Rural Industries Research & Development Corporation

The New Rural Industries
A handbook for Farmers and Investors

Culinary herbs

Introduction

Domestic and industrial consumption of culinary herbs and spices has steadily increased around the world during the past few decades due to changing lifestyles affecting traditional eating patterns, greater consumption of processed and convenience foods, and a return to healthier eating habits in developed countries. Worldwide, demand for reliable supplies of quality material from sustainable production systems has consequently increased, and is expected to continue increasing in the foreseeable future.

Consumption of culinary herbs and spices in Australia has increased in line with global trends and this is expected to continue. Australia is a net importer of dried herbs and spices, producing under 10% of its requirements, but the import data collected by Australian Customs do not differentiate the products sufficiently, and hence are of no real value to growers.. Opportunities therefore exist to provide material both for import replacement in the domestic market, and export sales. The majority of fresh herbs and spices consumed within Australia are produced domestically

With a relatively clean environment, ready availability of suitable land in a range of climatic zones, extensive agricultural and technical expertise, and a history of mechanised production, Australian growers can produce herb and spice crops of the highest quality, and conceivably increase their global market share. Additionally, crops can be produced here in the northern hemisphere `off season', when overseas buyers are seeking product.

The domestic market is still immature and many growers are currently experiencing difficulties in realising anticipated returns. Large export markets exist but the volume of production in Australia is relatively small. The individualistic nature of Australian growers tending to compete with one another rather than co-operating to increase the pool of product available for these export markets, holds the industry back. The challenge for Australian producers is to meet the larger (predominantly overseas) contracts, providing high quality product at reasonable cost to the buyers, while continuing to maintain themselves in a sustainable production system.

To be a successful grower in the culinary herb industry, you need to possess good organisational skills, be dedicated to the production of the highest quality material possible, be able to work hard or be ready and able to employ others who can, and be willing to actively and openly co-operate with others in your industry, be they growers, processors, wholesale or retail traders, researchers or government organisations.

Markets and marketing issues

It is generally believed that the opportunities to produce tropical spice crops in Australia are limited because of the intensive nature and high cost of production and the existence of established low-cost spice centres in countries more suited to their production. Greater potential exists in Australia for non-tropical spice crops suitable for mechanised production (e.g. coriander, anise, fenugreek), crops suitable for value-adding (e.g. ginger) or crops which target a niche market (e.g. peppercorns).

Fresh and dried herb crops are considered to be a more viable option.

Fresh culinary herbs

The market for fresh-cut culinary herbs is estimated to be worth over $3 million/year.

The demand for clean, flavoursome herbs has been steadily increasing, but the market within Australia is limited. Buyers (including restaurants, supermarkets, greengrocers, produce markets, food processors and caterers) are supplied by market gardeners and specialist herb suppliers either by direct sale or through wholesalers. Returns vary with season and how the herbs are sold (e.g. from $0.50 in summer for a 100 g bunch to $2 in winter for a 50 g bunch).

The current level of interest in fresh-cut herbs from new growers is posing a threat to some established growers, significantly reducing returns on some crops. Potential growers must be aware that price undercutting can create instability in the marketplace and will affect their own long-term viability.

To develop or to maintain/expand their market share, established and potential growers will need to reduce their costs through increased efficiency and economies of scale, and to seek niche markets such as off-season greenhouse production, gourmet food processors, and `trendy' herbs such as hot chillies, or grow herb crops in conjunction with other speciality crops, such as fancy lettuce or Asian vegetables. An efficient and effective cold chain system is essential, and retailers require consistent supply throughout the year, and from year to year.

There is some potential for export of top quality herb crops to Northern Hemisphere and Asian markets through established exporters. The market is currently underdeveloped and unstable, but opportunities exist for reliable growers committed to regular supply of quality product. Opportunistic sales are also possible, but individual growers will need to establish themselves on the domestic market before considering export with its additional problems.

Dried culinary herbs

The domestic market for dried culinary herbs is estimated to be 400-500 t/year with a value of around $18 million. Dried garlic accounts for an additional 1000 t or more, dried onions a further 1500-2000 t, paprika 600 t and chillies 600 t. The bulk of this product has traditionally been sourced from low-cost countries such as India, Egypt, Turkey, China, Pakistan, Morocco, Eastern Europe, etc. However, we are now seeing companies in countries such as the USA and Germany developing large capital facilities and expanding into the international markets. They will constitute the competition of the future.

The dried market offers the potential to produce a wider range of herbs for direct sale to importers, re-packers, caterers, institutions and food processors. However, buyers require bulk quantities (a minimum of 500-1000 kg/month, or more in some cases; often the buyers' requirements will not be for a monthly delivery, but will vary over the year), and are prepared to pay only $2-5/kg, hence growers will need to develop cost-effective broadacre, mechanised production of top quality crops, and process to specifications if they are to compete. The capital intensive nature of this production chain would be more suited to co-operative ventures or established agricultural enterprises.

Currently, requests from these large buyers are largely unfilled due to insufficient supply.

There is some potential for marketing growers' own brands to speciality outlets, but price competition from established companies may be difficult to overcome.

Other potential markets for dried culinary herbs include herbal tea blends (this market suffers from fluctuating interest, but is currently being investigated by a number of growers and grower groups and would be easy to oversupply), cosmetic manufacturers, and craft material suppliers through direct sale or creative marketing.

Growers should be flexible when thinking of marketing as most `culinary herbs' have a variety of end uses other than culinary, and may be further processed to other products such as pesto (basil).

Regardless of which market they choose for their product, growers must focus on quality, continuity of supply, quantity (where appropriate) and price. Also, it is important to implement and adhere to QA codes of practice to both establish and maintain a commercial advantage.

Success in the herb and spice industry will depend on identifying and supplying niche markets, as well as maximising opportunities for value-adding and downstream processing. Broadacre mechanised production is essential to control costs if growers are to effectively compete for available industrial markets.

Markets and marketing issues

Production requirements

Herbs will grow in a wide variety of soil types and climatic zones. Some of the herbs listed in Table 1 (not available in this html version) are grown from the frost prone, long cold winter of the New England Tablelands, to the full tropics of the eastern coastal strip. Herbs can be grown anywhere that rainfall is sufficient to allow good growth, or where irrigation water is available.

Generally, it is best to avoid heavier clay soils, as wet soils for extended periods can result in the herb dying from various root rot diseases. Root crops can be more easily harvested and washed if grown in a light soil.

To provide adequate financial returns, herbs need appropriate irrigation to promote sufficient growth for consistent production. Both overhead watering and trickle irrigation are suitable, however under mulch, T-tape is more efficient in terms of water use, and causes less soil splash contamination on the plants. No detailed work on water requirements has yet been published for herbs.

There are no specific topographic requirements for the listed herb types, although a gentle slope will allow good drainage and prevent any wet feet problems. Choose the aspect of the herb field with care, avoiding hot dry prevailing winds, and cold wet southern slopes.

Varieties

Consistent best sellers in fresh culinary herb sales are parsley, basil, thyme, chillies, garlic, dill, mints, oregano, rosemary and coriander leaf. The demand for other herbs varies with location, ethnicity of the population, trends, etc. Growers need to be aware of new and emerging trends and plant accordingly. A much larger range of dried culinary herbs is required.

Propagation material (seeds and plants) may be available through general and specialist seed suppliers and propagation nurseries, but growers need access to strains with commercially-superior flavour and appearance, and suitable growth habits and patterns. Long-term commercial advantage will be gained from on-site varietal selection and ongoing breeding programs to increase yields, and to ensure composition is to the buyer's specification. No seed companies in Australia are undertaking this work, but growers can import planting material (most easily seed) from reputable specialist companies such as Richters, Goodwood, Ontario LOC 1AO, Canada (email: orderdesk@richters.com; Web: www.richters.com) [Sole Australian agent—Eshcol Springs Nursery, PO Box 61, Gingin WA 6503].

Herb seedling production is difficult, as the germination rates are often very low, and establishment times can be very protracted (remember that herb types have not been selected for the crop characteristics of rapid and consistent germination, and speedy early growth). However, better field establishment can be achieved with seedling transplants for most species than with direct sowing. If you intend to rear your own seedlings (be warned this is a major undertaking in itself), take these considerations into account and conduct germination tests before you sow, and oversow if the rates fall below 80%.

Direct sowing of some plant types can be successful, and will significantly reduce establishment costs of the crop.

Agronomy

The worst problem for most growers in the production of their crops is weed infestation. Consequently, good early ground preparation is essential. Starting the year before your planned herb crop, prepare a seed bed with dedication and sow a leguminous crop suited to your district (see your local agronomist for plant selection and growing techniques). The better the establishment and growth of this green manure crop, the longer the weeds will be held at bay in the herb crop.

Spray kill or plough in the green manure crop before it sets seed, and sow the herb seedlings into the mulch. Do not let weeds set seed in your crop area or nearby. Mow any areas that threaten to set seed and contaminate the crop area. Other weed control strategies include chemicals (none registered for use in herb crops), weed cultivators (the crop must be precision planted), and hand chipping or flame weeding (which may not be available in your area, and will cost hard cash).

Weed mats are recommended, particularly for perennial crops. These can be cost effective even for areas up to several acres. Woven weed mats last for years, are reusable, and allow free exchange of gases and moisture for good soil flora and fauna survival. They pay for themselves by reducing hand-chipping costs within two seasons. Furthermore, they eliminate soil splash contamination on the herb plants.

The young crop needs to be adequately watered to establish well. Weed and insect status should be checked daily during the establishment phase, and continued frequently throughout the life of the crop. Weed problems should be tackled immediately as the job gets harder as the weeds get bigger. If they are allowed to set seed, you have increased your workload for years into the future.

Fertiliser requirement trials carried out at the University of New England suggest that a level of 20 kg P/ha and 40- 80 kg N/ha are needed for optimal herb growth. This is, however, a very generalised statement taking little account of plant type and inherent soil fertility.

Minimal equipment is required for small scale, intensive production. However, to maximise efficiency in broadacre production, normal cultivation equipment such as a Class 2 tractor with hydraulics, cultivation gear or a rotary hoe, weed scuffler, harvester (these are mostly still being developed in Australia and are not yet generally available), trailers, bins etc. for cartage of the harvested crop, are needed. For dried herb production, a forced air, temperature/humidity controlled batch or continuous dryer is essential. If producing your own seedlings a vacuum seeder would be useful, and a controlled environment plastic or glass house.

Pest and disease control

Insect pest problems have so far been relatively minor and transitory, involving species such as green aphids and Helicoverpa (Heliothis) grubs. (Chillies are prone to attack by a variety of insect pests.) This may not continue once larger areas of monoculture crops are grown. Mints and basil can suffer from rust problems in wetter areas.

Harvesting and handling

Washing the herb either before or after harvesting may reduce soil contamination. This can be critical if you have used organic fertilisers such as animal manures. The harvested material must be cooled quickly for both fresh and dried herbs. It is preferable to harvest in the cool of the day to minimise heating, but it is essential that material to be dried is transported and loaded into the dryer within about four hours, or cooled to 4°C as quickly as possible if destined for the fresh market. Serious microbial deterioration will set in if a longer time is taken. The dryer must dehydrate the product quickly at a reasonably low temperature—generally around 40°C, to prevent loss of volatile oils. If destined for the fresh market, the herb will need to be bundled in suitable bunches, or if dried, it will need to be rubbed to remove excess stalks, or sifted, or ground. The buyer's specifications should be your guide.

Economics

Table 2 (not available in this html version) gives the establishment costs and a gross margin calculation for an oregano crop in the temperate zone of Australia. The calculations are based on an area of 1 ha with a plant population of 100,000.

Key contacts

Kim Fletcher
Focus on Herbs Consultancy
P.O. Box 203
Launceston, Tas. 7250
Phone/fax: (03) 6330 1493
Email kim@vision.net.au

Shirley Fraser
Division of Agronomy and Soil Science
University of New England
NSW 2351
Phone: (02) 6773 2962
Fax: (02) 6773 3238
Email: sfraser@metz.une.edu.au

Clarrie Beckingham
NSW Agriculture
P.O. Box 1386
Bathurst, NSW 2795
Phone: (02) 6333 4377
Fax: (02) 6333 4491

Laurie O'Donnell
New England Natural Products Pty Ltd, Gostwyck Road
Uralla, NSW 2358
Phone/fax: (02) 6773 3627

Howard Rubin
Herb Farms Australia
P.O. Box 6099
South Lismore, NSW 2480
Phone/fax: (02) 6629 1057
Email herbs@om.com.au

John Penninger
Hunter Valley Herb Farm
P.O. Box 117
Merriwa, NSW 2329
Phone: (02) 6548 2314
Fax: (02) 6548 2522

The Spice Association of Australasia
P.O. Box 104
St Leonards, NSW 2065
Phone: (02) 9439 3750/3790
Fax: (02) 9438 3729

Key references

Fletcher, K. 1997. Australian Herb Industry Resource Guide, Third Edition. Focus on Herbs, Launceston.

Fraser, S.A. 1991. `Herbs'. In: New Crops—agronomy and potential of alternative crop species. Eds. R.S. Jessop and R.L. Wright. Inkata Press, Melbourne, pp 63-70.

Fraser, S.A. and Whish, J.P.M. 1997. A Commercial Herb Industry for Northern NSW. A Final Report prepared for RIRDC. RIRDC Research Paper Series No 97/18.

Hälvä, S. and Craker L.E., 1997. Manual for Northern Herb Growers. Herb, Spice and Medicinal Plants Press, Amherst, MA. [This a northern USA publication.]

Hornok, L., 1992. Cultivation and Processing of Medicinal Plants. John Wiley & Sons, Chichester, U.K.

Whitten, G., 1997. Herbal Harvest: commercial production of quality dried herbs in Australia. AgMedia, East Melbourne. [For biodynamic and certified organic production on smaller field sizes.]

*About the authors