making lavender pay
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MAKING LAVENDER PAY. DETERMINING THE COST OF PRODUCTION ( doing the math ). 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? - PowerPoint PPT PresentationTRANSCRIPT
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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
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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
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LET’S LOOK AT 2 EXISTING BUDGETS
Colorado State University
British Columbia
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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
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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
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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
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STARTING POINTS WILL VARY
Sometimes it is useful to know how large your zero is. ~Author Unknown
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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
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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
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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
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THE TRUTH BEHIND THE NUMBERS
Mathematics are well and good but nature keeps dragging us around by the nose.
~Albert Einstein
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THAT’S MY STORY AND I’M STICKING TO IT