What is the farmgate price?

The farmgate price is the price that covers only the producer's costs and profits before exporting. Though we may think of farmgate price as the price of everything that happens until the coffee passes through the gates of the farm (hence the name), there can be quite a lot of variation in what a producer considers to be their farmgate.

In other words, the farmgate price may or may not include the cost of transport until an external warehouse, if that is needed, and even the milling of the coffee if the producer has its own warehouse. In other cases (such as in Ethiopia, where smallholders deliver coffee cherries to a washing station, or in Peru, where they deliver parchment to a cooperative's warehouse) it equals the price paid for cherry or parchment upon delivery. 

At Algrano, we strive to provide insights into the breakdown of these costs. Though we can't track the farmgate price of all Verified Sellers, we offer producers the possibility to communicate their price breakdown in the platform. There are two main situations that might affect the farmgate price on Algrano:

  1. The producer is the seller. He or she provides the farmgate price for the coffee in kg. This is the price that the farmer receives for the coffee and it might include processing and exporting costs, depending on how integrated the producer is.
  2. The co-operative/exporter is the seller. The co-operative or exporter might provide an estimation of the actual farmgate price paid to their associated farmers for cherry or parchment. They might also not be able to provide such an estimation and consider the "farmgate price" as the "co-operative price” which then includes processing and exporting.