream of... Read More

Coffee and Depression: Coffee as an Antidepressant?

When you grab that morning cup of java, you're probably... Read More