By Ayenat Mersie
NEW YORK (Reuters) - All of Target (NYSE:TGT) Corp's flagship coffee brand Archer Farms will be certified fair trade by 2022, the company and Fair Trade USA told Reuters on Wednesday, a victory for that movement, which seeks to make sure producers are adequately compensated for their labor.
Coffee futures are currently trading near 13-year lows, weighed down by a record-large Brazilian crop. Prices are below the cost of production in most countries, forcing some farmers out of business and prompting concern from the industry on its long-term ability to source good coffee.
Archer Farms, Target's flagship-owned coffee brand, sells about six million pounds of coffee each year. Currently, about 20 percent of Archer Farms coffee is fair trade certified.
The United States imported about 3.5 billion pounds of coffee in the 2018/2019 season, according to U.S. Department of Agriculture data.
Fair Trade USA, the leading certifier of such products in North America, works to institute a floor price for farmers; for coffee, that minimum price is $1.40 per pound and farmers receive an additional 20 cents per pound sold.
"The current market is nothing short of a disaster for coffee farmers," said Paul Rice, founder and CEO of Fair Trade USA.
The most active coffee futures contract fell last week to 94.65 cents per pound, the lowest since 2005. Farmers have been searching for ways to find pricing alternatives, including separate pricing mechanisms for high-grade specialty beans.