W Herbs 930 Davis India

8/11/2019 W Herbs 930 Davis India

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Can You Make a Profit

Growing Medicinal Herbs?Jeanine M. Davis

Dept. Horticultural Science

North Carolina State University

Jeanine Davis 2013Photos from Jeanine Davis program unless noted otherwise. Photo on right by Zen Sutherland.


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What kind of herbs are we talking about?


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Photos by Jeanine Davis and Nutraceutical World.

Yes, some farmers can make a profit growing

medicinal herbs. There are good reasons to consider growing

medicinal herbs.

But much to think about before planting asingle seed.


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Why even consider growing

medicinal herbs?

Consumer sales of nutrition products

grew 8.4% to $126 billion in the U.S.in 2011.

Preliminary projections put 2012growth at 9%.

Quotes from Nutrition Business Journal, Nov/Dec 2012 issue.Photo from NBCnews.com


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On the raw material & ingredient supply

side, total sales in 2011 grew 10.5% to$11.3 billion.

Data from Nutrition Business Journal, Nov/Dec 2012 issue


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Rising Demand for Domestic Sources

of Raw Materials

Concern over contaminated products from overseas.

Increasing shipping costs.

Consumer support for local and organic products.

Photos: Tom Konsler and Jeanine Davis


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Qty Price per

unit

Year Year 2 Year 3 Year 4 4 Year

totals

Operating expenses

Labor* 320 hr $8/hr $800 $240 $240 $1,280 $2,560

Planting stock (roots) 60 lb $25/lb $1,500 $1,500

Fertilizer, lime, mulch $150 $150

Equipment ** $600 $600

Utilities $100 $100

Organic certification $100 $100 $100 $100 $400

Packaging $200 $200

Total expenses $2,550 $340 $340 $2,280 $5,510

Dried root sales 160 lb $50/lb $8,000 $8,000

Net income $2,490

*Site prep, planting, maintenance, harvest, washing, and drying.**For washing and drying.

Budget for One-tenth Acre of

Organic, Woods Grown Goldenseal


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Not everyone makes money

growing medicinal herbs


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Did everything right!

Read all the

publications.

Went to

conferences.

Got advice fromagriculturalspecialists.

Studied enterprise

budgets.


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But couldnt sell the stuff!

Was a buyer

consulted beforeplanting?

Was the herbprocessed andpackaged as the

buyer wanted?

Were GAPs

followed?


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Selling medicinal herbs is very differentfrom selling fruits and vegetables

Photo on left from J. Davis, in middle from npr.org, and right from fao.ogr
http://www.google.com/url?sa=i&rct=j&q=lettuce+forklift+pallet&source=images&cd=&cad=rja&docid=4mKuXaHn5BgIwM&tbnid=u72cbjSxH68NzM:&ved=0CAUQjRw&url=http://www.fao.org/docrep/008/y4893e/y4893e05.htm&ei=0wQgUaiOK5OO0QHpsIDgDg&bvm=bv.42553238,d.dmQ&psig=AFQjCNGqeR2XGc5OZ2Zf4a8zkw1fmfa1lA&ust=1361139210591082http://www.google.com/url?sa=i&rct=j&q=produce+forklift+pallet&source=images&cd=&cad=rja&docid=nEMobW-X2WUD3M&tbnid=LCZislfwabdx0M:&ved=0CAUQjRw&url=http://www.npr.org/2013/01/23/170038401/fla-tomato-growers-push-to-end-price-agreement&ei=rwMgUfOXNOfy0QH95oHgDQ&bvm=bv.42553238,d.dmQ&psig=AFQjCNGJHAbBepjKAap39NFqd481GLRj0A&ust=1361138966056777


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On the bulk raw material market, there

has been consolidation-fewer buyers


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Some of these buyers serve aniche market


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There are some manufacturers

buying direct from farmers

Photo on right from Gaia Herbs


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There are some small manufacturers

who will pay a premium for locally grownor fresh herbs

Photos from Red Moon Herbs
http://www.google.com/url?sa=i&rct=j&q=red+moon+herbs&source=images&cd=&cad=rja&docid=1z78nVcUJr5bCM&tbnid=j8OY-zEibFNLSM:&ved=0CAUQjRw&url=http://www.facebook.com/redmoonherbs?group_id=0&ei=bQggUZHGEaq-0QHkl4HoAQ&bvm=bv.42553238,d.dmQ&psig=AFQjCNFvBPkpq0bH69fTFFxvoIVAXUVn7Q&ust=1361140020187986http://www.google.com/url?sa=i&rct=j&q=red+moon+herbs&source=images&cd=&cad=rja&docid=Z46VQeXtTdlb-M&tbnid=AKi5P0Qz2oomLM:&ved=0CAUQjRw&url=http://www.redmoonherbs.com/home/bloghome/&ei=KgggUd7LCI280QGimYDQDQ&bvm=bv.42553238,d.dmQ&psig=AFQjCNFvBPkpq0bH69fTFFxvoIVAXUVn7Q&ust=1361140020187986


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There are direct market

opportunities

Practitioners

Herbalism schools

Farmers

markets

Festivals

Internet salesPhoto on left from blueridgeschool.org


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So how do you find a buyer?


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Consumer products


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Buyers are looking for farmers with the

proper experience and equipment


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Need to build a relationship-takes time


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Think of it as any new business-it could

take 3 to 5 years to be profitable


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We cant compete on price or volume

with imports. Focus must be on quality.

Certified organic

Product testing

GMPs

Handling and storage

Photo on right from Gaia Herbs


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Good Agricultural Practices (GAP)

Must be properly identified.

Must meet specifications agreed upon between

grower and buyer.

Must be clean and free of all contaminants.

Good environmental stewardship should be

practiced.

Abide by all laws.

Harvest at optimal times for highest quality.

Practice good post-harvesting handling and storage.


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Good Manufacturing Practices(GMP)

Manufacturers must be able to verify the

identity of all ingredients.

Opportunity for growers to provide the raw

material and supporting documentationmanufacturers need to meet these newrequirements.

Provide certificate of analysis, botanistsapproval, and/or voucher sample.


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Keep production records

Site history

Seed source

Productsapplied

When plantedand harvested

Drying

temperatures


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Four year project to determine if NC farmers couldproduce the quality and quantity of herbs to becompetitive on the global market.

Growers were given $5,000 grants. Six buyers worked with us to purchase the herbs.


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They learned how to produce, propagate,harvest, clean, dry, and market a widevariety of medicinal herbs.


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We also trained countyextension agents, prepared

extension materials, and spokeat conferences and growermeetings around the state.


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We conducted research to answer production questionsthat arose and help improve marketability of our herbs.


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What did we find out from working with

all these farmers?

Medicinal herbs can be profitable crops.

It takes time to learn to grow and process them.

They need more support from extension agents andresearchers.

Markets are too often uncertain, undependable, and

prices too low.

Photos from J. Davis program


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What would it take to get more farmers

growing medicinal herbs?

More long-term contracts between growers andbuyers.

Prices paid that cover the true costs of production.

Dedicated production and marketing support.

A way to add more value to what is produced.


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