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Coffee Beans – Basic Economic Literacy Would Be Useful, No?

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It is indeed true that markets can have little pockets of really rather strange behaviour. Veblen Goods exist, those that are more desired as they become more expensive, even Giffen Goods exist, those where
effective demand rises as price does. but these are strangenesses, oddities, confined to small corners of the marketplace.

When we come to commodities, by definition those things widely traded, we do tend to think that the weirdnesses get ironed out. Except among those who work at Vox apparently:

The global coffee crisis is coming
It’s getting harder and harder to grow coffee.

That would be a danger to body and soul everywhere, especially to members of drinking households early in the morning. We’d thus like to get to the bottom of this.

But coffee is becoming harder to grow. It’s a notoriously picky plant that requires very specific conditions to grow. And as climate change warms the planet, the places that can sustain the plant are shrinking. A recent study estimates that by 2050, the amount of land that can sustain coffee will have fallen by 50 percent.

But while there may be time to save the coffee plant, the crisis has already arrived for coffee farmers. Deteriorating conditions and plummeting prices have made it difficult to make a living growing coffee, not to mention invest in measures to adapt to climate change.

Erm, what? If prices are falling then something is going on, right? One issue could be that demand is falling in which case it doesn’t actually matter that it is getting more difficult to grow coffee. For falling demand meeting falling supply capability really isn’t a problem, it’s one of those self-solving things.

As it happens demand isn’t falling. It is production that is rising:

If production of coffee is rising then it must be becoming physically easier to grow coffee. Even as it could be true that it is becoming financially more difficult to do so.

Basic economic logic tells us that it cannot – in the absence of that falling demand – be more difficult to grow coffee if the price is falling. Isn’t it a pity that Vox cannot recognise such basic economic logic?

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6 COMMENTS

  1. Vox supplies a link to “Fairtrade” talking about how they help coffee farmers. Fair enough – except that they claim it is a link to a survey showing that the area suitable for growing coffee will halve by 2050.
    So their inability to understand that falling prices due rising production is incompatible with the claim that it is getting more difficult to grow coffee is par for the course.

  2. As well as some basic economic literacy they need some basic environmental geography literacy – as in pre-O-level geography. Climate change won’t make coffee-growing areas shrink, it will make them *move* to where the optimum climate has moved to.

    Wah Wah, it’s too hot to grow grapes in southern France!
    So what, it’s warm enough to grown them in Norfolk instead.

  3. It could be true that the area suitable for growing coffee at a profit will halve by 2050 if there are no landowner subsidies. So do things with the land that could produce a profit instead; from saffron to housing and plenty in between, there are plenty of options.

  4. ‘ And as climate change warms the planet…’

    ‘Climate’ is an averaging of meteorological data over time. It is not a datum: not an input, it is an output. It cannot change anything. It cannot warm the planet. The planet may warm and this may change the climate. In any case there is no single planetary climate, so it would not warm all over to the same degree, therefore local climate conditions (of which there are) many might not warm at all, others might cool, others stay the same.

    Changes in climate take thousands of years. There is no data which shows any significant warming of Planet Earth outside a small gradual increase that has been going on for 10 000 years.

    Direct temperature of the oceans and the troposphere show a stable condition, with no significant increases in temperature. It cannot be the case that the near surface temperature is increasing with what’s above and below not showing any change. Thermodynamics requires a temperature gradient to exist with flow of heat from warmer to cooler to achieve equilibrium. The oceans and the troposphere should therefore be getting warmer if global warming ‘is happening’ as claimed – they are not; it isn’t. They are lying.

  5. The left are so wedded to their theory that “Climate Change” is causing a fall in production that they interpret FALLING prices as evidence that production is falling – and do not check to see that production is actually rising. Yet the people who write this absurd nonsense on Vox and other leftist outlets are well paid.

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