Budget Analysis forLavender 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 5acres being used to grow lavender, which is an average herb farm in Delaware. Lavenderhas 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 ploton the farm. This will help with the prevention of diseases in the soil.  This analysis will cover the costs of1-acre in the first year of production and the returns expected during thesecond 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 anaverage acre of farmland in Delaware is $66 per month (USDA-NRCS, 2002). 

 

Lavender does well in sandy loam soil. The pH is veryimportant and should be between 6.4-8.2, with 7.1 being average (Tucker andDeBaggio, 2000). Lime should be added as necessary to adjust the pH. Irrigationwill be needed for the first year only, typically. A drip irrigation unit canbe used, generally the plants only need to be watered within the first fewweeks of planting and only in times of severe drought.  Over watering seems to cause moreproblems with disease and premature death since lavender prefers relativelywell-drained ground.

 

Operations

 

Weed control will be the biggest issue after the initialplanting. Multiple weeding, hoeing, and rototilling sessions may need to bedone monthly. The chart below provides an outline of what needs to get done ona monthly basis in the first year of operation. Obviously, the planting andbeginning steps will not need to be followed through during the second year butwhen 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 neededfor the first year of production. During the second year maintenance, and a fewselect items, should be the only expenses.

 

Table II. Equipment & Machinery

Equipment

Company

Initial Cost (Year 1)

Maintenance Cost (Year 2)

Greenhouse

IGC.com

 

 

          -20’x96’ Cold Frame

 

$1300.00

$100.00

          -20’x48’ 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

Lowe’s

$250.00

 

String Trimer

Lowe’s

$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)

Lowe’s

$60

$30

TOTAL

 

$34,910.00

$176.48

*Prices as of February 2006

 

Costs may vary; some producers may already have some of theequipment. Also, some of the larger expenses can be reduced such as the distillationunit, harvester, and dryer, by making homemade models. Simply using a gardenhose with holes punched and accordingly spaced can reduce the drip irrigationcost.

 

Below is a cost analysis of a dryer unit that can be homemade. Another alternative for a drying facility is purchasing or buying a shedand adding fans inside; for our 15-acre farm this would be the most costeffective way of drying the plant material. This method will work best for anylavender farm over 2 acres.  Thelavender can be bunched with a rubber band and paperclip, and then hung up onlines of string. This will work well for large amounts of lavender. Place acloth on the floor to catch any buds that drop.

 

The model of the dryer below was actually produced and usedin an operation.  This model issimilar to the “coffin” forage dryer described by Swain, Jones, and Walpole(1978).  This design handles ~78cubic feet and ~55 square feet of dryer shelf space (Tucker & Maciarello,1988).  Additional attachments andcorrections can be made to the model. There are only a few maintenance costsand costs for repairs and updates.

 

Table III. Build Your Own Dryer

Item

# Needed

Brand & Model #

@ 2006 est. $

Hardware & Lumber

 

 

 

3/8”x4”x8” exterior grade lumber

10

Lowe’s

$138.90

1”x4’x8’ urethane foam board

5

Lowe’s

$51.90

1”x3”x8” furring strips

25

Lowe’s

$36.25

6’ piano hinge

1

Lowe’s

$30.00

Miscellaneous hardware (nails, etc.)

 

Lowe’s

$40.00

 

 

 

 

Vents

 

 

 

8”x2’ stove pipe

4

Lowe’s

$45.00

8” stove pipe “T” with damper

1

Lowe’s

$8.00

8” stove pipe elbow

3

Lowe’s

$12.00

6”x2’ stove pipe

1

Lowe’s

$9.00

6” damper

1

Lowe’s

$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 averagelavender 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 andsplit their lavender crop evenly between the products sold in each area ofbusiness. The figures below are predicted income for each section mode ofproduction and vary with the amount produced. These assumptions were made foran excellent harvest year.  

 

Table IV.  YieldPrediction & 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 ofthe more popular ways include culinary, essential oil, U-pick, and crafts.  Oil production in the United States cannotcompete with wholesale markets such as, Australia, New Zealand, and France.

However, alternative uses can ensure success of a smalllavender farm in the United States.

 

The culinary aspect of the industry is rapidly growing. Anounce of L. angustifolia buds are goingfor about $7.00. Lavender buds and flavoring is used in a wide variety ofproducts including jelly, cookies, ice cream, candy, tea, and honey (Beus,2000). There are an endless amount of other food products that lavender can beinfused with.

 

Aromatherapy has also become increasingly popular as a useof lavender. The scent can be described as relaxing. Lavender can be used in avariety of incense and oils, including oils to burn and bath oils. Oils can bedistilled and used in perfumes, soaps, candy, shampoos, and a variety of otherproducts.

 

U-pick lavender farms are becoming very popular. Manybusiness have days set aside for the public to come and participate in u-pickdays.  The lavender can be sold bythe bundle or by a flat hourly fee. Bundles of lavender are sold for fragrantdecoration purposes.

 

If your lavender crop is marketed correctly then you aresure to see success.  Advertisingis a large part of a successful business. The typical lavender producer spendsaround $200 each year to advertise their product. This can pay off big withinternet 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.essentialoil.com

 

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 organicversus 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 andMarketing 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 ofAgriculture. Natural Resources Conservation Service. Delaware AgricultureFacts.  2002.  1 February          2006 (http://www.de.nrcs.usda.gov/about/history/delaware_facts_2004.html).