making lavender pay
Post on 02-Jan-2016
59 Views
Preview:
DESCRIPTION
TRANSCRIPT
DETERMINING THE COST OF PRODUCTION (doing the math)
MAKING LAVENDER PAY
Get your facts first, then you can distort them as you please.
Mark Twain
VARIABLES IN LAVENDER PRODUCTION
Is it ‘stand alone’ or part of another enterprise? Does lavender absorb 100% of the costs? Are costs shared with other enterprises?
What will you sell? Buds Bundles Oil Value-added
How will you sell it? Retail from the farm To wholesalers At farm markets Internet sales
LET’S LOOK AT 2 EXISTING BUDGETS
Colorado State University
British Columbia
COLORADO STATE UNIVERSITY
PRODUCTION ONLY Start up costs Annual maintenance costs Harvest costs (bundles only)
ASSUMPTIONS 8 ft (2.4 m) by 100 ft (30.5 m) planting area (2 rows) 46 plants per row (230 bundles @ $4.00/bundle) All numbers based on 1 row
CSU – GETTING STARTED (1 row)
ITEM COST
Enclosed drying shed 1,800.00
Irrigation system (installation & materials)
150.00
Soil test 25.00
Soil prep (labour & amendments) 100.00
Weed fabric (labour & materials) 250.00
Mulch (labour & materials) 85.00
Lavender plants ($2 x 46 plants) 92.00
Misc supplies (pins, sickles, rubber bands, torches etc.)
125.00
TOTAL PROJECTED START-UP COSTS $2,627.00
CSU ….. ESTIMATED ANNUAL COSTS
OPERATION(1 row = 46 plants)
UNITS
UNIT COST
UNITS /ROW
(YR 1) COST/ROW
(YR 2 +) COST/ROW
Labour hours 10.25
weeding hours 10.25 24 246.00 246.00
irrigation hours 10.25 2 20.50 20.50
harvesting bundles hours 10.25 6 - 12 61.15 102.50 – 123.00
hanging bundles hours 10.25 6 - 12 61.15 102.50 – 123.00
marketing hours 10.25 2 - 4 20.50 30.75 – 41.00
Irrigation expenses row 50.00 1 50.00 50.00
Replacement plants plants 2.00 5 10.00 10.00
EST ANN. COSTS 469.30 562.25 – 613.50
EST ANN. REVENUES 460.00 920.00 – 1,380.00
NET (???) RETURNS -9.30 357.75– 766.50
STARTING POINTS WILL VARY
Sometimes it is useful to know how large your zero is. ~Author Unknown
B.C. Planning for Profithttp://www.agf.gov.bc.ca/busmgmt/budgets/herb_specialty.htm
ASSUMPTIONS Buds only ¼ acre First 2 years Does not consider general farm inputs
General labour costs, general marketing costs, irrigation fees, repair and maintenance, certification fees
Does not consider indirect expenses Interest, insurance, administration, legal/accounting
B.C. EXPENSES/INCOME (1/4 acre)
COST Qty-YR 1
Qty-YR 2
UNIT
AVG $ Yr 1 Yr 2
Planting labour 24 hr 10.25 246.00
Harvest labour 40 hr 10.25 410.00
Cost of plants 1,600 each
0.50 800.00
Tractor fuel 14 litres
1.20 16.8
Tractor oil/lube 1.05
bags 50 each
0.03 1.50
Corrugated boxes
2 each
2.50 5.00
Advertising/faxes/phone
100.00
irrigation .25 .25 acres
60.00 15.00 15.00
TOTAL Exp 1,078.85
531.5
INCOME 50 lb 44.00 2,200.00
USEFUL REFERENCE NUMBERS (???)compiled from other lavender-growing areas
150 stems/bundle4 – 7 bundles/plant ….. 14,000 – 25,000/acre12 – 15 bundles yield 0.5 kg dried buds (500 gm)100 – 225 gm dried buds/plant (454 gm=1 lb)@ 4,000 plants/acre (6’ x 24” = 3,630 plants per acre)
http://www.headstartnursery.com/vegetable_transplants/plants_per_acre_calculator.php
Lavenders produce ~ 12,000 dried bunches/acre Lavendins produce ~ 16,000 dried bunches/acre Buds/acre ~ 1,000 lb (454 kg) – 1,500 lb (680 kg)
Oil production: Lavenders: 2.8 – 14 L/acre Lavendins: 18 – 90 L/acre Depends on variety, harvest method, pruning, weather, plant
health
THE TRUTH BEHIND THE NUMBERS
Mathematics are well and good but nature keeps dragging us around by the nose.
~Albert Einstein
THAT’S MY STORY AND I’M STICKING TO IT
top related