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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=13611389660567778/11/2019 W Herbs 930 Davis India
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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=13611400201879868/11/2019 W Herbs 930 Davis India
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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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