Ask HN: What to do with a coffee plantation with about 8000 trees?
My dad left me a coffee plantation and I have no experience in this at all, nor did he. It is freshly planted so it won't reach peak production until around 2026. But I want to learn how I could go about taking care of it and eventually start selling beans. Do you have any resource I can take a look at to learn more about coffee and its production process?
337 comments
[ 6.0 ms ] story [ 256 ms ] threadIf it's not your thing, just sell it and carry on with your life.
If you have the cash and time, I recommend visiting roasters and other coffee farms. I took a 2 day roasting class on a coffee farm in Bali. Learned a TON in very little time.
There's coffee as a hobby, and coffee as a professional business. 8000 trees is the latter.
Wanting to learn the business so you can micro-manage your manager sounds like a recipe for disaster.
That or sell it to a big coffee producer and go about your life doing things you’re good at.
Think of one of the simpler tasks. Say you need to fertilize the trees. When is the right time? What is the right amount? How many people do you need to fertilize 8000 trees in time? How do you finance that, including purchasing the fertilizer? Are you even allowed to purchase that much fertilizer (it's been often abused to make car bombs)?
No idea whether fertilizing is even a thing with coffee, but other tasks won't be much simpler.
If you can't hire one, is taking on a temporary partner (for a cut off the profit) an option?
At the very least they could point you in the right direction to get started, and maybe even know someone you could hire.
https://worldcoffeeresearch.org/
I'm skeptical that you're in a position where you can afford to fail, short of edge cases like "I just let the land lie fallow and pump no money whatsoever into it" or "I am a multi-millionaire already without the plantation".
You experiment. It takes a lot of time, yes, but it’s not that difficult.
I find your answer and many other here overly pessimistic and unkind. Not every thing is about hustling a business to perfection and on the first try.
A failed experiment might cost you 8000 trees. It takes a massive amount of time, and money, to re-launch an experiment of this scale. And every re-launch, you restart the 3-4 year clock until trees are mature enough to harvest.
When you quoted me, you left out the part about how to finance all of this.
> Not every thing is about hustling a business to perfection and on the first try.
With an 8000 tree farm, that point is you very very likely have only one try.
I would assume labor is cheap where you’re from, the problem might be with selling your product locally.
You are literally doing the same thing by not completely letting a farm manager take over, or selling it...
I would not try to compete with low-quality bean production. Not sure how much land you have but you most likely don't have the resources to compete at scale. There is, however, a massive specialty coffee market and people are willing to pay good money for good coffee. So besides my recommendations above, try to find some specialty coffee producers in your region and learn from them.
If you are willing to be honest with yourself, you might find that being a farmer is not for you and it might be better to sell. You can also run it purely as a business, aka being a kind of farm manager and not be too close to the ground but employ good people that knows the plants/cultivars and the local environment (weather, soil, pests), listen to your people, treat them well, treat your new neighbours extremely well, as they will assist with a ton of knowledge and sometime physical help. Most importantly, honour the land & the plants; take good care of them and your environment and everything might fall into place a bit easier.
This is tough thing to be given/gifted, to be honest. Please prepare for the worst, emotionally and physically. It might also be the most rewarding and freeing thing you can do with your life and/or become.
Do not discount alternative income streams: if there are more land available, plant some other low maintenance crops or small stocks like chickens and so on for cash flow. If there is a river/stream, forest, small mountains etc, it can be worthwhile to build a handful of cabins or a camping terrain (but small, you want to stay niche, have good ablution blocks, skip electricity, just supply clean water) and so on. Multiple income streams can do wonders for farms. All depends how much money you have upfront to invest into the property. Luckily, you already have the 8K trees.
Good luck mate, hope that the journey ahead works out!
Reality had a lot to say to the contrary. Between the various pests, weather and nutrient problems, I ended up with relatively unproductive gardens both years (Except the peppers, for some reason those ended up being both very productive and very spicy.)
All of this is to say that your comments on farming are pretty spot on. Growing stuff is hard. Growing stuff so that you make some profit to sustain yourself is even harder.
Sounds like you need to look at your soil. What else did you try to grow?
Incidentally, this is one of the reasons why "just stop growing fodder crops for livestock and grow things humans can eat!" doesn't exactly work.
It's not that these were unproductive, I got a good amount of vegetables and herbs from my garden, but it would have been much cheaper to hit up the farmers market to get the same amount of stuff. My anecdote was more speaking to the capriciousness of farming/gardening. Time and effort make no guarantee of the result.
It seems to me generally true in the modern world that it's cheaper to buy mass-produced goods than to make things yourselves. There are exceptions, but they're increasingly rare.
True enough! Growing things successfully is all about education. Actually growing what you grew might have been next to free with the right know-how (composting and natural alterations for good soil, harvesting seeds from organic foods, natural pest control, etc). But of course you don't know that until you get years worth of education!
Similarly, I could afford some pots, hand-picked hot pepper seedlings and "Chilli Focus Premium Fertiliser", and to inspect them daily.
And on a good year I had a great crop, some is still in the freezer. On a bad year, the weather waterlogs them and pests finish them off.
But none of this scales to 8K plants. None of this was intended to show a net profit.
means the plants had a lot of stress :)
They can survive and produce with too much/too little water, don't have _tons_ of pests (although hornworms will strip the leaves if you don't remove them fast enough) and are tolerant to a lot of soil conditions.
There is not a lot of Robusta specialty, and for a reason: it isn't known for being great tasting coffee.
The thing is, for Arabica to be good the roast has to be right and the brew has to be right. Robusta, not as flowery but it can take a lot if abuse and still taste quite good.
> for Arabica to be good the roast has to be right and the brew has to be right
But the OP doesn't have to worry about that, they just need to find a way to market their beans to a specialty roaster. Small batch single origin Arabica can make a tidy little profit.
This, I'll probably switch to mainly Arabica as soon as I can (Bourbon and Arabica Elita)
I couldn't compete with the coffee berry borer and ended up chainsawing them down one by one. Coffee is surprisingly hard wood.
I planted noni instead, but that turned out to be a fad, and those were removed next.
Then I grew taro, and all was well.
Longer-term: start reaching out to top agricultural programs for advice. Look for lists like this one & write to faculty: https://agronomag.com/best-schools-for-farmers-in-the-us/. You’ll probably be able to find people with expertise in coffee. I bet there are also conferences or industry associations that will help with networking. There are probably also government programs in your country.
What happens to the coffee today? Is 8000 trees a lot (sounds like it to me)?
The second part is where I needed help. Thanks for the link.
Yes that's a lot, around 2.5 tons of roasted beans per year apparently.
Mail sent.
The bulk of the land was leased out to a large coffee company on a multiyear lease.
Farming is extremely labor intensive and largely a commodity business. Marketing and branding are largely where profits are made in the beverage business.
As an example of a recent successful high grow beverage company, take a look at Liquid Death, which turned a low budget AD into a billion dollar company within years:
https://youtube.com/watch?v=iXjhNZlqexs
Liquid Death bought water wholesale from a bottling company. At 8000 trees, that’s a business, but barely, and would not support a real growing coffee business. Running building and running business is all about focusing on the right thing at the right time. Realize there’s sentimental value to fact trees were planted by your family, but in the end, it’s critical you’re clear about your goals and situation.
For your specific situation, my grandfather had a different saying: "Find yourself a teacher". He claimed this philosophy came from the Talmud, but I can't say. In any event, my grandfather had already gone from being a door-to-door cloth salesman to a cutter to a tailor, and he always found an expert teacher to attach himself to and learn from, and this usually meant someone humbly but seriously devoted to the work at hand. In the case of the ranch, it was a Cahuilla Indian man who had lived nearby, and who taught him how to take care of the trees. My grandfather employed him as a full-time caretaker and kept up his house on the land for the rest of his life.
My advice with anything where you don't have the knowledge to do it yourself would be to find yourself a teacher by searching in the humblest of places for someone with that knowledge, and make them your mentor.
"Warren Buffett: $10,000 invested in an index fund when I bought my first stock in 1942 would be worth $51 million today"
Looks like he could have done 51 times better for no work
https://www.cnbc.com/2018/05/07/warren-buffett-10000-investe...
I once sold 1000 BTC for about $10k, for reasons largely similar to the ones that kept my grandfather from entering the stock market. I think putting $10k into an index fund probably seemed just as insane to most people in 1942 as keeping $10k in Bitcoin seemed to me in 2012.
In addition to having run a casino, I'm a reformed gambling addict (as long as you don't leave me alone in Vegas for too long). Part of overcoming gambling addiction and its manifestations in everyday behaviour is that I don't second-guess decisions I make out of being too conservative or, in other words, feel regret for pocketing my gains and walking away. That way lies ruin. And also, as a gambler, I'm an optimist, so I don't think I missed my one-and-only chance to make 50x my money. There's always another spin right around the corner.
If he would have invested that $10,000 in the S&P 500 and reinvested the dividends, it would have been worth more than $2 million by the 90s.
https://dqydj.com/sp-500-return-calculator/
[1] https://coffeelands.crs.org/2021/04/agroforestry-and-coffee-...
If not then sell or rent it to someone who does. Do what you want
It might be simpler to sell it to someone else though!
The plant is self pollinating, saving time
All in the plant is poisonous except beans, therefore less animal pests. I assume that it should be better to avoid skin exposure when you prune or manage the fruit.
If you find worms in the berries, check: Coffee Berry borer, biological control with wasps preferred over chemicals at long term
If you find orange patches in the underside of the leaves check: Coffee Leaf Rust, big enemy of arabica, affecting the flavor of your crop. This is the reason why UK drinks tea instead coffee. Will be a problem near the coast at lower areas. Colder places in mountainous terrain are more difficult for the fungus growth and plants in mountain areas over 1300m can deal with it, or grow clean over 1700m.
Don't bring material from contaminated farms
Soil must be rich and a little acidic; moist but well drained. Both are required. Well drained is a must. Fungi invading roots will be one of our main problems and will appear in a valley or if they are planted carelessly.
They want to be under a forest canopy (required to keep moisture), but probably not in dense shadow. Light indirect but bright. You will want to keep part of the current trees
Making a success of a commercial farm requires deep knowledge of the crop, the land, the weather and the local pests. Gone are the days of doing things the way your forefathers did things. Moreso if you actually want to be competitive in the market that you are producing for.
Please dont make the romantic mistake of thinking you will become this farmer and it's all sunshine and success. One bad crop (which could be because of no fault of your own) can mean financial ruin.
My advice: rub shoulders with the locals in the area. Maybe theres a farmer interested in renting your land and trees. Alternatively, appoint an expert to manage and run the farm for you.
Theres a certain romanticism associated whith owning land you inherited. But you have to be honest with yourself and look at the numbers. If it's not your expertise and the financials don't make sense you'll probably be better off selling the land.
My dad and I had exactly this conversation recently. He has some land that he got from his father, that he's renting out to the farming relatives. My dad's at the age now where he needs to plan for what happens to his estate. We looked at the numbers and relaized me and my brother will be better off selling and taking the money. In my country you are liable to pay hefty taxes on inheritance. Neither of us have the reserves to pay those taxes on a piece of land we have no idea how to run or manage. You inherit an asset that you are forced to liquidate in order to afford the inheritance taxes on that asset.
It is worth speaking with an estate lawyer or accountant. There are strategies to avoid this that differ based on country, but insurance usually plays a role. It is, in my opinion, unfair that someone would be forced by taxes to sell the birthright that their parent spent a lifetime working for. Good luck.
Why is it only “cosmically inherent” as long as you don’t hurt others? Has the tiger no cosmically inherent right to his meal? The truth is he doesn’t, he must defend his kill if necessary.
The truth is you must defend what you’ve earned as well, either by force or through mutual agreement (society).
We, as a society, have agreed to grant each other exclusive rights to what we’ve earned. Of course that hasn’t always been the case throughout history. Don’t bring the cosmos into it, it happens through mutual consent, because we choose to.
Your rights are man-made, don’t take them for granted. They only exist so long as everyone agrees they do.
Another form is the right of selection -- I have one, here's another one that just become unowned, and I get dibs on choosing that over my own. If I retain my own, the other lapses to the public. If I choose the other, mine does.
Note I am not arguing that inequality is an unvarnished good or that history isn’t filled with violence and sin. However, that’s a far cry from saying simply that “birthright” doesn’t make sense at least when talking about purely physical items to be inherited.
Land in particular is a special case because more cannot be created (without absolutely massive capital projects and those require some special thinking, but they are outliers).
https://astralcodexten.substack.com/p/your-book-review-progr...
https://astralcodexten.substack.com/p/does-georgism-work-is-...
I think society needs property tax to perform well, or else people will horde control of land under the mistaken belief that they can sell or rent it for high prices. You need tax to bring people back to reality and force them to use it productively in the present.
This paragraph doesn’t make any sense at all either.
The reason is that there is no meaning whatsoever to the concept of earned inequality, and therefore no meaning to the idea of ‘unearned’ inequality.
Now consider a third person who also cares for their child. This person also lives frugally but instead of saving their wealth every year they buy their kid fancy cars and luxury goods. They die penniless but their kid never had to work a day in their life. Is that fair?
It would be good to reframe it with consequentialism in mind to reveal the unspoken truths of the examples.
Ten generations later, the descendants of the first person have all been able to expand their wealth purely due to the wealth that their ancestor had. None of them have had to work hard for generations, but they all vigorously defend their right to give their wealth to their kids without taxes so that they also don't have to work hard. Meanwhile, the descendants of the second person are unable to acquire wealth due to the advantage that people like the first person have in controlling capital, and they all work menial jobs for people like the first person. Is that fair?
I, personally, would have a tax of 100% on all wealth over $100m.
Your response would seem to posit a different set of questions, namely should capital be used to make decisions for society and does a concentration of capital force those without to work a lifetime of menial jobs?
I'm less interested in addressing these questions since I've heard a lot about them before and I think it will take us on a further tangent from the original discussion. But I will just say that I see no difference between a first generation person who doesn't work and a tenth generation person who doesn't work beyond perhaps an abstract greater disconnection from the rest of society and the concept of hard working. And that for capital to have influence over society it must be deployed which carries with it the risk of losing said capital.
Each table plays 10,000 games, and then the number of wins for each player are counted. Which table do you expect to have the greatest difference in the number of wins between players A and B, and which would you expect to have the least difference in wins between players A and B? I'd consider the table with the least expected difference of wins to be the most "fair", and the table with the greatest expected difference to be the least fair. My hypothesis is that table 1 would be the most fair, followed by table 3, and then table 2 would be the least fair.
Translating this to inheritance in the real world, I think being able to give an advantage to one's descendants for 10 generations is less fair than being able to give it to only one generation. In the context of something like an estate tax, I could imagine something like an implementation where accepting an inheritance incurs a higher tax rate on any money bequeathed up to the amount you inherited. For example, if I inherit $1,000,000 over my lifetime and then leave $5,000,000 to my heir, maybe the first $1,000,000 might incur an extra 10% tax, but then the remaining $4,000,000 is taxed at the regular rate. For something like this to be seriously implemented, I expect that it might need do account for more things (e.g. adjustment for inflation), but at least as far as I can see it seems like a pretty reasonable idea. It's possible that something like this already exists though!
But none of this matters because Monopoly is not real life.
The wealthy used to amass real physical resources; ores, livestock, land, people... Now we mostly have them chasing digital zeroes in a bank account. It really is much better. So some people buy a yacht every now and again? That's great! Yachtmakers have a reason to go to work every day and the world keeps spinning.
If you think there should be a cap on the total amount of zeroes anyone can hold at one time I totally get where you're coming from, but I don't get the obsession with taking a cut when someone dies beyond the normal cut we take when people just transfer wealth to eachother because a clever person will just make a plan to do this before they die and that is unfair to folks that aren't so clever.
Monopoly was just an example of a game with currency at the start; you could pick pretty much any other game with a similar mechanic.
> To strain the analogy further, why are you always transferring wins to player A? A better model is to just let both players keep whatever they have at the end of each game and use it to start the next game.
The reason I said to transfer to player A was merely to make it easier to express the inequality; think of player A not as a family line so much as "the set of people who have inheritances" versus "the set of people who don't". That's also why I don't think it matters whether the person is dead or not; my point is showing that having inheritance continue to affect games beyond the immediate one after is significantly different than limiting it to one generation.
> But none of this matters because Monopoly is not real life.
Yeah, I don't think anyone would disagree with this, but the point here is that having previous games affects later ones can give significant advantages and disadvantages, and this result is independent of the game.
> The wealthy used to amass real physical resources; ores, livestock, land, people... Now we mostly have them chasing digital zeroes in a bank account. It really is much better. So some people buy a yacht every now and again? That's great! Yachtmakers have a reason to go to work every day and the world keeps spinning.
I have no idea what this has to do with the discussion at all. Whether digital assets or physical ones are passed on via inheritance doesn't change whether or not starting with extra resources is an advantage or not. I definitely don't think that anyone is arguing that they think the problem with inheritance is that people can buy yachts?
> If you think there should be a cap on the total amount of zeroes anyone can hold at one time I totally get where you're coming from, but I don't get the obsession with taking a cut when someone dies beyond the normal cut we take when people just transfer wealth to eachother because a clever person will just make a plan to do this before they die and that is unfair to folks that aren't so clever.
We have taxes on people giving money to each other directly when alive as well. You can't just give someone $1 million while you're alive to avoid them having to pay taxes on it. If by "clever" you mean "avoiding taxes", then yes, I do think this also shouldn't be allowed, and I don't think I'd be opposed to having the tax rate be similar to the estate tax. From my perspective, the "obsession" is from people who seem to be from people _against_ allowing taxes on estates (using pejorative language like "death tax"[1] to try to derail the discussion). I don't feel the need to as strongly defend sales tax or income tax because there are far fewer people who argue that they shouldn't exist at all, but if the political will to abolish income tax reached similar levels of support to opposition to the estate tax, then I would focus more on it.
[1]: https://en.wikipedia.org/wiki/Estate_tax_in_the_United_State...
When others inherit, society needs to take their wealth and redistribute it. Their situation is not like mine. These millionaires and billionaires got lucky and their kids don’t deserve to be rich for no reason.
https://en.wikipedia.org/wiki/Poe%27s_law
That doesn't necessarily mean it's immoral or should be illegal, but how could you argue that it's fair that some people get free money while others don't by the luck of their birth?
A forced raffle where everyone has to join is unfair, yes. That's why we have laws, and there is (ideally) no randomness.
I don't see how it's "fair" that I was born to hardworking, financially responsible parents, while most others were less lucky though.
I think the aim of this is to avoid breaking up already poorly performing farms, and because the business tend to be low-revenue but high in assets (land, mostly). Doesn't hurt that farmers are a huge voting block here.
You can hedge crop in many ways. Give Terry Duffy a call.
1. Borrow against the land to pay the inheritance taxes.
2. Rent the land to a farmer, use the cashflow to pay off the inheritance tax loan until it’s paid off.
3. Keep renting the land to receive cash income.
If the cashflow from renting the land is not enough to pay off the tax loan, sell the land.
Are you aware of better strategies to do that?
...plus logistics, storage, insurance, finances, repair, markets, etc, etc. I would be interested in working with a farmer through some time of my life just to learn such a wide variety of tasks!
As said, there is a lot that goes into farming these days and almost everyone specializes in a crop or two. The folks that do it the old fashion ways without adapting are usually going under because their yields are poor / inconsistent. This will likely be you if you go at it alone, so unless you are okay with eating some losses then I would get help.
I am a farm boy. There was one night many decades ago where I said to myself: "You can either wrap your head around DiffEQ, pass the course, and graduate with an engineering degree, or go home and clean hog barns for the rest of your life." I chose option A. While this makes a good story, it is also the literal truth. The point being, I grew up in farming and understand it, but have little desire to manage a farm myself. Same goes for my wife.
Eventually with the passage of time, we inherited farm land. Our path has been to rent the land to farmer operators that we have good relationships with, and manage the leasing ourselves. If course, with the advice of an attorney and an accountant that are both local to the area where the farms are and who do a lot of farm-related practice. We feel we understand farming well enough to engage with farmer-operators and negotiate fair rents, get soil-conservation terms in our lease agreements that we desire, negotiate capital improvement projects that are mutually beneficial (some of our farm land had drainage tile installed a few years back, for example.)
If you go this path, you will want local legal and accounting advice. You should also understand enough of the "big picture" items like the ebb-and-flow of the pricing of the commodity in question, how that impacts rents, the rent models used with operators for that particular commodity, and any farming practices that you with to enforce, such as soil and water conservation, appropriate use of pesticides and herbicides, who gets the rent from pollinators if that applies, etc.
Option 2 is farm management companies. My farm land is in Iowa and Minnesota, so hardly coffee country. It is corn (maize) and soy bean country. There is a corn-belt farm management company called Hertz farm management that is one of the large, reputable farm management companies that many people in our situation use. You might be able to find an equivalent firm. This is a good option if you want something more turn-key, and don't feel that you have sufficient expertise be a landlord-with-a-clue.
300km in any direction is far enough that the rules are different.
Do you live in France by any chance?
https://turbotax.intuit.com/tax-tips/estates/what-are-inheri...
Out of scope for this comment, but there are several ways these taxs is avoided.
The next few years should see coffee prices increase due to the losses this year in South America due to the prolonged / unexpected frosts.
All I could find for a starting point. This might not be totally applicable to your region, but I'd suggest you seek out coffee growers association in your area for further advice. Best of luck.
https://agrifutures.com.au/wp-content/uploads/publications/1...
https://www.agrifarming.in/coffee-growing-information-beginn...
That is why I want to learn, scammers are everywhere. Thanks for the links.
just spend 2mi on machinery and you should be good to go.