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Starbucks Costs Retreat in Coffee Bear Market Slump: Commodities

Like many coffee growers, Nils Solorzano Villareal figured it made sense to expand output as prices surged to a 14-year high in 2011. Now, the 71-year-old Costa Rican farmer is harvesting at a loss.

Record crops from Brazil to Vietnam are compounding a global surplus that drove prices down 27 percent this year, heading for a third annual decline and the longest slump in two decades. Solorzano, who added trees and fertilizer to expand his farm to four hectares (9.9 acres) from three, said he is spending $140 to produce each 60-kilogram (132-pound) bag of arabica-coffee beans that sells for about $132.