Quality and Economic Analysis of Green Coffee Beans Stored in Purdue Improved Crop Storage Bags
Abstract
Coffee farmers and cooperatives in Colombia are plagued by the high humidity that engulfs the Central Andean Mountain Ranges, where the majority of the country’s coffee farming presides. Farmers are forced to sell their yields immediately after harvests in order to mitigate quality loss due to the high moisture. Cooperatives are generally forced to store green coffee until enough volume is collected for export. Farmers and cooperatives are unable to utilize optimal storage methods to capitalize on price seasonality, leading to lower profits. Coffee is a luxury commodity and its price is almost entirely dependent on its quality, making it crucial to utilize storage solutions that maintain its quality over time. Purdue Improved Crop Storage (PICS) bags are effective at maintaining crop quality during storage. The hermetically sealed bag system inhibits the transfer of moisture and oxygen between inside the bag and the atmosphere. This study utilizes PICS bags with green coffee to better understand the quality and economic implications of storing green coffee in hermetically sealed bags. PICS bags with the standard three layers (PICS3) were tested along with PICS bags with two layers (PICS2), and Traditional jute sacks. Moisture content, water activity, and cupping score were measured to understand the quality of green coffee during storage over a period of six months. Sample price, a New York Stock Exchange (NYSE) base price, and historical coffee prices were analyzed to understand the economic implications of storing green coffee beans in PICS bags. The results of this study showed that PICS2 and PICS3 bags maintained overall green coffee quality over the experimental time frame. There was also no statistical difference between the quality of green coffee stored in PICS2 and PICS3 bags. Water activity was also found to be an important green coffee quality indicator. PICS bags were found to be economically successful, with a positive net present value return to storage over the three year lifespan of the PICS bags. PICS3 bags were the most successful over the three years, with an additional 4895 Colombian pesos (COP) ($1.79 USD) per 50 kilogram bag on average. A reduced cost PICS2 bag was the second most successful over three years and the most successful over two years of storage, with an additional 3427 COP per 50 kilogram bag ($1.25 USD). The cost of the PICS3 bag is ∼$2.00 USD and an estimated cost of the reduced cost PICS2 bags is ∼$1.33 USD. Sensitivity and elasticity analyses showed that bag success rate had the largest effect on return to storage and bag cost had the second largest effect, highlighting potential for further research. Proving the PICS bags maintain green coffee quality during storage allows for continued research on the economic effects. Important implications derived from this research focus on a better understanding of the Colombian coffee market so that farmers and cooperatives can better navigate the industry. Storage without the threat of quality degradation allows farmers and cooperatives to be more autonomous in their market decisions, providing the incentive to overcome the risk of storage and raise overall income.
Degree
M.S.
Advisors
Foster, Purdue University.
Subject Area
Agricultural economics
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