By Caroline Stauffer
LAVRAS, Brazil, Aug 19 (Reuters) - Farmers and researchers are detecting serious damage to Brazil's coffee plants after a drought earlier this year and say farmers in 2015 could harvest the smallest arabica crop in a decade.
The worst stretch of hot, dry weather on record in Brazil's coffee belt has already cut 30 percent from the nearly harvested 2014 crop in some regions and pushed arabica prices up 55 percent in the last 12 months to a two-year high.
In the first concrete sign of lower 2015 output, flowers are appearing a month earlier than usual in some areas. After the drought, up to 50 millimeters (2 inches) of rain in July triggered isolated flowering in August, something not usually seen in Minas Gerais until September or October.
"The next crop has been very seriously compromised," said Professor Jose Donizete Alves, a coffee plant specialist at the federal university in Lavras, Minas Gerais, pointing to stunted branch growth and an unusual leaf fungus.
He expects Brazil to produce between 24 million and 27 million bags of prized arabica beans in 2015 and said flowering could occur several times this season, stopping farmers from harvesting their coffee all at once.
The piecemeal flowering and pessimistic forecasts are likely to rekindle concerns that two months of extreme heat posed a long-term threat to high-quality arabica beans in Brazil, potentially boosting prices further, hurting small farmers' profits and forcing roasters to seek out new sources of beans or rely on lower quality robusta.
Arabica output in Brazil has not dropped below 24 million bags since 2005. The government forecast 32 million bags of arabica for the 2014 crop in May, down from 38 million bags in 2013, and the Minas Gerais state trade center warned last week of dwindling carryover stocks in Brazil.
Luiz Reis, an agronomist at the government's rural assistance agency Emater in Varginha, called flowering in August highly damaging because of likelihood that the flowers would fall off rather than bear coffee. Any coffee that does result would likely go to waste because of the economic inviability of collecting such a limited amount of cherries out of season.
"We are seeing flowering ahead of schedule and this coffee is going to arrive very early," said Carlos Paulino, president of Brazil's largest cooperative, Cooxupe.
Cooperatives and researchers spoke of fields in full bloom in Boa Esperança and Campos Gerais municipalities in southern Minas Gerais, the region that produces a quarter of Brazil's coffee, as well as in the so-called Cerrado region to the west.
For agronomist Antonio Wander of local research group Procafe, early flowering is only the beginning of troubles for the 2015 crop, because the plants suffered from lack of water. Trees are growing just eight to 10 nodes that hold cherries on their branches, he said, when they should grow some 15 per year.
Furthermore, farmers did not apply fungicides and fertilizers early in the year, said Emater's Reis, because they were waiting for rains that never came to apply the treatments. Now, leaves across the states are tinted with the brown spots of leaf fungus that is usually only a concern in March.
Traveling between the Minas Gerais coffee hubs of Varginha and Tres Pontas between Aug. 11 and 14, Reuters saw fields full of skeleton-like trees, a sign many farmers are opting to prune their plants to save costs rather than harvesting a small crop in 2015.
To be sure, the drought's impact has not been uniform nationwide or even in Minas Gerais, a state larger than France, with hundreds of micro climates. The drought largely spared Brazil's conillon, or robusta crop, grown mostly in Espirito Santo state.
But with Brazil's National Coffee Council already warning the overall 2015 crop could come in below 40 million bags, rains are needed as soon as the remaining 10 percent of the 2014 crop is collected to moisten historically parched soils.
"With normal rains, we'll see a slight reduction this year," said Guido Reguim Filho, a small-scale producer near Varginha. "If it doesn't rain again, there might not be any coffee." (Reporting by Caroline Stauffer; Additional reporting by Roberto Samora in Sao Paulo; Editing by Steve Orlofsky)
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