A guide to farmgate coffee prices and what they mean

“What’s the farmgate price of this lot?”

It’s a question we’ve been getting more and more often from the roasters that we work with. And it’s great to see; by showing more awareness of price breakdowns at this end of the supply chain, we can begin to consciously pay a bit more for coffee that has the biggest impact for farmers and producers back at the beginning of the supply chain.

But to make this happen we need to make sure that there’s a proper understanding of what a ‘farmgate’ price is, and how it differs from country to country, and even farm to farm.

What is a farmgate price?

The word ‘farmgate’ is a bit misleading, the use of ‘farm’ would imply that it’s the price of the coffee as it leaves the farm it was grown on. Great! However, the state that coffee is in when it’s purchased can vary quite significantly depending on the farm, and the price along with it.

The key here is the processes carried out at farm level. There are farms that grow, process, and mill their own coffee -these are larger operations whose output will be green coffee. On the other end of the spectrum are farms who grow and harvest coffee before selling it on to a washing station or other trader -typically seen among smallholders, whose output will be coffee cherries.

Here we have two products: green coffee and coffee cherries. As you can imagine, the prices they are sold at -their ‘farmgate’ price- are going to be completely different. For green coffee, the price per kilo will be higher, because it has been through a number of value-adding processes that need to be financially accounted for and ultimately make a product that is ready for export. Meanwhile for cherries, the price per kilo will be lower, as it has yet to go through those processes and thus is not ready to be shipped.

The main takeaway here is that, if a farmgate price is the price paid for coffee at farm level, it might not fully explain the price you’re paying for the green product. In actuality, you might be missing a few chapters of the full story.

Breaking down the price of your coffee

To get the full picture of what you pay for your coffee, we’ve asked Sidney Kibet of Lot 20 to take us through a complete breakdown of one of their more expensive coffees: the Orange Co-Ferment, to see how we got to the price on our offer list of £14.91 per kg.

Cost breakdown of Orange Co-Ferment -2025/2026 Season

1. The Raw Materials & Yields

As you may know, one kilogram of cherries does not equal one kilogram of green coffee. In fact, the 4,480 kg of Orange Co-Ferment that we received from Lot 20 this harvest was made up of 42,311 kg of coffee cherries (plus 1,322 kg of oranges used in fermentation). Most of the mass of that number is lost once the cherry flesh and parchment are removed from the coffee, however there is also an additional 10% weight loss during dry milling in the form of chipping, shells, defects, and under-screen 14 beans.

Lot 20 paid for every one of those cherries though, even the ones that turned out to be over/underripe or defective in another form.

2. Cost Breakdown per Kilogram

Lot 20’s annual fixed costs are spread across the 1,200,000 kg of cherry they processed this season. The following breakdown reflects the costs and financing required to produce one kilogram of your green coffee, up to the point it rests in their Rongo warehouse.

(Note: Calculations are based on a 1 USD = 129 KES exchange rate)

Cost Category	Description	Cost per Kg (USD)
Cherries	Price paid to farmers at buying centres (90 KES / kg)	$6.59
Finance / Cost of Capital	14-month harvest financing at 15% p.a. to purchase cherries	$1.15
Sourcing Overhead	Buyer centre managers & catchment area logistics	$0.60
Co-Ferment Additive	Fresh oranges sourced at 60 KES / kg	$0.16
Labor & Processing	200 seasonal workers, washing station fuel, & water	$0.71
Internal Logistics	Transport for cherries to beds, to store, to Kisii mill, and back to Rongo	$0.05
Dry Milling & Sorting	Mill fees ($70/tonne) and manual hand-sorting (400 KES/50kg)	$0.12
Packaging	Grainpro & export paper bags packed at 40 kg	$0.06
Fixed Overhead	Prorated annual facility leases, 8 full-time staff, and infrastructure	$0.62
Total Ex-Warehouse Cost	Total cost to produce 1 kg of green coffee	$10.06

Right, $10.06 per kg. By the time the coffee is on the water, that price is up to $12.80 to account for shipping and export costs. At the exchange rate we purchased on, this converts to £10.65 before it’s even left Kenya.

On our end, that cost increases when you factor in the price of financing, logistics, picking and packing, and storage, eventually bringing us to the £14.91 per kg you see on our offer list.

Learning the full story of your coffee

As you can see, a lot of the cost-adding processes we’ve described lie outside the purview of a farm, but are still just as necessary to the final product.

So, should we stop asking for farmgate prices? Is that wrong?

Absolutely not, however it’s important for us to temper our expectations. Creating a detailed breakdown of costs like the one above takes a decent amount of time, and it won’t always be a given that this level of depth will be possible.

But if this information is available, our advice would be for buyers to make sure they understand the full journey their coffee has been on, and the reason for all the stages involved. That way when you ask for the farmgate price or a cost breakdown, you’ll be able to make more informed judgements on whether or not farmers and producers are getting paid a ‘fair’ amount.

Context makes all the difference. All we can recommend is being curious, asking questions to us or to the producer you work with or just doing a bit of research on why things are done the way they are. There are aspects like local culture, history, government legislation, the accessibility of resources, all of this has an impact on the price of your coffee in ways that can’t be itemised on an invoice.

And if you ever want to know more, we’d love to have a chat over a good brew.