If there's one word to describe the market of vanilla, it's volatile. The people and communities who produce our vanilla watch the price of vanilla like hawks as they hope to capitalize on market fluctuations.
The unfortunate truth is that many farmers begin farming vanilla when the price is high, and stop farming when the price is low.
When the price of vanilla is high, buyers are nowhere to be found. When the price is high, you'll see the Chinese, Russians, French, and foreign buyers from around the world competing to buy as much vanilla as they possibly can.
At Origin, we purchase our vanilla from farmers at the market price, regardless of global competition.
We often ask our farmers, "what would you do if the market price of vanilla dropped overnight from $500 per kilo to $50 per kilo?" Although it's unrealistic, it's important that they keep the reality of the market in the back of their minds, during both difficult and prosperous times. We urge them to never be too optimistic nor worried, but rather to remain focused on yield growth and quality.
We've made private agreements with our farmers regarding the fluctuations of market price. When the price is high, they will allow some breathing room for our purchases. When the price is low, we have agreed to pay above market price, so they don't quit farming vanilla due to financial constraints.
More total vanilla farmers = more total vanilla supply = lower vanilla prices
Coffee companies and chocolate companies have both seen a rise in producer focus. Companies and consumers both understand that the producer is the backbone of their business, and without proper agreements, everyone would fail.
We're in the vanilla game for the long-term and our farmers trust us to be there when nobody else is.