Wednesday, January 12, 2011

Colombian coffee production and statistical BS in news releases

Grow, grow, grow. The touchstone for any company or association in our wonderful modern world is to show how much your growing and thrusting forward and all that stuff. Now for sure if the growth is genuine and good it's worthy of mention, but the wary ananlyst is always on the lookout for the bullshit layer put on the fun fact and figures.

BS number massaging is found in many spheres and especially true in this author's normal chosen biz subject of junior miners (where the scumball liars come by the dozen). But also true in place like the Colombian coffee scene as noted here yesterday. The jaded numbercruncher (such as your humble scribe) develops a BS-meter that's triggered by this type of news headline and lead paragraph:

Colombia Coffee Production Increased 14% In 2010

Good weather during the first half of last year and the incorporation of renovated areas were the main reasons for the consolidation of 14% growth in production.

What's strange about that one? Well firstly it's a percentage figure only, one of the things that should get your BS-meter twitching. Secondly, there's a certain forced happiness about the lead para (it's a finely tuned BS-meter these days). And thirdly, your author happens to know that Colombian coffee production hasn't been that great recently. So when the forced smiles of a Colombian Coffee Federation news release run against memory, it's off to the stats department we go and a chart we make.

Saying things are great in 2010 by comparing them to 2009 is like saying things are great in Tucson right now because the congresswoman didn't die. But you see this kind of statistical massaging all over the place. I mean, would you prefer a country's economy to have grown by 4% in 2009 and then 4% in 2010? Or do you prefer a country that crashes to 0% growth in the 2009 recession year and then bounces back to 8% the next year? If you prefer the first, you like Bolivia, if you prefer the second, you like Peru (in rounded terms at least). 

Anway, coffee production has been shitty for two years in Colombia and that's the only thing you really need to know about this post (the rest is just rambling). Oh by the way, due to the exceptionally heavy rainfall in Colombia this last couple of months it's going to be crappy in 2011, too. Just so you know.