Rural Industries Research & Development Corporation

The New Rural Industries
A handbook for Farmers and Investors

Welcome to the GERALDTON WAX AND RELATIVES chapter of RIRDC's major new publication (contents page here) on nearly 100 new rural industries.

Geraldton wax and relatives

Introduction

Geraldton wax (Chamelaucium spp.) is Australia’s leading commercial wildflower. It has reached the top 20 plant species in terms of volume sold in Europe, and is on the brink of achieving ‘commodity’ status in the international cut and potted flower market. Geraldton wax has achieved this status because of its productivity, vase life, and suitability as a feature-filler flower in arrangements and posies.

However, Australian exports of Geraldton wax are less than 10% of world total production, and world production of floricultural plants of Australian origin constitutes only about 1% of world production of all flori-cultural products. The challenge for the Australian industry is to capture market share.

The major producer of Geraldton wax is Israel (about 80 million stems/year) which sells into Europe principally, but increasingly into other markets including Japan. Production has been reported to be increasing in California, Mexico and South Africa, while Peruvian material was prominent in the market during June and July 1997.

The key strength of the Australian industry is its location as a southern hemisphere producer in the emerging Asian economic trading zone. This is an advantage for producers of perishable and seasonal products like Geraldton wax because perishability combined with location give a near exclusive market window into this zone. As the holder of the bulk of the genetic resource Australia is also best placed to develop new varieties as the market matures and consumer demands become more sophisticated.

A weakness is that the export floricultural industry is small by world standards and lacks significant product diversity (it is perhaps too focused on native plants). The industry has no national strategy for marketing and competing in a global marketplace and commits few resources to capitalising on our capacity for research and development. Our market access costs are still too high by international benchmarks. While some significant restructuring is occurring in the market chain to Japan, the industry will need to continue to address this issue if it is to double sales by 2002. Additionally, and importantly, our on-farm processing and local off-farm costs are also too high by international standards and few would be profitable at the F.O.B. values achieved by Israel (Fig. 1 - Not available in this html version).

Markets and marketing issues

Australian-produced waxflower is marketed principally to Japan, the USA (Los Angeles primarily) and Europe. Local sales are growing strongly. There is increasing diversity in the way the product is marketed as the industry strives to find more economical and attractive marketing strategies. Some are experimenting with marketing of cellophane sheathed bunches directly to supermarkets. While the standard has been bunched, 800 mm stems for the Japanese markets, and 600 mm stems for the American market, in boxes of a total of between 120 and 180 stems, mini boxes (inner boxes) containing about 50 stems are becoming the market standard in Japan.

Adding value is essential while Australia remains poorly competitive in its costs of market access. This may be through new varieties, new market windows, new outlets or new ways of presenting the flower to the market.

Infrastructure for cool storage and refrigeration in the marketplace and in the home is much lower in Asia than in ‘the West’ and there is a greater reliance on daily purchases for fresh, perishable products. In this environment, small packages seem to make good sense. Nevertheless, ‘super’ and ‘mega’-markets are developing in Asian countries and they have specific product requirements which may be closer to those of the American supermarket trade than the traditional Japanese auction house. Only those producers and export agents with access to long lines of uniform product will have access to this emerging direct to market trade. The small producers will be restricted to niche marketing and the auction house route, with the attendant high market access costs through the several layers of commissions and entry fees. The fixed price market is now only a small component of the total trade, but growers with a particularly attractive line may still be able to negotiate a delivery price.

Achievement of international benchmarks in market access costs will require a more direct access to the market and more efficient packaging practices, such as those practised by Israeli growers. This will require larger package units, denser packaging and the development of practices to minimise heat build-up, such as assured maximum time to market guarantees and modified atmosphere packaging to reduce temperature build-up through respiration. It may also require a market re-packaging centre to break the package down to end-user-preferred specifications. Such infrastructure cannot be justified on the basis of Geraldton wax alone.

A key factor in successful marketing is understanding the legal market entry requirements, especially phytosanitary certification, which is particularly stringent in Japan. Failure to meet those standards leads to the imposition of high surcharges and a loss of product quality through extreme disinfestation treatments. Phytosanitary practices must begin in the field to ensure that harvested product has as low a level of infestation of insects and pests as possible.

Flowers display a relatively high elasticity of demand, as is demonstrated in Figure 2 (price elasticity of demand curve). More recent data can be found in RIRDC Research Paper No
97/41 (see Key references).

Waxflower began as a novelty product but has now moved to commodity status and thus can expect to gain prices no higher than those of other mainstream products such as carnations, roses, gypsophila and statice. With the maturing of the market, there will be continuing pressure to force the opportunistic grower out of the market, and only those who can be profitable while competing at this level will continue to succeed.

Production requirements

Chamelaucium is endemic to Western Australia and occurs naturally in the South Western Botanical Province. The genus comprises about 31 species and is a member of the Chamelaucium alliance, a grouping of closely related, small, floriferous woody shrubs of the family Myrtaceae, most of which occur or are endemic to south-western Australia: Verticordia, Darwinia, Scholtzia, Actinodium and the eastern Australian Thryptomene are potentially the most important horticulturally.

Wax flower and most of its relatives are intolerant of frost (screen temperature less than 0°C) and warm humid conditions, and are highly susceptible to grey mould (Botrytis cinerea). Most species in this group are susceptible to root rots such as Phytophthora, Pythium and Fusarium: regular spraying with a proprietary spray such as Fos-Ject will usually keep them at bay. They are well adapted to cool wet winters and hot dry summers (coastal Mediterranean type climate). They generally prefer neutral to acid soils which must be free draining. Some new selections and hybrids are showing promise of being better adapted to frost and/or alkaline soils. The plants respond well to irrigation, and economic production will depend on irrigation to at least 70% of pan evaporation. The areas that meet these requirements are indicated in a general way on the accompanying map, though local conditions will always be important in determining success.

Varieties

‘Purple Pride’ remains the most popular variety in Japan though white varieties predominate in Europe. Purple Pride is floriferous, productive, has little on-growth present at flowering and has a good vase life. The major white variety, ‘Alba’, tends to be too vigorous and produces significant on-growth unless water and fertilisers are managed carefully. It is available for only a short period of the marketing season and there remains a need to produce a series of ‘Purple-Pride’-like cultivars with diverse flowering times (Israeli nurserymen have reputedly selected an autumn flowering sport). Purple flowers rarely occur in the wild and nothing is currently known about the genetics of flower colour, except that it is complex. Most naturally occurring plants bear flowers that are various shades of pink.

There are now about 50 registered cultivars in Australia and the trend is towards hybrids rather than wild-type plants such as ‘Purple Pride’, ‘Alba’, ‘CWA Pink’ and ‘Mullering Brook’. Newly available hybrids include ‘Painted Lady’, ‘Eric John’ and ‘Esperance Pearl’.

It is important to test grow plants on your property to assess their productivity, form and flowering date. These factors vary markedly from site to site, even over relatively short distances. Commercial success will depend on making sound choices at the outset. A continuing cultivar assessment program should be a part of normal practice. Production at a time when few others of a particular type of flower are available will have a marked bearing on profitability.

Small specialist growers may be able to vary the time of flowering to a degree through manipulating daylength (exclude light to shorten the day length to bring flowering forward, or use artificial light at night to delay flowering). These methods are practised to a degree in Israel but we have no practical experience in Australia. Also, some varieties respond well to plant growth regulators which can increase flower number and delay flowering.

Agronomy

Site selection and preparation are important. In regions and localities subject to radiation frosts (defined as a screen temperature of 2°C or less), care should be taken to plant on higher ground or on slopes that allow free air drainage to minimise frost risk.

Geraldton wax is subject to soil-borne pests and diseases, and if areas are to be replanted over successive seasons care should be taken either to fumigate the soil or to rest it and plant an appropriate cover crop that will not be a host to soil-borne pests and diseases. Crops that have been recommended include cereal rye, tagetes and a brassica crop. Geraldton wax, and presumably its relatives, respond well to added nitrogen and the use of a clover or sub-clover cover crop may be of benefit (though avoid types that produce burrs which may contaminate the crop). Cover crops may need to be avoided in frost-prone areas because they act to insulate the soil and increase frost risk (though with a herbaceous plant such as Geraldton wax, the use of traditional passive methods of frost control may be of minimal value). The planting of cereal rye to protect young plants over summer during the establishment phase is recommended, or at least the establishment of some form of wind protection.

A nitrogen and potassium fertiliser regime of 15 to 30 kgha is recommended, rising to
80 kg/ha in year 4. In areas that are alkaline, an iron chelate may have to be added and other nutrient deficiencies dealt with as they arise (eg. calcium, zinc and copper in Western Australia’s acid sands). Geraldton wax does not appear to be intolerant of phosphorus, but neither does it respond strongly to its application. Fertilisers are best applied by fertigation.

It is vital that an intending grower coordinate with his nurseryman to ensure that plants do not become root-bound before planting. Commonly, plantations can suffer losses of as much as 1/3rd of their plants in years 3 to 4 through poor nursery practice or holding the plants before planting out.

Planting can be done at almost any time of the year provided there is a good irrigation system. The ideal time to plant is autumn and this will lead to a small production in the second year and nearly full production in the third. Vigorous cultivars such as ‘Alba’ and ‘Purple Pride’ are usually planted in single rows at 2 m spacings and a 4 m inter-row, while with less vigorous types the spacing drops to as little as 1 m between plants and 3 rows with an inter-row spacing of 4 m. It is probably best to work to a compromise standard so that irrigation infrastructure can be used for more than one crop without modification.

Good husbandry means good weed control, beginning before planting (eg. with a pre-emergent spray such as Simazine™). As the plants mature, shed leaves and shading will prevent weed growth under them. Grasses may be controlled with Fusilade™ but care should be taken especially with more generic herbicides which can severely damage waxflower. A hooded, low pressure sprayer is recommended. Sprays that have been used successfully include Oxadiazone™, Metribuzin™ or Sethoxydim™.

Pest and disease control

Pest and disease control form a part not only of the production and management system but also of harvesting and processing. Harvested material must be free of insects, spiders, snails and other minor pests that may constitute a quarantine problem. Root diseases can be a major problem, Phytophthora and Fusarium in winter, and Pythium in summer. These can be minimised through good hygiene and ensuring that plants are purchased from a registered nursery with a good standard of hygiene. Well-aerated and free-draining soils are an aid, as is the development or use of soils with a high organic carbon content, because these factors favour beneficial, as against pathogenic organisms. Even with good practices, most growers find it necessary to regularly apply Fos-Ject™ or equivalent to maintain plant health.

From budding onwards and especially during or following cool and wet weather conditions likely to promote the spread of Botrytis, growers should apply a rotating sequence of fungicides selected to control this disease (eg. Rovral™, Bravo™ and Octave™). Alternaria can also be a problem on leaves and is best controlled with Mancozeb™. Growers should keep in touch with agricultural chemical companies and departments of agriculture for current recommendations because of the regular changes to legislative and health requirements.

Gall wasp is a problem in certain regions, eg. Queensland, California and recently Israel. It is endemic in Western Australia but presumably is controlled by natural predators. Use of natural predators is reported to be effective in Queensland, and methods of chemical control have been of limited success.

Other insects such as thrip are a serious phytosanitary issue and must be controlled in the field with Mavrik™. Carbaryl™ can be co-applied if spring beetles are also a problem. Ambush™, a synthetic pyrethrum, or Carbaryl™ can be used to control leaf webbing larvae, while wingless grasshoppers and Rutherglen bug have been controlled with Maldison. Baiting is probably the best method of controlling wingless grasshoppers.

Harvest, handling and postharvest treatments

Most of the costs of production occur from harvesting onwards and it is important to minimise these to achieve economic efficiency. As a rule of thumb, every time a stem is handled a cost equivalent to the cost of production to harvest is added. The way in which this is managed will depend greatly on the scale of production.

Current practice for a family operation is to pick into the postharvest solution (1), grade and bunch (2), cool and then dip in a pesticide and possibly a fungicide (3), drain (4), box (5) and store (6) for transport. A large commercial operation may use a different sequence depending on the processing chain, and the postharvest treatment may need to be optimised according to the destination (eg. Europe vs Japan).

Much of this is carried out under roofed conditions adding significantly to the overall capital costs. Large operations can mechanise much of this but smaller growers will need to give careful thought to the management of the overall process to minimise costs without loss of quality. Some growers bunch directly thus eliminating one step but adding to the care that needs to be given to stem selection when picking. For the smaller and new growers, the best practice may be to contract all of the postharvest operations to a contractor or marketing agent.

Some growers are now experimenting with picking dry and avoiding the cost of transporting in water or postharvest solution and improving postharvest pulsing with silver thiosulphate (STS). Our experience is that this may in some circumstances marginally reduce quality while under other circumstances it has no effect. More research is being done to assess these factors along with other harvest and postharvest issues. Flowers are normally harvested at 30% of flowers open. This is not easy to assess and those new to flower production should begin by counting flowers so as to harvest at the right stage.

Postharvest treatments include dipping in an insect and miticide (eg. Deltamethrin™ or Cislin™) plus a fungicide (Rovral or Benlate™ or Iprodione plus Mancozeb) and a wetting agent (eg. Agral 600). Flowers may also be treated with STS by allowing the flowers to stand in a solution for 15 to 30 minutes depending on conditions. This protects the flowers against ethylene. Silver is regarded as a dangerous heavy metal and is being banned in some countries. It is likely to be replaced by new treatments soon.

Economics of production and processing

The economics of production are very much an enterprise level issue, varying widely on the basis of scale of production, range of products and cost of market access. Market access costs are minimal for a road-side operation but increase to as much as five times the production cost for European and eastern seaboard USA markets. The major portion of trade is through established market channels, through local agents to freight forwarders to import agents, auctions and onto the retailer. In this long market chain 2/3rds of the auction price go to pay costs external to Australia. Some marketing agents are taking advantage of the Internet to direct market to individual florists, both here and in America, while others are marketing directly to individual florists, garages and general stores. Wholesale flower markets are being established in many countries and will establish benchmark prices and assist in establishing an integrated focus on flowers, regardless of the nation of origin of the genetic resource. This will benefit the Australian floricultural industry which must diversify to remain viable and internationally competitive.

A framework for a viable business though a detailed farm and marketing model is available from the University of Western Australia. Table 2 (not available in this html version) sets out some indicative costs.

The owner–operator partnership (e.g. family) specialising in wildflowers should aim to select a range of products (ie. crops complementary to waxflower) that will build to a unit that will be producing for 9–10 months of the year, leaving time for routine annual maintenance and relaxation. The scale should be such that the family can manage, harvest and distribute all of their production without calling on external labour. Such an operation should aim to be profitable on about 1500–2000 bunches per week throughout the production period. This will enable the capital cost to be spread over the range of commodities, give some protection against seasonal losses in a few flower types and ensure full employment of the family unit. This is a better model than aiming to produce a few lines at a large scale and then employing labour to manage the workload during harvest. The scale of production will be much larger if one chooses not to process and pack because of the labour-intensive nature of these, but the unit will forgo the price advantage available through niche marketing and direct sales to the public and to individual businesses. A 4 ha, intensive field grown flower operation could be a full-time activity for such a unit, depending on the crops selected.

Key contacts

Professor John Considine
Plant Sciences
Faculty of Agriculture
Nedlands, WA 6907
Phone: (08) 9380 1783
Fax: (08) 9380 1108
Email: hortsci@uniwa.uwa.edu.au

Christine Salter
Primary Industries South Australia
Lenswood Centre
Swamp Road
Lenswood, SA 5240
Phone: (07) 8389 8806
Fax: (07) 8389 8899

Mr Digby Growns
Industry Development Officer (Floriculture)
Agriculture Western Australia
P.O. Box 110
Geraldton, WA 6530
Phone: (08) 9956 8555
Fax: (08) 9921 8016

Mr Neville Burton
Industry Development Officer
Extension Services Horticultural Science
Agriculture Western Australia
Baron Hay Court
South Perth, WA 6151
Phone: (08) 9368 3220
Fax: (08) 9367 2625

Key references

Considine, J.A. (1996). Market saturation studies for Geraldton wax. Wildflower Industry National Workshop, Perth. Reprinted as Technical Report No. 5, Plant Sciences, Faculty of Agriculture, The University of Western Australia.

FECA. (1997). A study of the Japanese flower market. RIRDC Research Paper No. 97/41. Canberra. Rural Industries Research and Development Corporation.

Manning, L.E., Considine, J.A., and Growns, D.J. (1996). Chamelaucium uncinatum (waxflowers), Family Myrtaceae. In: Native Australian Plants: Horticulture and Uses. Eds: Johnson, K., Burchett, M. Sydney, University of New South Wales Press, pp. 124–151; 299–302.

Karingal Consultants (1994). The Australian Wildflower Industry: a Review. Research Paper 94/9, Rural Industries Research and Development Corporation.

Acknowledgments

The author thanks the many people who contributed to this essay, especially Russell Klopper and Nina Foulkes-Tayler.

*About the authors