The freeze will have the greatest impact on coffee trees under 4 years old. Because of their fragile root systems, trees younger than two usually need be eliminated, while trees between 2 and 4 years old often have to be drastically trimmed and won’t produce the following crop year, said Regis Ricco, a director at Minas Gerais-based RR Consultoria Rural.
The consulting firm has been providing technical loss reports to growers who are going to seek debt renegotiations due to the frost damage. In some regions, farmers lost everything they had.
“Some farmers will have a difficult situation as they got loans from banks to fund irrigation systems, plantings and machinery,” Ricco said. “The impact is stunning.”
Frost in Brazil is a rare occurrence and it has had a significant impact on coffee prices. The price spent most of 2018 through 2020 ranging around $1. It completed the base formation in April and a sustained move back below $150 would be required to question medium-term scope for continued upside.Click HERE to subscribe to Fuller Treacy Money Back to top