I’ve been in the coffee industry for almost ten years. For most of that time, very pompously, I had this idea that I had seen it all—I’ve been a barista, I’ve been a manager, I’ve trained people how to make coffee, I’ve written about coffee. But there’s a part of the industry that I really, really don’t know much about—how coffee is bought and sold. 

Coffee is in crisis. It’s been in crisis for years—the commodity market price of coffee hovers around a dollar per pound, which is significantly under the price it costs to grow and harvest coffee—and that’s not even taking into account seasonal dips in production or investment in infrastructure, let alone any sort of profit to actually pay the farmers and people who pick coffee. That’d be like a restaurant selling a plate of food and taking a loss on the labor of the cooks, the people who work in the restaurant, and the price that the food costs to begin with. 

We point to the commodity price of coffee a lot—it’s easy to find, you can google it, but what I wanted to understand is why this number matters. Where does it come from, and why is it so important? So I asked someone who I thought might know. 

Rachel Northrop is a freelance writer pursuing a PhD at the University of Miami. When we recorded this episode, she was working as the content manager for Ally Coffee, an importing company based in Greenville, South Carolina. Rachel, who lives in Miami, is a curious person, first and foremost. In 2012, she published a book called When Coffee Speaks, chronicling the stories of coffee workers in Central and South America. At the time, she had just left her job as a teacher in New York, and when she told the folks she was interviewing that she lived in New York, they asked her about coffee prices. Coffee is traded in New York, so what could she tell them? 

At the time, not a lot—but Rachel, being a curious reporter, decided to try to find out. And in a way, this has been a project of hers for the last eight years. Rachel is incredibly knowledgeable, and she explains so much about how coffee markets work, what prices mean that we had to break it up into two episodes. So you’re gonna hear part one, where Rachel talks about the history of the commodities exchange market and what it was meant to do. 

Something that Rachel clarifies is that her explanation of how markets work isn’t a defense of markets, or a claim of their moral value—which we get way more into in part two of this episode—but she notes that to understand why markets work the way they do, we have to understand why they were created, and perhaps contemplate that, for as ill-equipped as market prices are for valuing coffee at a fair price, we have to understand who markets were designed for before we can begin to break them apart. Here’s Rachel.