By Ben Levine for Kapitall.
We all love our coffee, and the proof is in the pudding: these
little beans constitute one of the most important commodities in
Yet, a dangerous threat to coffee production has
appeared in some of the top coffee-producing countries in
Central America-the area of the world where most coffee is
grown-like the Dominican Republic, Honduras and
A fungal parasite called Hemileia vastatrix, more commonly known
as "coffee rust," has been ravaging coffee crops in these
countries. In the 2012-13 crop year alone it was responsible
for just shy of $500 million in
value losses and over 370,000 job losses
The parasite appears as yellow splotches on the leaves of the
plant and corrupts those areas' ability to perform photosynthesis,
damaging or killing plants. For the 2013-14 crop year, the
International Coffee Organization predicted that losses could range
from 20% to a whopping 50% of production, and it has considered
increasing pesticide-use as a means to reduce these losses.
As if this weren't enough, meteorologists
have announced that the likelihood of an
El Niño weather
event this summer exceeds 65%. El Niño events often lead to
excessive rains in the Pacific Basin, which can be harmful to crops
While large coffee companies like
will often counterbalance such events by buying supplemental coffee
in advance, smaller publicly traded roasters and distributors don't
always have these opportunities, particularly at what appears to be
the end of this winter's coffee glut
With El Niño looming ahead in the midst of the coffee rust
plaguing top producing areas, the industry could take a hit, but
such a popular world industry isn't likely to take such losses
without a fight. Interested in deciding for yourself? Use the list
below to make your own analysis, and let us know what you
Click on the interactive chart to view data over
1. Farmer Brothers Co.
): Engages in the manufacture, wholesale, and distribution of
coffee, tea, and culinary products in the United States. Market cap
at $314.95M, most recent closing price at $19.82.
2. Green Mountain Coffee Roasters Inc.
): Engages in the specialty coffee and coffee maker business.
Market cap at $18.56B, most recent closing price at $112.78.
3. Starbucks Corporation
): Operates approximately 16,858 stores, including 8,833
company-operated stores and 8,025 licensed stores. Market cap at
$55.69B, most recent closing price at $73.22.
(List compiled by Ben Levine. Monthly returns sourced from
Zacks Investment Research, all other data sourced from
Kapitall Wire is a division of New Kapitall Holdings, LLC.
Kapitall Generation, LLC is a wholly owned subsidiary of New
Kapitall Holdings, LLC. Kapitall Wire offers free investing ideas,
intended for educational information purposes only. It should not
be construed as an offer to buy or sell securities, or any other
product or service provided by New Kapitall Holdings, LLC, and its
The views and opinions expressed herein are the views and
opinions of the author and do not necessarily reflect those of The
NASDAQ OMX Group, Inc.