Budget Analysis for
Lavender Farming in Delaware
Rebecca L. Carrow, Arthur O. Tucker, and Michael J. Maciarello
Depart of Agriculture & Natural Resources
Delaware State University
Farm Overview
The budget analysis is projected for a 15-acre farm with 5 acres being used to grow lavender, which is an average herb farm in Delaware. Lavender has a life span, typically of 10 years with production life being 8 years. After the 10-year period the lavender will be rotated to the other 5-acre plot on the farm. This will help with the prevention of diseases in the soil. This analysis will cover the costs of 1-acre in the first year of production and the returns expected during the second year.
Land Specifications and Needs
The assumption will be that the land will be owned property. The average price of one acre in Delaware is around $2,616.00. Rent on an average acre of farmland in Delaware is $66 per month (USDA-NRCS, 2002).
Lavender does well in sandy loam soil. The pH is very important and should be between 6.4-8.2, with 7.1 being average (Tucker and DeBaggio, 2000). Lime should be added as necessary to adjust the pH. Irrigation will be needed for the first year only, typically. A drip irrigation unit can be used, generally the plants only need to be watered within the first few weeks of planting and only in times of severe drought. Over watering seems to cause more problems with disease and premature death since lavender prefers relatively well-drained ground.
Operations
Weed control will be the biggest issue after the initial planting. Multiple weeding, hoeing, and rototilling sessions may need to be done monthly. The chart below provides an outline of what needs to get done on a monthly basis in the first year of operation. Obviously, the planting and beginning steps will not need to be followed through during the second year but when the land is rotated these steps will need to be taken again.
Table I. Monthly Maintenance Schedule
|
Month |
Soil Sample |
Till land |
Plant |
Weed (Hand, Hoe, Rototill) |
Irrigate |
Mulch (Sand) application |
Harvest (Varies) |
|
January |
✔ |
|
|
|
|
|
|
|
February |
|
✔ |
|
|
|
|
|
|
March |
|
|
|
|
|
|
|
|
April |
|
✔ |
|
|
|
|
|
|
May |
|
|
✔ |
|
|
|
|
|
June |
|
|
|
✔ |
✔ |
✔ |
|
|
July |
|
|
|
✔ |
|
|
✔ |
|
August |
|
|
|
✔ |
|
|
|
|
September |
|
|
|
✔ |
|
|
✔ |
|
October |
|
|
|
✔ |
|
|
|
|
November |
|
|
|
|
|
|
|
|
December |
|
|
|
|
|
|
|
Machinery and Equipment Investments
This chart details the average price for each product needed for the first year of production. During the second year maintenance, and a few select items, should be the only expenses.
Table II. Equipment & Machinery
|
Equipment |
Company |
Initial Cost (Year 1) |
Maintenance Cost (Year 2) |
|
Greenhouse |
IGC.com |
|
|
|
-20Õx96Õ Cold Frame |
|
$1300.00 |
$100.00 |
|
-20Õx48Õ Greenhouse |
|
$4900.00 |
|
|
Tractor |
|
$10,000.00 |
$46.48 |
|
Disk |
|
$5,000.00 |
|
|
Bush hog |
|
$1,000.00 |
|
|
Drip Irrigation System |
|
$500.00 (per acre) |
|
|
Rototiller |
LoweÕs |
$250.00 |
|
|
String Trimer |
LoweÕs |
$100.00 |
|
|
Harvestor |
Jenquip |
$4,318.00 |
|
|
Distillation Unit |
New House |
$2500.00 |
|
|
Dryer without heat source |
Herbarium Supply Company |
$1000.00 |
|
|
Misc. Items (shovel, trowel, rake, hoe) |
LoweÕs |
$60 |
$30 |
|
TOTAL |
|
$34,910.00 |
$176.48 |
*Prices as of February 2006
Costs may vary; some producers may already have some of the equipment. Also, some of the larger expenses can be reduced such as the distillation unit, harvester, and dryer, by making homemade models. Simply using a garden hose with holes punched and accordingly spaced can reduce the drip irrigation cost.
Below is a cost analysis of a dryer unit that can be home made. Another alternative for a drying facility is purchasing or buying a shed and adding fans inside; for our 15-acre farm this would be the most cost effective way of drying the plant material. This method will work best for any lavender farm over 2 acres. The lavender can be bunched with a rubber band and paperclip, and then hung up on lines of string. This will work well for large amounts of lavender. Place a cloth on the floor to catch any buds that drop.
The model of the dryer below was actually produced and used in an operation. This model is similar to the ÒcoffinÓ forage dryer described by Swain, Jones, and Walpole (1978). This design handles ~78 cubic feet and ~55 square feet of dryer shelf space (Tucker & Maciarello, 1988). Additional attachments and corrections can be made to the model. There are only a few maintenance costs and costs for repairs and updates.
Table III. Build Your Own Dryer
|
Item |
# Needed |
Brand & Model # |
@ 2006 est. $ |
|
Hardware & Lumber |
|
|
|
|
3/8Óx4Óx8Ó exterior grade lumber |
10 |
LoweÕs |
$138.90 |
|
1Óx4Õx8Õ urethane foam board |
5 |
LoweÕs |
$51.90 |
|
1Óx3Óx8Ó furring strips |
25 |
LoweÕs |
$36.25 |
|
6Õ piano hinge |
1 |
LoweÕs |
$30.00 |
|
Miscellaneous hardware (nails, etc.) |
|
LoweÕs |
$40.00 |
|
|
|
|
|
|
Vents |
|
|
|
|
8Óx2Õ stove pipe |
4 |
LoweÕs |
$45.00 |
|
8Ó stove pipe ÒTÓ with damper |
1 |
LoweÕs |
$8.00 |
|
8Ó stove pipe elbow |
3 |
LoweÕs |
$12.00 |
|
6Óx2Õ stove pipe |
1 |
LoweÕs |
$9.00 |
|
6Ó damper |
1 |
LoweÕs |
$3.00 |
|
|
|
|
|
|
Electrical |
|
All Items found in Grainger catalog: |
|
|
240 VAC finned strip heater |
3 |
Vulcan OSF1510-350A |
$174.15 |
|
High volume blower |
1 |
Dayton 2C797 |
$598.50 |
|
Heat element sequencer |
3 |
White-Rodgers 24A51-6 |
$133.05 |
|
Remote bulb thermostat |
1 |
White-Rodgers 1687-9 |
$56.40 |
|
Transformer |
1 |
White-Rodgers 90-T96F2 |
$40.50 |
|
SPST switches |
3 |
Carling Technologies 2FA54-73 |
$12.72 |
|
Manual reset limit control |
1 |
Johnson Controls/Penn A25AN-1E |
$64.55 |
|
Timer SPDT |
1 |
Omron H5CX A AC100-240 |
$144.60 |
|
Dehumidifier |
1 |
Frigidaire 4YH16 |
$164.57 |
|
Total Cost |
|
|
$1763.09 |
Yield & Income:
Yield and income are based solely on the outcome of the crop, which may vary from year to year. Table IV gives a description of an average lavender farms predicted income in each area of interest. This varies; however, by the selection of operation, wholesale or retail. Most lavender farms have a wholesale and retail business and split their lavender crop evenly between the products sold in each area of business. The figures below are predicted income for each section mode of production and vary with the amount produced. These assumptions were made for an excellent harvest year.
Table IV. Yield Prediction & Income Summary
|
|
Area |
Yield-Year 2 |
Unit |
Average Price |
Total Income |
|
|
|
|
|
(U. S. Dollars) |
(U. S. Dollars) |
|
Lavender |
1.0 |
|
acre |
|
|
|
Buds (Retail) |
|
1,000-1,500 |
lbs. |
$6-$10/lb. |
$6,000-15,000.00 |
|
-Wholesale |
|
|
|
|
|
|
Bundles (Retail) |
|
15,000-25,000 |
Bundles |
$6-$10/bundle |
$90,000-250,000.00 |
|
-Wholesale |
|
|
|
$2-$3/bundle |
$30,000-$75,000.00 |
|
Oil – Lavender (Retail) |
|
5-25 |
lbs. |
$22.50 / lb. |
$112.50-$562.50 |
|
-Wholesale |
|
|
|
|
$120-$350 |
|
Oil – Lavandin (Retail) |
|
35-180 |
lbs. |
$10.50 / lb. |
$367.50-$1,890.00 |
|
-Wholesale |
|
|
|
|
$400-$2,000 |
*Information calculated using (Beus, 2000).
Marketing
There are many ways to successfully market lavender. Some of the more popular ways include culinary, essential oil, U-pick, and crafts. Oil production in the United States cannot compete with wholesale markets such as, Australia, New Zealand, and France.
However, alternative uses can ensure success of a small lavender farm in the United States.
The culinary aspect of the industry is rapidly growing. An ounce of L. angustifolia buds are going for about $7.00. Lavender buds and flavoring is used in a wide variety of products including jelly, cookies, ice cream, candy, tea, and honey (Beus, 2000). There are an endless amount of other food products that lavender can be infused with.
Aromatherapy has also become increasingly popular as a use of lavender. The scent can be described as relaxing. Lavender can be used in a variety of incense and oils, including oils to burn and bath oils. Oils can be distilled and used in perfumes, soaps, candy, shampoos, and a variety of other products.
U-pick lavender farms are becoming very popular. Many business have days set aside for the public to come and participate in u-pick days. The lavender can be sold by the bundle or by a flat hourly fee. Bundles of lavender are sold for fragrant decoration purposes.
If your lavender crop is marketed correctly then you are sure to see success. Advertising is a large part of a successful business. The typical lavender producer spends around $200 each year to advertise their product. This can pay off big with internet and phone sales, so consider shipping options also.
Here are some websites that may assist growers:
http://www.rosneath.com.au/ipc6/ch08/coleman/index.html
http://www.newhouse-mfg.com/html/distilleries.html
http://www.eceurope.com/lavenderaustralia
http://essentialoil.com/distillinglav.html
http://www.jenquip.co.nz/herbharvesterHT.htm
http://www.heartmagic.com/00giantstill/85gallon.html
References:
Beus, Curtis. 2000. Lavender production and marketing.
Washington State Univ. Ext. (http://smallfarms.wsu.edu/crops/lavender.html,
accessed March 16, 2006).
Butler, Marvin, Claudia Campbell, and Bart Eleveld. 2002.
Enterprise budget: Peppermint leaf production years, Central Oregon Region.
Oregon State Univ. Coop. Ext. EM-8814.
(http://eesc.orst.edu/agcomwebfile/edmat/EM8814.pdf, accessed March 16, 2006).
Schimpf, Tracy, and Howard Joynt. 2002. Certified organic
versus non-organic budgets for lavender flowers, ¼ acre, winter 2002.
British Columbia Minist. Agric. Food Fish. (http://www.agf.gov.bc.ca/busmgmt/budgets/budget_pdf/specialty_organic/lavender.pdf, accessed March 13, 2006).
Tucker, Arthur O., and Michael J.
Maciarello. 1989. Drying herbs with a low capital investment: Two prototypes.
Pages 95-102 in J. E.
Simon and L. Grant, eds. Proceedings of the Third National Herb Growing and
Marketing Conference, Louisville, Kentucky,
July 17-20, 1988. Dept. Hort., Purdue Univ.
Tucker, A. O. and T.
DeBaggio. The Big Book of Herbs. Interweave Press: Loveland, CO, 2000.
United States Department of Agriculture. Natural Resources Conservation Service. Delaware Agriculture Facts. 2002. 1 February 2006 (http://www.de.nrcs.usda.gov/about/history/delaware_facts_2004.html).