Mexico - 2023 Update

2023 marks Osito’s fifth year sourcing coffee in Mexico.  As with all producing countries, the hope is to scale our purchasing such that we are considered meaningful partners to the producers and exporters with whom we work.  Nowhere is that simple goal more difficult than in Mexico.  This is not to tease out some “grass is always greener” scenario because every country has its challenges, but what faces producers, buyers and logistics partners in Mexico is a unique mix of factors.

 

San Pedro Yosotatu, Sierra Mixteca
 
First, to give some context, Osito’s purchasing this year will focus on five distinct regions:

  • Amatenango de la Frontera, Chiapas – these represent our oldest relationships in the country.
  • The Sierra Mazateca, Oaxaca – home to some of the best coffees in Mexico but also home to, perhaps, the greatest obstacles.  Most prominent in the region are the towns of Eloxochitlán de Flores Magón, San Mateo Yoloxochitlán, Huautla de Jiménez and San Bartolomé Ayuautla.
  • The Sierra Mixteca, Oaxaca – our newest area of focus.  Our relationships are focused on the town of San Pedro Yosotatu.  This area has the same potential for high quality as the Mazateca but also the same devastating challenges.
  • The Sierra Sur, Oaxaca – here we are focused on San Francisco Ozolotepec as well as Santo Domingo Teojomulco, two staples on our menu for the last several years.
  • The Sierra Negra, Puebla – This is our second year buying coffee in Puebla and it’s largely regarded as the “next big thing” in Mexican specialty coffee.  Here we work primarily with an indigenous group of producers called Xánat in the town of Chiapa de Eloxochitlán. 

Each of these areas is remarkably distinct with differing cultures surrounding the production of coffee, but they face common problems.

  • Pricing is volatile and with volatility buyers look to save as many dollars as possible.  Many buyers have shifted volumes to large farms and processing facilities with lower costs (i.e. cheaper coffee) in Chiapas and Veracruz and look to Oaxaca only for small microlot offerings.
  • Access to education and training is quite limited.  In part this has to do with the challenges of working in very remote areas, but it is also due to significant language barriers in indigenous communities where Spanish is, at best, a second language and a simple lack of investment on the part of buyers who, generally, have more resources then the producers themselves.
  • Farm sizes in Oaxaca, especially, are very small with very little production per hectare.  Even in a good year, income from this kind of farm is not what anyone could call a livable wage.
  • Infrastructure is poor, thus dry parchment moves inefficiently from farm to warehouse and warehouse to port.
  • Finding manual labor has become extremely difficult.  At larger farms in Chiapas, we hear reports of cherry drying on the trees because there is no one to pick it.  Mass emigration to the USA and Canada continues as the cost and risks of the trip north are seen as preferable to the options available to them at home. 
  • Exchange rates have shifted in favor of the Mexican Peso against the USD in recent months but that actually makes coffee more expensive.  While Mexico is known for inexpensive FTO coffee, to do good work there, FTO premiums are not nearly enough.  Therefore, specialty coffee from Mexico is perceived as very expensive.  With the shift in currency rates, the “expensive” coffee will only be more expensive if farmgate prices are simply maintained at the same level of 2022.  This is a tightrope we walk every day.  Can we, in good conscience, pay less to producers simply to maintain sales?  Or do we bite the bullet, pay a price that is more equitable and then run the risk of demand drying up?

Santo Domingo Teojomulco, Sierra Sur

Enough of the bad news though…
 
            While we can talk at length about the problems that face Mexican specialty coffee, let’s turn the page and talk about what excites us.

  • Quality is as high as we have ever seen it.  From the larger farms of Chiapas to the tiniest coffee gardens of the Mazateca, quality is at unprecedented levels.  Most everything we are buying is 85.5pts and up with several microlots passing 87pts.   These coffees are moving quickly so we encourage putting lots under contract ASAP.
  • Our newest relationships in San Pedro Yosotatu (Oaxaca) and Chiapa de Eloxochitlán (Puebla) are very exciting.  Not only is quality high but the crucial actors involved in these supply chains are people we trust and are inspiring to work alongside.
  • For the first time, we feel as though most of our core relationships are very stable.  Relationships require constant attention and, inevitably, the strength of those relationships goes through peaks and valleys.  The health of these relationships very squarely rests on Osito’s ability to continue buying coffee at good prices and, in so doing, wade into some level of risk.  We recently got to spend some time in Santo Domingo Teojomulco (Oaxaca) with a group of producers we have been buying from since 2020.  We currently buy every single kilogram of coffee that they deliver to Oaxaca City but because of the pandemic and a backlog of necessary travel, we had not had the opportunity to visit Teojomulco until this year.  It was a short visit but it was filled with a positive energy that we hope can pervade and saturate the rest of our Mexico shipping season.  We met with the group’s leaders, Hildeberto and Eliel Román (father and son), and it was reiterated time again, just how much producers and Osito rely on one another and how relationship is paramount to anything else.