SOME IMPORTANT CONSIDERATIONS FOR THE BEGINNING HERB FARMER
By Richard Alan Miller, Northwest Botanicals, Inc.
[The following article is so important that I have chosen to reprint it from HMR-2-3 (March 1986). It has been updated with some further points added, and your feedback would be most appreciated.]
Spring is just around the corner, and buds are already beginning to show on trees in most regions of the country. For those of you who plan a project with alternative crops like herbs and spices for the first time, an overview and Farm Plan on what you need to do is critical. Questions like "what should I plant?" and "how much money do I need?" must have answers before April. Before you can even begin to approach answers to these types of questions, however, a bigger need exists for an overview toward your approach. This is especially true when attempting to develop specific herbs as cash crops.
OVERVIEWS: The following suggestions are recommended for consideration when developing your Farm Plan: (1) All new crops should be cultivated in 2-acre feasibility studies for at least two years before expansion. Smaller acreage will not give a close cost-of-goods production figure, data critically important for any successful expansion program. Each crop has its own idiosyncrasies. You must become familiar with the plant before you put further money and labor into it for development.
(2) Most successful small herb farm ventures use what is known as a polyculture situation. This is where more than six crops are grown, rather than a monoculture program. What this gives to the small farmer is protection against saturated markets, giving him better stability in both marketing and cash flow. If a crop market saturates, that crop can be easily rotated out of the Farm Plan without affecting his other crops. The beginning herb farm should start with about 12 acres, 6 crops, each on a 2-acre parcel.
(3) Often the land you own is not appropriate for the desired crops you wish to grow. An example would be that your land lack irrigation. When working small ventures, appropriate land is rentable for simply the taxes, water ditch costs, and often 10 percent of any gross sales. This is known as sharecropping, and is an excellent way to invest your nest egg into crop development (rather than land payments and earnest moneys). With a lease-option, you might even be able to buy the land from profits off the crops. That is the "old fashioned" way most farmers acquired land.
(4) The need for farm equipment is similar. There are plenty of small farms in given communities who are already well equipped. Often they will be willing to "custom farm" you fields at rates about $25 per acre for each pass. With established marketing for a given crop, where a "custom" farmer will take his payment in crops, the standard rate is 40 per- cent with hay. Crop selection is often made on the availability of specific tools. There is no sense in growing chamomile if a flowerhead harvester is not available.
(5) All new crops must be grown with so-called "organic" techniques. Very few herbs and spice have been "labeled for use" with most pesticides and herbicides via EPA. While some small farms have used sinbar to control grasses in mints without inspection, that will not be true in the near future. It is especially true when attempting to export to such countries as Germany and Japan, which have much tougher laws than FDA
. (6) Your crop selections should be designed for export. Direct marketing only moves money from one part of a community to another. Exporting, however, whether it is out of the county, state, or country, brings new revenues into the community. It also restores the identity of that community. When you produce a product that was previously imported, now you are also helping to balance trade deficits. This is where small farm agriculture will find its stability
. (7) If you export, transportation becomes the single largest expense other than labor. This is why most herbs and spices are sold in a dehydrated form; the "cube" in a truck is worth more money. While most produce trucks are worth $2,000, most filled with a dehydrated herb or spice is worth more than $10,000. This variation in transportation (cost/pound) often makes the difference between closing a sale with a distant port, or not. The bottom line is landed costs, even though most herbs are sold FOB/freight-collect.
(8) The value of a crop is often predicated on the processing done to it prior to shipping. This is why many traditional spice crops are harvested for distillation as oil. Often the best way to enter the marketing of a new crop is as a cottage industry, where smaller acreage can have greater net incomes. Marketing options are also broadened.
(9) Many current farms have too many acres in cultivation. This was how a number of them got into trouble in the first place. The first question a farmer with traditional crops should ask is "what is my annual income needs?" Since most crop alternatives can net as much as $3,000 per acre, this will indicate how many acres will be needed after expansion to full production. This will leave some large parcels available, and free the small farmer for more important things to do, like marketing and value-added projects.
(10) What should be done with these larger parcels, not needed to produce net incomes? The farmer might consider putting them into timber or grasslands, creating topsoil for his great grandchildren. Topsoil is not a "renewable" resource, and is only created, by and large, from forests and grasslands. There is a need for us to assume a form of "Soil Stewardship" toward our children' future with agriculture.
GETTING STARTED: Since most of you would like to begin a project this spring, certain options are no longer available. First, one rarely begins a perennial from seed in the field. The problems with it growing faster than the weeds becomes a serious problem. Therefore, most perennials are developed in nurseries in the winter for a spring planting. This is often quite expensive, averaging more than $0.85 per plant. The average need for perennials is 10,000 per acre, or more than $900 per acre just for nurserystock. There are numerous sources for greenhouse and garden supplies. A typical one for the home gardener with limited greenhouse facilities is the Gardener's Supply Company (128 Intervale Road, Burlington, VT 05401). While their prices are high, their quality and diverse offerings make them a viable resource. E.G. Geiger offers similar tools for the beginning farmer, only their prices are oriented toward larger needs. They can be reached at 1-800-4GEIGER. "Greenhouse Manager," a monthly periodical offers semiannual ALL-INDUSTRY BUYERS' GUIDE. You can find any supply needed with this directory. Write Branch-Smith Publishing (120 St. Louis Ave., Fort Worth, TX 76104). Most farmers begin their perennials in beds outdoors in the spring, set for easy hand cultivation during the summer. The plants are then moved in the fall into rows for following spring cultivation. The new rows are often mulched heavily to protect the new rootlets from hard frosts. In cases of fast-growing perennials, like oregano or parsley, a late-summer move into rows allows some layering before the dormant season. Seed for annuals should be ordered now. The main problem with most seed companies is their lack of attention to specific cultivars and contaminated seeds. It is of- ten worth paying a little more from a smaller seed source, knowing that the seedman's reputation is on the line. Perennial seed can be ordered next month. Both should have detailed plans on how you plan to get them started, and where. Deciding where to put specific crops is an artform. Like reading the racing forms, soil survey maps can give you a lot of tips on your land. I have found that plugs taken for chemical surveys are often useless. The noxious weeds growing on your field will of- ten tell you more about soil deficiencies and what additives are needed than most any other form of soil survey. Their history and regions of control become important factors on techniques used to begin an "organic" cultivation. Most beginning farms start with 2 or 3 annuals, and four or five perennials. Annuals give experience in cultivation problems, while the perennials are still set in beds for hand cultivation. One should not expect to show a profit off first-year productions, even from annuals. You will find more success if the annuals are put up as a cottage industry the first year, helping add to net profits. 2-acre productions are usually too small for bulk marketing interests. 2-acres of dill, however, put up in 1-pound sacks is quite profitable during canning season. Sometime before spring, you should go visit the County Extension Office and obtain a copy of their noxious weeds and native plants lists. As you become more familiar with local weeds, it may be that some of them can be developed as supplemental forms of rural farm income. In the desert, for example, there is chaparral and Mormon tea. Both are currently of some commercial importance, and both are currently being imported. Recognizing a natural resource from a noxious weed can often be used to underwrite a small farm venture. There are other examples of how noxious weeds can become more important than the crop in cultivation. In Iowa, for example, burdock often infestates with corn. The farmer is constantly struggling to eliminate the burdock, usually at a loss on production. Burdock, however, is a major Asian produce, various countries eating it like we eat carrots. In other words, burdock is worth 4X the money as a root crop than the corn off the same acreage. The most important thing to remember is that the first year is suppose to be a "learning year," not one to show big profits and solve your financial problems. It takes time to learn a new crop. Often the soil will actually show you which crops should be grown, like the burdock example. There will be a lot of handwork at first. The key is to learn how to cut time, using tools and techniques. SOME POINTS ON MARKETING: The most common problem with beginning farmers is their security in the sale of a new crop. As a result, many go out to prospective markets and ask what they are willing to buy. Most large buyers do not like to be bothered, with less than 10 percent of the inquiries even attempting to grow something that year. It is recommended that you do not bother a buyer until you have something to show him from you first year's production. There is no substitute for proof of production. If the buyer likes what he sees, he will usually want to buy it on the spot. Most wholesale buyers purchase their needs on the spot basis, like most other commodities. The buyer does not need to know that you have only limited production (2 acres), just show him what is available. The key is to secure a contract each year to meet your cash-flow requirements for the projected expansion program. Whatever else you do, please remember not to attempt rapid growth. That is how agriculture got into this current problem in the first place. There is always lead-time in closing a sale. Most of the larger buyers must secure more than 200 products; each from at least five to ten sources. My approach is to send a one-page description of my crop, including terms-of-sale, with a small sample attached. If they like the price, terms, and small sample, they will then ask for a larger sample, usually 2 pounds or more. Some crops may take as long as six month before a sale. This is normal, for a number of reasons. There are situations where even though your product is better and cheaper, the buyer will not commit to a purchase. Why? One reason might be trade. There are some companies that sell products to a foreign country. Since they do not want to be paid in the currency of the country, they take a trade in on their commodities, usually a spice or drug plant. The actual spices and drugs traded for another interesting story for another time. Chapter 9 on Bulk Marketing from THE POTENTIAL OF HERBS AS A CASH CROP should be thoroughly reviewed, especially the graph on page 159. What this indicates is that often crops are harvested at the very time most buyers are at their lowest cash-flow period. This means that they are not in a position to buy crops when they first become available. The small farmer should attempt contracts for future productions. This gives both the farmer and buyer security. All first attempts on herb and spice farming should be seem as speculation. With this perspective and approach, there should be no expectations, either on production or marketing. Your primary purpose is a s feasibility study toward more lucrative crops. The key is to enter marketing slowly. Most expansion programs show a 2-acre production on a given crop for three years, expanding into 10 or 20 acres within six years. With 6 to 8 crops in a similar production, market securities are established.
Books by Richard Alan Miller