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By Robert Rapier on Sep 28, 2010 with 58 responses

Have We Hit Peak Coffee?

Tags: peak oil, satire

The following is a guest essay authored by R-Squared regular Paul Nash. (Credit to Ronald Steenblik for the “Carter-Reagan Parallel” portion.)

Have We Hit Peak Coffee?

There is continued debate about whether the world will soon hit “Peak Coffee,” with some commentators saying it has already been reached. Analysts point to fast rising demand from China and India as the culprit for the current strain on world markets.

The International Coffee Organization (not to be confused with OCEC — the Organization of Coffee Exporting Countries), dominated by Brazil (the “Brazil” of coffee), Colombia and Costa Rica, moved to assure world markets that they had plenty of “spare capacity,” and that coffee was trading in an “acceptable” price range. This has done little to allay fears around the world that Peak Coffee and subsequent high prices will lead to a shortage and plunge the world into a coffee deprived depression.

Regional Instability and Embargoes

Analysts have pointed out that America’s economy “runs on coffee” and that leaves it exposed to supplies from unstable parts of the world. Meanwhile, fingers are pointed at Big Coffee (Maxwell House, Folgers, NesCafe), with complaints about “windfall profits.”

Coffee prices have shot up and are nearing the record levels, last seen in the early 90′s during the ICO coffee embargo. This happened from an incident in the 1994 Soccer World Cup, in a match between Colombia and the USA, when the Colombian goalie let in an own goal. There was speculation that this was the result of clandestine work by the CIA, attempting to show the Colombian government who was boss. On his return home the Colombian goalie was assassinated, leading to riots. This destabilized the entire Latin America region, home to three quarters of the world’s exportable coffee. The ICO imposed a coffee embargo, which cause widespread panic in the US, leading to coffee hoarding and long lineups at Starbucks.

The situation was so severe that (then president) Clinton had to intervene to defuse the situation. He pledged to break America’s “addiction” to coffee, and started government programs to find alternatives. This lead to things like “unleaded coffee” and also experiments in “bio-coffee” and coffee from algae. Unfortunately these programs were, ultimately, unsuccessful and America’s dependence on imported coffee has only increased in the decade since.

America’s never ending thirst for coffee, and the environmental impact of it, was highlighted by the “Juan Valdeez” incident, where a truck carrying coffee ran aground in Puget Sound en route to a west coast roastery. The coffee spill lead to thousands of sleepless birds and fish, and the environmental impacts of the botched cleanup still linger today, with the water often being brown after a storm exposes fresh coffee.

Price Spikes and the Growing Calls for Alternative Coffees

The price of coffee has risen steadily since 2002, with the benchmark for Arabica coffee topping 100c/lb. Retail prices peaked in 2008 at over $4/cup. It was widely believed that high coffee prices were a factor in the 2008 presidential election. During the campaign John McCain suggested a “summer coffee tax holiday” while Obama talked about a “windfall tax” on coffee companies. Prices have since retreated back to about $3/cup, but the population remembers the pain, and no politician wants to be remembered for seeing $4 or $5 coffee “on their watch”.

According to alternative coffee advocates, "Soccer Moms" and their addiction to SUB's brewed by the "Big Three" are to blame for the recent trends.

Part of the blame is widely laid at the feet of the “Big Three”: Starbucks, Peets, and Tim Hortons, who, over the last two decades have produced ever larger “pick up coffees” and luxury SUB’s (Sexy Urban Blends, like caramel macchiatos), instead of making small, efficient, European style coffees. Even the imported Espresso gets super sized and relabeled the “Americano” for the US market.

Under government pressure, the Big Three have committed to doing research on “hybrid” and “eclectic” coffees, but many see this as them just paying lip service while they continue to sell grande sized caramel macchiatos. Others point to the widespread use of diesel coffee in Europe, which dramatically reduces coffee consumption, but the Big Three have steadfastly refused to introduce it here. Despite being the darlings of the west coast treehuggers and movie stars, hybrid coffees are yet to catch on, and eclectics, which don’t use any coffee at all, are an unknown quantity in the market – it is feared that customers will suffer “caffeine anxiety” and not buy them.

Meanwhile, the Obama administration has funded a number of alternative coffee programs, including bio-coffee, corn coffee, coal-to-coffee, even waste-to-coffee, and others. These XTC programs have been widely criticized as a waste of money, as they can’t scale up and the CROCI (Caffeine Returned On Caffeine Invested) is barely greater than 1.

The Carter-Reagan Parallel

Which reminds us, of course, of that fateful evening, on July 15, 1979, when President Jimmy Carter appeared on national television to outline his plans to address the coffee crisis and improve the efficiency with which Americans brewed the stuff.

In the months preceding his speech, coffee prices had briefly dipped to below $1.50 per pound, but by July 1979 were well on their way up to $2. During what would later be called his “Crisis of Confidence” speech (sometimes known as the “Malaise” speech), Carter encouraged his fellow citizens to do what they could to reduce their consumption of coffee. He announced that he had already imposed coffee rationing on White House staff, and had issued an executive order to subsidize a rapid expansion in the cultivation of chicory root, a home-grown alternative to coffee. Carter seemed poised to announce other new policies, but fell asleep in his chair before he could finish his speech.

Carter’s coffee-conservation policies were later over-turned by President Ronald Reagan, whose 1984 campaign slogan was “It’s morning again in America!” – a subtle reference to the fact that, under his watch, coffee prices had fallen and apparently stabilized at around $1.50 per pound, so people had gone back to their normal early morning routine of drinking prodigious amounts of java at breakfast. In an ironic twist, shortly after Reagan was sworn into office for his second term, coffee prices zoomed back up to $3 per pound.

Birth of the Tea Party

The backlash against Obama and his coffee policies, have spawned a new political movement, the Tea Party, which has its slogan of “Brew, baby, Brew.” They have, paradoxically, pledged to do more to find domestic sources of coffee, pledging to open up the Arctic for coffee exploration, though there is debate as to whether there actually is any coffee there.

Meanwhile the world is running out of new sources of coffee, and unconventional coffee, such as the Venezuelan Coffee Sands, are increasingly being exploited, though many in America reject this as “sludge.” America remains as addicted to coffee as ever, but with the world’s growing population wanting an Americano lifestyle, international competition for coffee will only increase. If the Peak Coffee theorists are right, one day America will wake up to no coffee, and predictions of the consequences range from mild anger to the “Mad Maxwell” scenario.

Only time will tell…

  1. By OD on September 28, 2010 at 12:31 pm

    Love this. The humor is quite good. Good job Paul!

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  2. By russ-finley on September 28, 2010 at 12:42 pm

    The SUC (sport utility cup)

    We need to learn from the Brazilian example. If they can be completely coffee independent, so can we! I’m tired of being held hostage by cultures I don’t know anything about …sip.

     

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  3. By Benny BND Cole on September 28, 2010 at 1:07 pm

    Tea! Tea! Tea! Tea! Tea!

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  4. By rrapier on September 28, 2010 at 1:12 pm

    Tea! Tea! Tea! Tea! Tea!

    A transition to tea is highly unlikely. Maybe we will see some tea penetration, but there just isn’t enough to displace our coffee consumption. Besides, tea prices will go through the roof as coffee drinkers flock to tea to get their cheap caffeine fix.

    RR

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  5. By savro on September 28, 2010 at 1:17 pm

    Robert Rapier said:

    A transition to tea is highly unlikely. Maybe we will see some tea penetration, but there just isn’t enough to displace our coffee consumption. Besides, tea prices will go through the roof as coffee drinkers flock to tea to get their cheap caffeine fix.

    RR


     

    RR just earned a spot on the Top 10 Enemies of Tea list.

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  6. By ronald-steenblik on September 28, 2010 at 1:22 pm

    America’s true addiction.

     

    Or, as the lady says (tying it all together) …

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  7. By Craig on September 28, 2010 at 1:54 pm

    I agree with Sam, RR, you are obviously a tea hater. I hope the tea lobby does not relent until you change your seriously wicked views!
    I personally have been involved with algae to tea production for over 20 years and can attest to how efficient a process it is and how it can replace coffee. Factoring in its lower heating value I can produce and order of magnitude more tea per acre in my algae ponds than coffee ever could.

    This is my first public acknowledgement of this great discovery I’ve been keeping to myself for over 20 years. If you’d like more info please email me at algaetotea@coffeesucks.com

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  8. By rrapier on September 28, 2010 at 1:58 pm

    I agree with Sam, RR, you are obviously a tea hater. I hope the tea lobby does not relent until you change your seriously wicked views!

    Just being a realist, Craig. Hey, I like the occasional sip of tea myself, but do you realize how dependent those tea producers are on coffee? The grower wakes up and has a cup of coffee, the guys working in the tea warehouses, the truck drivers hauling tea around, and the retailers where tea is sold — all fueled largely by coffee.

    I think it’s likely that the end of coffee will mean the end of tea.

    RR

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  9. By savro on September 28, 2010 at 2:08 pm

    One other important factor here is the disparity in BCU (British Caffeine Units) content between tea and coffee.

    And in the Tea industry alone, the U.S. has a long way to go in catching up to the BCU of imported brands, which have a 50% higher BCU. How long until the U.S. Tea Lobby calls for an import tariff?

     

    Beverage (8-oz or as noted) milligrams
    Starbucks Grande Coffee (16 oz) 330
    Coffee, Drip 115-175
    Starbucks Grande Latte (16 oz) 150
    Dunkin’ Donuts Coffee (16 oz) 143
    Coffee, Brewed 80-135
    McDonald’s Coffee (small) 100
    Coffee, Espresso (2 ounces) 100
    Coffee, Instant 65-100
    Tea, iced 47
    Tea, brewed, imported brands (avg.) 60
    Tea, brewed, U.S. brands (avg.) 40
    Tea, instant 30
    Tea, green 15
    Hot cocoa 14
    Starbucks Grande Decaf Latte (16 oz) 13
    Chocolate Milk (8 oz) 5
    Coffee, Decaf, brewed 3-4
    Coffee, Decaf, instant 2-3

    SOURCES: National Soft Drink Association, US Food and Drug Administration, Bunker and McWilliams, Pepsi, Slim-Fast.

    http://wilstar.com/caffeine.htm

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  10. By paul-n on September 28, 2010 at 2:18 pm

    I think we need to face the reality that tea is just not an efficient replacement for coffee.  It has only 2/3 the “caffeine density” of coffee.  Tea (black tea) requires an inefficient batch fermentation process and energy intensive drying before it can be shipped.  And tea can;t be mixed into conventional coffee pipelines, requiring a separate distribution system.

    The  government, and the Tea Party  have tried to promote T85 as a substitute for coffee, but sales have been slow, and it is not widely available.  The government is going to subsidise “blender cups” but at $100k each, this is an expensive process.

    Meanwhile the Tea Party is seeking a wide mandate for tea, pushing to raise the “blend wall” from T10 to T15.

    Not surprisingly, coffee purists reject the scheme entirely, and are flocking to places that advertise “100% Tea-Free coffee”

     

    No word yet about the future of the PEET subsidy…

     

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  11. By Perry on September 28, 2010 at 2:41 pm

    Those of us who drink it by the pot will be exempt from the coffee guzzler tax, right? CAFE standards should only apply to the cute little expressos.

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  12. By Craig on September 28, 2010 at 2:56 pm

    RR said: “The grower wakes up and has a cup of coffee, the guys working in the tea warehouses, the truck drivers hauling tea around, and the retailers where tea is sold — all fueled largely by coffee.”

    Damn RR, you figured out the trick we use here at algae to tea ponds, coffee is the only way to fuel things. Using an equivalent amount of BCU’s in our tea consumption means we spend more time in the watering the bushes than in the ponds helping the algae grow. However, we are exploring the benefits of closing the loop on that ‘waste’ stream in our production, then watch out…..our output is expected to rise another order of magnitude.

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  13. By savro on September 28, 2010 at 2:59 pm

    Paul N said:

    The  government, and the Tea Party  have tried to promote T85 as a substitute for coffee, but sales have been slow, and it is not widely available.  The government is going to subsidise “blender cups” but at $100k each, this is an expensive process.

    Meanwhile the Tea Party is seeking a wide mandate for tea, pushing to raise the “blend wall” from T10 to T15


     

    The Tea Party should be promoting the use of T85 in Hawaii and the Southeastern U.S. instead of lobbying for an increase in the blend wall across the country. Use the resources close to home.

    And as Wendell would say, if the farmers themselves are addicted to coffee and refuse to run on tea, how can the Tea Party have the hypocrisy of telling us how good it is to switch to tea?

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  14. By Rufus on September 28, 2010 at 3:32 pm

    You people do realize that RR used to (?) work for Folgers, right? And that Paul N. is a paid lobbyist/blogger for Starbucks?

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  15. By paul-n on September 28, 2010 at 3:37 pm

    Perry, the CAFE standards are a joke in both name and intent.  It is merely an excuse for the Big Three and Big Coffee to game the system.  The quality of their CAFEs does not even come close to matching European standards.

    Starbucks has been promoting tea for several years now, but it is just an excuse to get the “greenies” in their CAFE’s.  Worse still, they mostly sell tea in large pick up cups and SUB’s (the Chai Creme Frappucino) , so they are using just as much tea as they did coffee.  

    Using an alternative caffeine (tea) in large cups misses the point – we need to reduce the country’s caffeine use.  

    We should be having small tea, like the Japanese style.

    And there is no hard evidence that using tea has displaced coffee.  Overall coffee consumption has continued to increase, as has coffee imports.

    Brazil has CAFE’s that run on T100, or any blend to T20, and claim a much better CROCI for their tea industry than the US tea industry, but that is because they use more manual labor.  And despite their efforts with tea, Brazil produces and uses more coffee than ever.

    The US tea industry is planning to export tea to Brazil, and their is even talk of a tea pipeline to the east coast to facilitate this. Currently tea is shipped in bags, but this very inefficient.  But exporting (subsidised) tea to Brazil, when when we are trying to displace coffee imports is just silly.

    We need to become coffee independent, but to do that with tea would require vast swaths of farmland, and would displace food production.  

    The tea industry is talking about “cellulosic” tea, which they claim would not compete with food production, but to date, they have been unsuccessful.  It has been known for a century how to produce cellulosic tea, but there remains an unsolved problem – it tastes like cardboard!

    Ultimately, we will need a coffee tax, or coffee rationing, to make a serious dent in consumption, but that is politically unacceptable. Coffee has become part of the American way of life that, in the words of Dick Cheney, is “not negotiable”.  Anyone who has delayed the line at Starbucks in the morning know this first hand!

     

     

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  16. By paul-n on September 28, 2010 at 3:42 pm

    Rufus – come out and admit it – you are a shill for the (cellulosic) tea industry!

    Next thing you are going to be telling us that the new Starbucks Regal gets the same caffeine/cup on tea as it does on coffee.  

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  17. By Rufus on September 28, 2010 at 4:24 pm

    Paul, I’m back to working on my T-Still.

    With the end of the Tea Blender’s Credit the cost of Coffee, and Tea are going up, and T85 is looking pretty much T-Boned.

    Looks like “Kudzu Tea” in My future.

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  18. By Rufus on September 28, 2010 at 4:33 pm

    Of course, the Windmill guys say Tea, and Coffee are, Both, dead.

    They’re planning on giving us a “Volt-jolt” every night; and they say that will keep us “wired” all day. I don’t know. Seems dubious to me, but, hey, I’m an old “liquids in the Mornin’” guy; what do I know.

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  19. By mac on September 28, 2010 at 4:43 pm

    One e day I was “gently” sipping my coffee because I knew knew coffee was scarce when sudden;y. out of the blue a creature appeared, fearsome and with great power.

    I asked his name and he simply said “Teknocrat”

    I said what do you want and he cried in a loud voice”

    “”I want whatever you paid for that drink in taxes.”

    By what authority do you do this to me I asked,.

    Then he thundered “I went to college for seven years.”

    That tipped me off. This guy is a paper tiger. So when I git tired of listening to this yokel, I went home.

    The coffee bar closed soon thereafter,

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  20. By Brent on September 28, 2010 at 4:54 pm

    Is the start of T-85 the first step in the evolution of the T-1000?

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  21. By Perry on September 28, 2010 at 5:04 pm

    Typical liberal scare-mongerers. Create a crisis and expect me to change. My coffee pot works just fine. Engineers responded to my needs in fine fashion. It gets a cup per teaspoon of coffee and will last forever.

    As long as Folgers magically appears on store shelves, all is well with the world.

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  22. By mac on September 28, 2010 at 6:12 pm

    I chose “C” every time . just like the professor said,

    It worked: I got a degree in “Coffee Culture:”

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  23. By Kevin Kane on September 28, 2010 at 9:34 pm

    I like my high British Thermal Caffeine-content coffee, and have no intention to seek substitutes. Sorry! I will simply be a Caffeine guzzler till I die.

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  24. By mac on September 29, 2010 at 12:34 am

    The coffee people ran out of coffee one day so they started a new brand called CTL coffee (Coffee to Lunacy )

    It was, of course, much more expensive than regular coffee but that didn’t matter to the addicts who lined the streets to get just one drop of this magic
    elixir.

    Competition, however soon sprung up called BTL, but they couldn’t make enough of the “black stuff” to satisfy the public”s voracious appetite and soon went out of business..

    So,. everybody just went home and plugged their coffee cups into the wall socket in their garage and watched a bad movie called “Peak Oil:” by Thomas Friedman,.

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  25. By Perry on September 29, 2010 at 4:24 am

    The military has decided it needs to be oil free by 2040. An Abrams tank gets .6 MPG. It has a 500-gallon tank. It uses 60 gallons of fuel per hour at top speeds. 30 gallons per hour in piddle fart mode. I’m not sure ethanol would work well in an Abrams. Butanol maybe?

    http://www.treehugger.com/file…..y-2040.php

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  26. By takchess on September 29, 2010 at 6:47 am

    This headline concerned me more that any other that I read here 8), Nicely written Paul.

     

    A number of years ago, I remember reading that General Foods (?) created a super size coffee plantation out in Viet Nam, They grow Robusta (lower quality) vs Arabica because the plants mature in 7 vs 14 years.  (unsure if I hit the years right). There is a surplus of crappy coffee out there.

     

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  27. By ronald-steenblik on September 29, 2010 at 7:40 am

    Takchess’s comment reminds me that, missing from this discussion so far is an acknowledgement of the widely different feedstocks used for tea (coffee only has two: Arabica and Roubusta), and their different environmental and social footprints.

    Tea made from waste products, such as old shoe leather, has a low environmental and social impact. The only energy inputs are at the final use stage — to boil the water — but even then the input energy may simply displace the heat that would otherwise be needed to keep a person warm.

    Some other teas, such as from rose hips, are similarly byproducts of agriculture that takes place for other purposes, such as ornamental horticulture.

    The bulk of the world’s tea, however, is produced from Camellia sinensis, usually on large, monocrop plantations, and often involving child labor. Sustainability standards are attempting to improve the performance of tea growers, but they have a lot of ground to cover.

    One of the arguments tea drinkers use for promoting their beverage over others is its purported low carbon footprint, which is typically given as around 20 g of CO2 per cup, compared with 129 g for a cup of Coca Cola, 225 g for a cup of cow’s milk, and a whopping 374 g for a cup of beer (who drinks beer out of a cup?!). Yet tea’s life-cycle carbon emissions can vary greatly, from as low as -6g CO2 per cup (assuming carbon sequestration takes place on the plantation) to over 200g CO2 per cup, depending on how the tea is grown, processed, shipped, packaged, brewed, and discarded. Even if one takes the low value, however, given that many people drink their tea blended with milk, the average carbon emissions associated with consuming tea are likely much greater than 20 g per cup. Consuming pure tea (also known as T100) yields a lower carbon footprint, but is corrosive.

    Meanwhile, some companies are trying to argue that their tea production is “carbon neutral“, through such accounting tricks as buying carbon offsets.

    At the end of the day, there is only one answer: cold water. And, if you want an extra jolt, hook yourself up to a solar panel. But best not to imbibe too much, too quickly, or you’ll end up with “the shakes”.

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  28. By KODE on September 29, 2010 at 8:45 am

    Ha ha ha! Very funny.

    It is even more funny if you are aware of this gem:

    “An Essay On Tea” by Jonas Hanway, printed in 1757 (downloadable from http://www.archive.org/details…..EssayOnTea ).

    (Note that your coffee is Hanway’s tea)

    It’s a rather longish rant, but very a propos. A few excerpts:

    On the balance of trade:

    You are further to take notice that the balance [of trade], just mentioned, has centered with individuals, and consequently they are become rich; but the public expenses have, in a great measure, drained us of those riches, insomuch that the greatest part of many years accumulation of property, now consists in a debt, due to those individuals, from the public.
    [...]
    According to the present establishment of things in this nation, the first and most essential article is the preservation of the public credit; for, by means of this, the state may command every thing it has occasion for, that is saleable, as far as the credit goes. But it is still supposed the public is able to repay whatever it borrows
    [...]
    Let us therefore freely enquire, if we can bear so great an exportation of gold and silver as has been made from hence, for some years past; and whether we are not in danger of becoming too much drained?

    (p. 157 f)

    On substitutes:

    Various are the herbs, of which the skilful botanist can best inform you, taken as pectorals, or to warm or cool the body, simple or compounded : it is indubitable that we have many which make very wholesome liquors such as the physician is not able to dispute their good qualities ; and amidst such variety of infusions, we might be allowed to drink some for pleasure, as far as nature allows of such pleasure, and for health also. This would destroy all temptation to adhere to tea with such an absurd, and vicious constancy, as I fear will ruin us in the issue.

    (p. 230)

    And a bit of social commentary:

    It is the curse of this nation, that the laborer and mechanic will ape the lord; and therefore I can discover no way of abolishing the use of tea, unless it be done by the irresistible force of example. It is an epidemical disease; if any seeds of it remain it will engender an universal infection. To what a height of folly must a nation be arrived, when the common people are not satisfied with wholesome food at home, but must go to the remotest region to please a vicious palate!

    (p.272)

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  29. By KODE on September 29, 2010 at 9:27 am

    I learned of Hanway’s “essay” through Marek Kohn’s book “Narcomania – On Heroin”. Kohn writes

    The consequences of the bullion drain are a matter for argument, but as far as the facts were concerned, Hanway was right. Nor was he the only person to have noted the China trade imbalance with alarm. [...] Although willing enough to take silver, China did not particularly need anything Europe had to offer, so the enthusiasm with which the British took to tea put their country at an instant disadvantage. Worse, tea was not like iron, for instance, a raw material to be fashioned by manufacture and thereby gain in value. A commodity had to be found to turn the tables of trade. It duly was, and it was opium.

    The rest is (also) history: Opium Wars

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  30. By russ-finley on September 29, 2010 at 11:17 am

    Interesting links, Ronald and KODE. The parallels are as interesting as they are entertaining.

    I believe coffee was once called the “poor man’s breakfast” because mine workers would drink it to suppress their hunger before going off to work.

    As I sit here, coffee cup in hand, I realize that it’s a matter of scale. Coffee and tea plantations actually do destroy a great deal of biodiversity. Starbucks sells a shade grown version that is supposed to be less destructive. It’s amazing that this cup of brown tainted water can have such a large impact when multiplied by 7 billion human beings. Imagine the impact of trying to fuel our cars with the planet’s flora.

     

     

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  31. By paul-n on September 29, 2010 at 12:15 pm

    Imagine the impact of trying to fuel our cars with the planet’s flora.

    Russ, that’s just crazy talk – now where did you get the idea of vehicles and flora from? 

     

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  32. By rrapier on September 29, 2010 at 12:42 pm

    By the way, it wasn’t planned this way (unless Paul knew this), but today is National Coffee Day.

    RR

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  33. By russ-finley on September 29, 2010 at 1:04 pm

    Russ, that’s just crazy talk – now where did you get the idea of vehicles and flora from? 

    I said “fuel our cars” with flora.  Don’t get me started. A Chia Pet car may be green, but you would have to water and fertilize them, exacerbating the Gulf of Mexico dead zone, and their value as wildlife habitat is marginal.

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  34. By paul-n on September 29, 2010 at 1:47 pm

    No I did not know it is National Coffee day – sounds like a Starbucks invention though.

    Russ – I have to say I have seen quite some wildlife inhabiting those sorts of vans.  That doesn’t mean they are making an improvement to the gene pool though.

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  35. By ronald-steenblik on September 29, 2010 at 1:53 pm

    At one time I owned an old, rusty 1980 Datsun 280-Z. Because it was rusty, I hardly ever bothered to wash it. Eventually dust and dirt collected in the roof gutters, and in that micro-ecosystem a healthy crop of moss eventually took root and flourished.

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  36. By russ-finley on September 29, 2010 at 2:12 pm

    Moss tends to take root on anything that holds still long enough here in Seattle.

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  37. By mac on September 29, 2010 at 3:03 pm

    Coffee is the second most traded commodity in the world, surpassed only by oil.

    Apparently, it has something to do with the color black.

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  38. By Kit P on September 29, 2010 at 5:58 pm

    I chose “C” every time . just like the professor said,

     

     

    When in doubt Charlie out!

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  39. By PeteS on September 29, 2010 at 10:35 pm

    Pardon the newbie question — which is the most reliable benchmark, and why the disparity in price, between Texas Tea and Brent Brewed?

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  40. By paul-n on September 29, 2010 at 11:04 pm

    Of course, tea was once the most traded commodity, in the 19th century.  they even built a special fleet of ships to transport it from the East to the West;

     

    The Cutty Sark, built 1868.  Top Speed 17 knots.  

    Britain had recognised that it was “addicted” to imported tea as far back as the 18th century.   They passed the “Tea Act” in 1773 which gave a domestic “tea tax holiday” (where did that idea show up again?) but retained the tax in the American colony.  No one, of course, is ever happy about paying tax at the cup and there was much dissent in America, forcing Britain to deploy troops half a world away in order to protect its tea trade.

    But the locals had other ideas, and an insurgency ensued.   The tea ships and port terminals made prime terrorist targets;

    (Boston Harbour, 1773)

    Ultimately, Britain’s efforts were unsuccessful, and the insurgency outlasted the occupiers.  After years of war, Britain eventually had to pull out, conceding that you can’t control a country that is half a world away.

    Tea remained the world’s primary caffeine source into the 20th century.  But alas, tea had to be handled in bags, and was black and dusty.  In the 1920′s, it was superseded by coffee, which is almost as black and far less dusty, and could be piped instead of being bagged.  The tea ships dissappeared, and now all ships carry coffee.  Tea is still used, of course, but has been displaced as the world’s primary caffeine source by coffee.

    Tea could be used directly, but coffee has to be refined, a process of roasting, then grinding, and finally hydrocracking with high temperature steam.  The resulting product is much more caffeine dense than tea, easier to store and handle, and is now the caffeine source in all US automobiles.

    In some parts of the world where environmental regulations are lax, such as China and India, tea remains the primary, and fastest growing, caffeine source.  

    There has been some concern over worldwide caffeine emissions leading to “global wakening”, where no animals are able to get to sleep from too much caffeine in the environment.  This led to the Kyoto protocol in 1997, which called for developed nations to cut their caffeine addictions (er, emissions) by 20% by 2010.  But developing nations were not subject to the the same restrictions.  The predictable result is that tea and coffee production in developing nations has increased dramatically.

    Western nations objected to having to cap their cups while the developing world could increase theirs, and so the Kyoto protocol achieved little.  

    The UN Intergovernmental Panel on Caffeine Change (IPCC) has tried to prove that caffeine levels are increasing, but were discredited when secret emails were leaked showing that some scientists had used double shot espressos to fudge the numbers to make the situation look worse than it is.

    A second attempt was made to rescue the planet from “Caffeine Change” in Copenhagen in 2009, but this too was unsuccessful, primarily because the coffee guzzling Americans wanted China to reduce their tea usage, and China, naturally, refused to do so, claiming they had a right to use their own tea.  China  pointed out that their per capita caffeine usage was way below US levels, though was higher in total.  

    This dispute remains unresolved, and global caffeine change, and peak coffee, remains a source of much discussion at coffee shops and tea houses around the world.  This has given rise to continuing specualtion that it is a conspiracy by Big Coffee to create fears of shortages, and keep world prices high.

    The coffee industry, of course, denies everything.

     

     

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  41. By rrapier on September 30, 2010 at 11:20 pm

    PeteS said:

    Pardon the newbie question — which is the most reliable benchmark, and why the disparity in price, between Texas Tea and Brent Brewed?


     

    I don’t think they drink tea in Texas, so I would go with the Brent. You know the Brits like their tea.

    RR

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  42. By Wendell Mercantile on October 1, 2010 at 12:19 pm

    Realistically, the “peak concept” applies to every commodity — whether tea, lithium, neodymium, coffee beans, or water. (Even “Peak Ethanol” Rufus.)

    The peak that will probably bite us in the rear the soonest is “Peak Water.” I live in an area where we are lucky to have abundant fresh water stored in the Great Lakes — a resource that many western states are already eyeballing as a solution to their imminent water problems*, and something which the governors of the Great Lake states and Canadian provinces surrounding the Great Lakes have already signed a compact to prevent.
    ________________
    * There are proposals out there to build pipelines carrying Great Lakes water to the west and southwest.

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  43. By Maja on October 15, 2010 at 2:01 am

    I have never seen so much rubbish on one single site, there is hadly any single part of the story which is correct or even remotely based on the actual history of coffee, and there is even less of all the points in the comments here on the forum in which anyone is getting anything right. How sad to see so many people rambling on about a subject they so clearly know nothing about. The only thing you will gain by any change to the current coffee consumption patterns are throwing the 600 million people worldwide who depend on coffee production for their daily survival into even deeper poverty than they are already living in – and they are all already included among the poorest of the world. And at the same time you would kill off about the only agricultural crop that is actually grown in harmony with nature and helps provide the only bufferzone left today between existing rain forest and urban areas across the developing world. Shame on you all for rambling on like this without even bothering to check the facts first. Even trying to list the hundreds of false statements here would be too time-consuming, but I can suggest you search for proper writings about the subject written by people who actually know what coffee is or is not, there are thousands of links easily found on yahoo or google.

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  44. By Kit P on October 15, 2010 at 10:09 am

    Maja I learned about
    three kinds of leadership in the navy. Those that make things, those
    who watch things happen, and ‘hey dude what’s happening, it looks
    like the ship is getting underway’.

     

    This is a spoof,
    humor, people being funny. It is a little bit of an inside joke for
    those who post here. However, I warned Paul this would happen. Maja
    most likely lives in California and has requested an emergency
    meeting at her local town council to act on this crisis. Someplace
    like Santa Cruz or Santa Barbara..

     

    Pretty soon there
    will be a statewide consensus of what to do about peak coffee
    ignoring that California is the leader in drive through coffee
    places. California will have many programs to address issue.
    California EPA will regulate the slope of the drive through so
    drivers will be required to turn off their engines and let the cars
    roll up to the order booth.

     

    The speaker of the
    house then want national legislation even if it means not getting
    other important duties of congress done. George Soros will pay for
    attack blaming Bush for not having the foresight to solve the problem
    ignoring that Bush was from Texas and did a great job of promoting
    Papa Joe’s Baby Back Rims.

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  45. By paul-n on October 16, 2010 at 12:22 am

    Yep, you did warn me I was playing with fire – now California will burn to the ground(s)!

     

    California EPA will regulate the slope of the drive through so
    drivers will be required to turn off their engines and let the cars
    roll up to the order booth.

    There was actually some (mercifully brief) talk within the City of Vancouver on this idea!  California is not the only place that thinks the answer to everything is more regulation, but they are the masters of it.

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  46. By ronald-steenblik on October 18, 2010 at 9:48 am

    The funny thing is, I can’t tell whether Maja’s comment is itself a spoof or not. If it is, it’s a darn good one. It sounds so genuine!

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  47. By greg on October 18, 2010 at 3:11 pm

    I know it’s satire, but you at least have to pretend for a level of credibility to keep up the ruse!
    Andrés Escobar was not a goalie. He was the team captain and a defender:
    http://en.wikipedia.org/wiki/A…..9s_Escobar

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  48. By savro on October 18, 2010 at 3:28 pm

    I was thinking of placing a “Warning: Satire” mention somewhere in the post, but then I figured, “If you can’t realize it on your own, you’ve only got yourself to blame.” Besides, half the fun is for the many to watch the few who swallow it whole. Laugh

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  49. By paul-n on October 18, 2010 at 3:32 pm

    Greg, I stand corrected about Escobar.  I had always thought it was the goalie, but I guess then it is not an “own goal”.  Still, quite a tragedy and was shocking at the time .

     

    Nice graphic Sam – they could use those same signs for the next time some politician is in a motorcade!

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  50. By Kit P on October 18, 2010 at 7:20 pm

    “Nice graphic Sam
    – they could use those same signs for the next time some politician
    is in a motorcade!”

     

    Paul your are wrong
    again! There is nothing funny about those narrow loads.

     

    Some of you will
    think it is ‘photo shopped’ but those are the placards using when
    moving wind turbines parts in Eastern Washington State. The joke
    being on California rate payers.

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  51. By ronald-steenblik on November 1, 2010 at 1:19 pm

    I was wondering what was happening in the coffee market. The news continues to be worrying:

    Cameroon’s farm-gate arabica coffee price increased 0.5 percent in the week through Oct. 31, an official from the North West Cooperative Association said.

    0.5% per week is almost 30% per annum on a compound basis!! Stock up now!

    Meanwhile, this news item shows how dangerous dependence on “liquid energy” can be:

    A pile of smoldering coffee filters turned into a fire at a Dunkin Donuts restaurant in Batavia Sunday night. Firefighters said they were called to the Dunkin Donuts at 2002 W. Wilson St. at about 8 p.m. Sunday for a report of boxes on fire inside the restaurant. Firefighters said they found smoke in the building and a sprinkler head activated in the rear of the store. Fire companies shut down the sprinkler system, ventilated the structure, and checked exposures. The fire began when an employee at the shop placed coffee filters on top of the coffee warmer, firefighters said. When the filters started to smolder, the employee put them into a waste basket and put the basket into garbage boxes stored near the rear exit.

    Of course, the filters could have just as easily contained tea leaves.

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  52. By ronald-steenblik on November 1, 2010 at 2:18 pm

    Life imitates art? I’m not making this up. From “Coffee Drinkers Beware: Colombia Says “Peak Coffee” is Near“:

    Colombia is the world’s third largest producer of coffee and, according to Bloomberg News, a growers group in the country now says that there will be less coffee produced than is desired next year. Oddly, while there will be a probable international surplus of 6-7 million bags this year, the extra supply will soon be made irrelevant by a 10 million bag deficit next year.

    Remember, you read about it first here on the on R-squared blog.

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  53. By savro on November 1, 2010 at 3:02 pm

    Ronald Steenblik said:

    Remember, you read about it first here on the on R-squared blog.


     

    1 Mississippi, 2 Mississippi, 3 Mississippi…

    2008… 2009… 2010

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  54. By ronald-steenblik on November 1, 2010 at 3:42 pm

    Whoops. Thanks, Sam. Hadn’t noticed that the article on the Colombian shortfall dates from October 2008. So that means that we survived?

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  55. By savro on November 1, 2010 at 4:03 pm

    Ronald Steenblik said:

    Whoops. Thanks, Sam. Hadn’t noticed that the article on the Colombian shortfall dates from October 2008. So that means that we survived?


     

    Well… with the recent discoveries of heavy coffee deposits in the coffee sands, some say that Peak Coffee is a worry no more. Peak Coffee theorists, however, contend that it’s just delaying the inevitable.

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  56. By paul-n on November 1, 2010 at 4:52 pm

    “Heavy coffee from the coffee sands” – that must be what Starbucks uses!

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  57. By paul-n on March 29, 2011 at 2:32 am
     

    Well, what started out as a (partly) tongue in cheek thought exercise may yet become reality.  An article was published in the  New York Times, 9th March, 2011, titled “Heat Damages Colombia Coffee, Raising Prices“.  The article looks at recent weather trends and events that have hampered coffee production, including unseasonal rainfalls, temperature fluctuations, crop diseases, etc.  The article sounds eerily familiar…

    Then (what I wrote in Sep 2010) – Colombia and Costa Rica, moved to assure world markets that they had plenty of “spare capacity,”…Coffee prices have shot up and are nearing the record levels.

    Now (NYT article)

    Coffee futures of Arabica, the high-end bean that comes predominantly from Latin America, have risen more than 85 percent since last June, to $2.95 a pound, partly over concerns about supply

    Then – There is continued debate about whether the world will soon hit “Peak Coffee,” with some commentators saying it has already been reached.

    Now

    “Coffee production is under threat from global warming, and the outlook for Arabica in particular is not good,” said Peter Baker, a coffee specialist with CABI, a research group in Britain that focuses on agriculture and the environment, noting that climate changes, including heavy rains and droughts, have harmed crops across many parts of Central and South America.

    A top coffee scientist, he has rattled trade forums by warning, Cassandra-like, of the possibility of “peak coffee,” meaning that, like oil supplies, coffee supplies might be headed for an inexorable decline unless growers make more concerted efforts to expand production globally.

    Then –  This has done little to allay fears around the world that Peak Coffee and subsequent high prices will lead to a shortage

    Now

    Purveyors fear that the Arabica coffee supply from Colombia may never rebound — that the world might, in effect, hit “peak coffee.”

    Then –  Meanwhile, fingers are pointed at Big Coffee (Maxwell House, Folgers, NesCafe), with complaints about “windfall profits.”

    Now

    Brands like Maxwell, Yuban and Folgers have increased the retail prices of many grinds by 25 percent or more since the middle of last year in light of tight supply and higher wholesale prices.

    Then – … government programs to find alternatives. This lead to things like “unleaded coffee” and also experiments in “bio-coffee”…

    Now

    Researchers at Cenicafé’s (the national coffee research centre) labs are toiling on a mission…Geneticists are breeding plants that are more resistant to diseases or that can withstand torrential rains or a hotter environment.

     

    The NYT article also contains the obligatory price- volume graph in mbd (millions  of bags per day) – you can guess what it looks like.

    Yep, international big business is nothing if not predictable… 

    Sounds like it’s time to go and stock up – you read it here first.

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  58. By paul-n on May 30, 2011 at 4:00 pm

    Well, the fiction continues to be come reality – a story in today’s Globe and Mail;

    Peak coffee: A cup of trouble

    In the face of strong demand, coffee inventories have fallen to their lowest levels on record. A decade ago, coffee-making countries had stored some 55.1 million 60-kilogram bags. Last year, stocks fell to 13 million bags. The industry’s supply-demand balance is so bleak, in fact, that a scientist rocked trade forums last year by warning that the world is veering toward “peak coffee” – the point at which producers can no longer increase production to meet the world’s rising taste for the drink.

    Low inventories, just like the oil industry, but what about consumer prices?

    The squeeze is already being felt in grocery stores and cafés around the world. In North America this week, Starbucks Corp. raised the price of a one-pound bag of beans by 17 per cent at its U.S. stores and 6 per cent in Canada. And J.M. Smucker Co., which sells the Folgers and Dunkin’ Donuts brands, announced its fourth increase in a year for a total hike of 38 per cent.

    Pain at the grinder!  So who to blame for high prices – the usual suspect;

    And while the weather hits inventories, some are blaming the rising cost of coffee on speculators – institutional investors who are pouring money into commodities such as coffee, oil and sugar in search of big returns. Starbucks president Howard Schultz has blamed speculation, rather than supply shortages, for the doubling of coffee commodity prices since last May.

    And on the actual production side, in the same way as oil wells deplete, so too…

    Farmers typically have to cut back their coffee trees every five years in order to rejuvenate the production of berries, and then replace the trees after 15 years as yields decline precipitously.

    But many farmers, especially smaller growers, are extending those timelines to take advantage of the current price spike and because they don’t have the resources to reinvest in their field, even at the prices, which have been offset by the rise in the Colombian peso.

    So they are doing Enhanced Coffee Recovery, to squeeze the most out of old trees. 

    Oil and coffee, declining in unison – this will truly lead to the end of the world as Starbucks knows it.

     

    Time to go and have a nice cup of tea,  I think.

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