In July’s newsletter we discussed the new crop being in full swing in Brazil. A few weeks later and the big news out of Brazil is the frost that hit on the morning of July 20th.
A significant frost in the growing areas of Brazil has a huge impact on coffee growing and the wider industry. Every producer, exporter, importer, roaster and retailer around the world will be keeping a serious eye on the weather reports over the next few weeks while the frost season should come to an end.
So why is it such a big deal? Well Brazil is the largest producer of coffee in the world and what happens there has real importance. In the 2020 crop, Brazil accounted for 40% of the world’s coffee production with 69 million bags of coffee produced. This year’s crop was estimated to be around 45-50 million bags as Brazil is in its ‘off’ year in its biennial cycle. The early estimates of the frost damage are a loss of around ten percent of the production, approximately 4.5 to 5 million bags of coffee, or five percent of the world’s production. Add to this the difficulties with Covid and the shipping situation and we start having serious supply problems which will have an impact on the next few years. Prices have and will continue to increase in the coffee markets.
There have been two major frosts in Brazil in modern times. In 1975 the Black Frost destroyed over half of the coffee trees in Brazil. This sent coffee prices skyward on the commodities market and had devastating effects on the farming communities. The 1994 frost was also devastating and had similar consequences. The difference this year is the frost has hit on the back of a recent drought, and of course the pandemic. Things were already difficult before the frost got involved.
Thankfully, the Carmo Coffee farmers have had limited damage to their crops. Most of the crop was in and as the Carmo farms are at a comparatively higher altitude than other farms in Brazil they had limited exposure to the frost. This frost was a result of temperature inversion which means the lower areas of the farms were covered in rapidly cooling air and cloud formations which made a freezing layer under a higher layer of warmer air. The higher areas of the farms were in essence protected in this warmer layer, but it acted as a kind of lid which trapped the cooler air below and drove down the temperatures.
For the farmers that have frost damage it will be a process of seeing how the trees react over the next few weeks and months. Frost-burnt leaves are black and will fall. The farmer will then be able to inspect the skeleton of the tree and see how far the damage goes. Most newly planted trees will likely die as they just aren’t large and robust enough to deal with the damage. Any plant nurseries may be similarly affected so where a farmer needs to replant there may not be stock to use. Older trees have a better chance of survival depending on where they are in the plant cycle – after a good prune to remove the damaged branches the trees will become productive again.
It was not just coffee that was affected by the frost. Brazil is a large producer of oranges, sugar, soy and corn and these crops have all sustained losses. The full extent of the damage will become clear over the next few months and as Brazil’s agricultural sector is a big part of their economy, they are likely in for a rough time.
Many thanks for reading and see you next time,