Kona Coffee Farm Realty Blog

Aloha from Kona,

With today being the first of July, it’s the beginning of the new coffee harvest year here in Kona. Because the harvest usually spans from late summer to early spring the next year, we’re coming into the ‘08/’09 season. Typically, the last of the coffee has been picked from the previous year. We’re also seeing the first street prices being posted on road side signs. Prices are low compared to mid or late season prices, but they always seem low at the start.

Most of the spring blooming has finished, although the higher elevation farms still have a few blooms to go. All of the pruning was completed a few months ago. Once the trees are cut, clusters of sucker growth grow from the trunks. These suckers are thinned to the required number to replace the pruned branches. Although we’ve had a fairly cool, damp spring, the summer afternoon rains are upon us. Average rain is around five-inches per month in the summer in our coffee belt.

On the sales front, we’re seeing continued interest in coffee realty. The biggest story recently was the sale of a 60-acre farm for $7,250,000. I’ll do the math for you: $120,833.33 per acre. That’s for one of the larger farms here in Kona. Smaller acreage tends to be running around $150K/acre. I’ll be happy to give you my opinion of trends in coffee realty sales. Just drop me a line and we’ll discuss them.

A hui hou,

Fred Cowell, R(S), Kona Home & Land Realty LLC
(808) 323-3300 office, (808) 936-3032 direct, (808) 323-3309 fax,
gr8coffee@earthlink.net

Here it is the middle of May and we’re still harvesting Kona Coffee cherry from the trees from the last season. We label our Kona Coffee seasons with a two-year tag because the picking season starts in the fall and goes past the New Year into the spring. This year (07/08) we’ve had an especially late harvest.

I suppose it could be attributed to a couple of factors, but I don’t know for sure. First of all, we’re a relatively high elevation farm. High elevation farms don’t get as much daytime sunlight as lower elevation farms. But because the elevation of our farm hasn’t changed this year, it must be caused by some sort of weather phenomenon.

We did get a couple of very wet weeks in late November and early December. Normally our driest months are November through March. We did get normal rains between January and March.

We have had a rather cool spring. With the intermittent haziness from the volcano, our daytime high temps have been slightly lower than normal. I suppose this might cause the fruit that’s on the tree to ripen more slowly.

The size and quality of the cherry coming off right now is bigger and better than early season fruit. So maybe the late harvest is a good thing.

In my last post I mentioned the Google Earth images for the Kona Coffee Belt. I added a pin for the Kealakekua Coffee Company farm. If you seach for Kealakekua Coffee, my pin is on the second page and will take you right to the farm. A saved image is posted for your viewing enjoyment.

A friend showed me the “easter egg” available once you’ve openned Google Earth. If you press Control + Alt + A, it will bring up a cool flight simulator. I’ve been having fun buzzing my house in an F-16 at near Mach 2. WhoooHoooo!!!!

Aloha to all you coffee lovers,

One tool that I use regularly in my coffee and realty capacities is Google Earth. If you haven’t tried it, it’s a wonderful diversion from the daily grind, or an excellent analytical tool if looking at acreage.

As few as a couple of years ago, the only way to get an aerial view of property, houses, or acreage was to hire an airplane or helicopter to fly over. Some firms offer remote control helos that do very good advertising and display prints, but it can be expensive and time consuming.

Google Earth isn’t new, but the imagry and tools just keep getting better. The reason I bring this up now on the Coffee Realty blog is that the imagery for most of the Kona Coffee belt has recently been updated. Resolution is dramatically better. Before, you could see general roadway trends, large buildings, forests, or pasture clearings. Now you can see cars in driveaways, or even individual coffee trees! The photo image is about two years old, but is ten times better than before. I’ve attached a low angle image of the Kealakekua Coffee Company farm for your viewing pleasure.

There are many nice features. For today, I’ll list only a few. When you first zoom in on Hawaii (or anywhere else in the world) you’re viewing straight down. The position of the cursor (little hand) is displayed as a latitude and longitude in the lower left of the screen. It also displays the elevation of the terrain below the cursor. This is very important with coffee land.

In my next post I’ll show you how to find my placemark for my coffee farm. Please feel free to contact me if you have any, and I mean ANY, questions regarding Kona Coffee Realty, or viewing my part of the world from space on your computer.

A hui hou,

Fred Cowell, R(S), Kona Home & Land Realty LLC
(808) 323-3300 office, (808) 936-3032 direct, (808) 323-3309 fax,
gr8coffee@earthlink.net

What a sight to behold!!! After a small bloom around the New Year, a large set of blossoms has erupted on our coffee branches. The fragrance each evening faintly resembles jasmine (in the same family) or citrus. The bloom comes after a long stretch of relatively dry weather. We only had 1.5 inches of rain for the entire month of January at my farm. The trees were beginning to feel stress from the near drought conditions and went into a reproductive frenzie with the steady rain last week.

For all it’s beauty, the flowers will only stay on the tree for three or four days. Most likely, we’ll have a few more weeks of dry conditions following this bloom and the cycle will repeat itself next month. And the month after…

Roughly 80% of the little flowers will produce a coffee cherry in seven to eight months. That’s why each coffee tree will be picked 5 to 7 times next fall and early spring. In fact, some farms are still picking fruit from last May’s bloom.

Come see it if you have a chance, but it won’t last long. Drop me an email if you have questions on our coffee cycle. Coffee realty can be complicated. Be sure to look me up when you’re ready to let yourself take root here in Kona.

A hui hou,

Fred Cowell, R(S), Kona Home & Land Realty LLC
(808) 323-3300 office, (808) 936-3032 direct, (808) 323-3309 fax,
gr8coffee@earthlink.net

Whew, it’s been a busy mid-season for coffee. The Kona Coffee Cultural Festival was a busy time. I took a roasting and cupping class from world renowned roast master, Paul Thornton from Coffee Bean International. While we’re blessed to live in a wonderful location and produce an extemely unique and sought after coffee, we’re not the center of the coffee universe. My “take away” from the class and festival is that each coffee farmer must do their utmost to ensure that they grow, process, mill, and roast quality “Kona” coffee. Please email me with any specific coffee quality questions.

On the realty front, I’d like to point out a couple of listings of mine. One is a 11+ acre coffee farm looking right into Kealakekua Bay. From the Hawaii Information Service site, look up MLS #202200.

If you’re looking for a house with a stunning view of 30 plus miles of South Kona coastline, look at #204799. It’s wonderful house on a 3-acre lot. Not a lot of coffee, but all the neighbors have coffee and it can be easily added.

Wake up and smell the Kona Coffee

Fred Cowell, gr8coffee@earthlink.net

This question is asked constantly. It’s often a lead-in to, “how much money will I make on this farm?” The answer to both is “that depends…” I’m not trying to avoid answering the question, but I believe sometimes the complexity of the question is not grasped by the asker. Historical production records are the best place to start, but may not tell the whole story. Here’s why.

The first indicator of how much coffee cherry can be produced on a farm is the number of trees. While the amount of cherry produced per acre varies from year to year, (depending on pruning, rainfall, fertilizing, storms, etc.), one relatively fixed component of cherry production is the number of trees per acre.

Trees per acre is a strict mathematical computation of spacing of trees. Older Kona Coffee farms were planted on an 8ft by 8ft grid giving about 680 trees per acre. More modern farms, with mowed grass between the rows, tend to be planted closer within the rows and have wider space between rows. 6ft by 10 ft spacing would give gross trees per acre of 726. Mathematically, trees/acre = 43560/(length X width) in ft. Any road, houses, sheds etc would be reduce that number.

So here are three questions I always ask when viewing a coffee listing.
1. “How many trees are on the farm?” The number of trees multiplied by an average cherry production per tree will give a rough guess on cherry production.
2. “What is the tree spacing?” I also usually ask this as a cross check.
3. “Are the production records available?” This reveals yield, not profit.

See, I told you this was a numbers game. It’s a bit like mental gymnastics. More production variables to follow.

Fred Cowell, R(S), Kona Home & Land Realty LLC
(808) 323-3300 office, (808) 936-3032 direct, (808) 323-3309 fax

Welcome to October,

The town is buzzing with activity with the Ironman Triathlon World Championships this coming Saturday. There are lots of numbers: up to 1800 competitors doing a 2.4-mile ocean swim, 112-mile bike race and 26.2-mile run. Months of preparation leading up the big day. Needless to say, it’s an incredible numbers game for each of the participants.

Coffee farm ownership is likewise a numbers game. I often get questions on the numbers. I’ve heard some outrageous claims of production numbers, growing costs, and net profits. As with anything, it pays to do your homework. Often, if it sounds too good to be true, it’s too good to be true. There are also many good “rules of thumb” to go by. I’ll try to cover some of these later in later individual segments.

One of the best sources of coffee numbers is through the University of Hawaii, College of Tropical Agriculture and Human Resources (CTAHR). Anything related to agricultural production can be found under their roof. Be careful, it’s a little like drinking from a fire hose.

http://www2.ctahr.hawaii.edu/oc/freepubs/pdf/AB-11.pdf links to numerous publications, both free and for sale. Search for coffee from here.

More specifically, this link will take you to a 1998 fact sheet with spreadsheet covering coffee economics: http://www2.ctahr.hawaii.edu/oc/freepubs/pdf/AB-11.pdf

Dive in, enjoy the numbers. It may prompt more questions than answers, but be reassured that answers are available from reliable sources if one knows where to look. I’ll be happy to be of any assistance in pointing you to the sources or pointing out good coffee properties. Drop me a line anytime.

Until next time,

So you’re thinking about joining the ranks of Kona Coffee farmers. A key consideration is the form of ownership or land tenure. The two most common forms land tenure in Kona are leasehold and fee simple. Fee simple means you own the property outright. Leasehold means you’ve purchased a lease giving you the right to use that property for the term of the lease. One of the largest land owners in Kona is Kamehameha Schools, also known as Bishop Estate. An estimated 1200 acres of the approximately 3600 acres of Kona Coffee land is owned by Kamehameha Schools. My simple math puts that at about one third of the total acreage.

Fair purchase price for a fee simple farm is dictated by most recent sales. In today’s market, productive coffee land is selling for about $150,000 per acre with no house. Obviously, some locations will drive a higher price/acre, some lower, but this should serve as a decent benchmark.

Leasehold is a different story. Because you’re only leasing the use of the land for the term of the lease, the price is dependent on the amount of time remaining on the lease. Often times the time remaining on the lease is not long enough to be financed by a lending institution. The amount of annual rent charged by the lease will also influence the value of the lease. Triggering a default clause within the lease contract can dramatically increase your lease rent payments. Needless to say, assuming a lease for leasehold property requires an extremely careful analysis to avoid paying too much.

We have many wonderful coffee properties on the market today in Kona, each with its own charm and character, both fee simple and leasehold. However, please take the time to carefully consider your desires and match them to the right farm at the right price. I’ll be happy to help.

A hui hou,

I’m still adding informative text to the book on leasehold vs fee simple coffee property. In the meantime, I’ve added the link to November’s Kona Coffee Cultural Festival. It’s very well attended from all over the world. It runs from November 2nd to 11th. Be sure to check it out. Unfortunately, it’s also a very busy time for the coffee farmers who are usually in the busiest part of their picking season. My mom has been helping run the art competition for years. Needless to say, it’s about more than just drinking really good coffee. I know that in the past some coffee property owners have timed the listing of their property to coincide with the November arrival of coffee visitors. A hui hou,

This blogging stuff isn’t so tough after all. Enjoy the spectacular vista from our farm in Captain Cook looking south toward Honaunau. Perfect Mauka (uphill) elevations around 2100 ft and summer daytime tempratures averaging near 75 have plumped up and ripened our coffee cherry very nicely. Most farms have been harvesting for about a month. Our higher elevation farm just finished the first picking round. I’ll have more photos up soon. Next, I’ll have a short primer on fee simple vs leasehold land ownership. A hui hou!