Like just about everyone else in the coffee world, I have been watching the market lately with more than a casual interest. I find my thoughts returning again and again to the f-word and its implications for the future of coffee quality.

No, not that f-word, although the market’s historic rally has undoubtedly wrangled that word from the lips of traders and buyers more than once in recent days. The f-word I am thinking of is less florid, not shocking on its own, but only when attached to other words like “dollar” and “market,” as in four-dollar market.

The first time I heard this term was just after the New Year in a conversation with someone very senior in the trading community who told me his team’s preparations for 2025 included scenario-planning for a four-dollar market.

I was impressed they had the vision to consider that the market’s historic rally in late 2024 – it had never gone that high for that long – could go even higher. I found myself thinking that it might be something to watch for in Q3 or Q4, and I could never have imagined that we would hit four-dollar mark less than a month later.

This extraordinary rally makes me wonder whether we will be using a different four-letter word by the end of the year: five. More importantly, it makes me worry about commitment to coffee quality at both ends of the coffee supply stream.

I have had the very good fortune in my career to work on both the buying and selling sides of the coffee trade. In both roles, I have experienced lesser rallies: I was working with growers during the market rally of 2011, the last time it broke the $3 mark, and I was sourcing green coffee during its more modest move into the $2.50s in 2022 against the backdrop of a pandemic-related logistics crisis. In both cases, high prices put coffee quality at risk. Or perhaps more precisely, they spelled trouble for commitment to trading relationships anchored in a mutual embrace of coffee quality among buyers and sellers.

For growers, high prices can lead to neglect of quality on the farm, picking indiscriminately and processing sloppily in a rush to bring coffee to market before prices fall. More importantly, it can lead producers to neglect relationships in the market, side-selling their coffee to intermediaries at today’s rates rather than delivering them against agreements with exporters or cooperatives fixed at lower rates weeks or months before. When side-selling happens at scale, it leads to contract defaults.

For buyers who have contracts with customers on the selling side but may not have formal commitments to their regular suppliers on the buying side, there is a similar temptation to move away from traditional suppliers in the search for lower prices, even if it means lower quality grades.

These behaviors are understandable on both sides, driven by uncertainty and need: sellers who see too few good markets and fear the rally won’t last rush to cash in before it ends; buyers who have commitments to customers and fear this rally will last seek ways to minimize the impact of historically high prices on their margins.

But these behaviors are also destructive: they undermine the trust that is built over time and undermine commitment to quality at a time when retail prices are likely to rise, meaning consumers may be paying more for less.

The literature on international development uses the term “negative coping strategies” to describe short-term approaches taken by poor families to survive shocks that undermine their long-term livelihoods. When negative coping strategies are adopted, it makes recovery from shocks that much harder since families must rebuild the assets depleted in the process just to get back to where they were before the shock. This conceptual framework may be relevant to this moment in coffee, as the current market has the potential to lure buyers and sellers of coffee into coping strategies that help them weather today’s storm but leave them more exposed to tomorrow’s.

This is the first significant market rally I have experienced in more than 20 years in which I am not working for an organization involved in the buying or selling of coffee, but that doesn’t mean I don’t have a professional stake in how things play out.

CQI has spent more than 20 years enabling the trade in quality-differentiated coffee: working to improve the quality of coffee, foster a common language of quality, and help producers develop trading relationships that allow them to turn improvements in coffee quality into better outcomes for themselves and their families. During that time, we have helped to develop — then support through ongoing training, testing, and certification in cupping and post-harvest processing — many of the relationships that underpin the trade in quality coffee. A resort to negative coping strategies by buyers, sellers, or both, puts the work we have done together with so many of you at risk in ways that would be a setback for the entire sector.

By privileging the relationships that have helped all of us deliver so much value and hedge so much risk over the years, we can minimize the disruption of this moment and the amount of work we need to do together to rebuild the systems that create quality and bring it to market.

If we don’t, there is a chance we will be using a that f-word when we look back on how we handled this market.

By: Michael Sheridan, CEO Coffee Quality Institute (CQI)