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A Publication of ATTRA - National Sustainable Agriculture Information Service • 1-800-346-9140 • www.attra.ncat.org

By Katherine L. Adam NCAT Agriculture Specialist © NCAT 2005



Material 3

Marketing and Economics S

Production 9

Integrated Pest Management (IPM) 11

References 13

Further Resources 13

ATTRA - National Sustainable Agriculture Information Service is managed by the National Center for Appropriate Technology (NCAT) and is funded under a grant from the United States Department of Agriculture's Rural Business-Cooperative Service. Visit the NCAT Web site (www.ncat.org/agri. html) for more information on our sustainable agriculture projects. NCAT

This publication looks at marketing channels for and assesses the economics of small-scale organic production of fresh-cut herbs. Certified organic production differs from conventional methods chiefly in fertility management and pest control. Propagation methods differ for annuals and perennials. For information on producing potted herb plants, see the ATTRA publications Sustainable Small-scale Nursery Production and Plug and Transplant Production for Organic Systems.

Lavender. Photo courtesy www.sxc.hu.

Strictly speaking, there is no longer a greenhouse herb industry in the U.S.(1) Commercial-scale greenhouse production is simply not economically feasible for fresh-cut herbs, when the entire U.S. market can be supplied from outdoor operations in favorable climates and from foreign greenhouse producers. Two large organic herb farms now supply the Seattle produce terminal serving the Pacific Northwest. Neither USDA's Agricultural Marketing Service nor USDA's National Agricultural Statistics Service collects greenhouse herb information as a separate category. AMS collects information on fresh-cut herbs sold at 16 national terminal markets, and NASS collects information on organic vegetable production. Potted plants are lumped together with other nursery production (mostly in greenhouses). The hope raised 10 or 15 years ago that local growers would be supplying large amounts of fresh-cut herbs to the restaurant trade has been undercut by developments in transportation and global marketing systems, making even USDA-certified organic herbs readily and cheaply available from elsewhere.

Small farmers who have greenhouses grow herbs along with winter salad greens,

Herbs Marketing

Lavender. Photo courtesy www.sxc.hu.

potting plants, vegetable starts, and ornamentals—some for direct market sales and some for home use.(2) Direct-marketed herbs are more likely to be sold as potted plants than as fresh-cuts. In parts of the U.S. east of California, fresh-cut herb sales make up only a minor portion of direct market sales. The potential for local sales of fresh-cut herbs to upscale restaurants has been largely overstated. Chefs can now have whatever organic herb they want within 24 hours, at prices lower than those of 10 years ago, although some do frequent their local farmers' markets.

A 45-acre Tilth-certified herb farm, Herbco, accounts for most of the organic herbs coming through the Seattle produce terminal. (Organic herb sales at selected terminals

Related ATTRA Publications

Enterprise Planning

Sustainable Small-scale Nursery Production

Agricultural Business Planning Templates and Resources

Keys to Success in




Herb Production for Organic Systems

Direct Marketing

NCAT's Organic Crops Workbook

Organic Marketing Resources

Organic Certification and the National Organic Program

Transitioning to Organic Production (SAN publication)


Season Extension Techniques for Market Gardeners (extensive information on walk-in hoophouses)


Seed Production and Variety Selection for Organic Systems

Suppliers of Organic and Untreated Seed (Web-only database)

Sources of Organic Fertilizers and Amendments (Web-only database)

are now reported by NewFarm.com.) The supply is supplemented by Jacobs Farm— growing on 300 certified organic acres at Pescadero, California. Working with a network of certified organic growers in Baja Sur (Mexico), Jacobs Farm advertises on its Web site that it can supply any quantity of any temperate or tropical herb to anywhere in the U.S. or the world. Operations are certified by Washington Tilth. Jacobs Farm, as well as CCOF-certified California growers, supplies organic herbs to Melissa's, a wholesale produce vendor to whole foods chains and co-ops around the country.

Technology and industry practices have also leaped forward. Heated wood-and-glass greenhouses are things of the past. Using the newer plastic products, walk-in hoophouses have become the industry standard for U.S. greenhouse crops. See ATTRA's very detailed publication about hoophouse production entitled Season Extension Techniques for Market Gardeners. Hoophouses generally do not require heat, but supplemental heat can be provided. Acres of state-of-the-art, climate-controlled, glass-and-steel greenhouses in Mexico are providing most organic herbs sold in the U.S., according to Tilth and USDA/NASS. Occasional sales at farmers' markets and through CSA baskets account for the rest.

In the past farmers have been advised to "research any niche market carefully" before investing. Finding reliable production statistics and economic information is admittedly difficult, however, for a limited-resource land owner, especially one without Internet access. To assess the potential market, do a risk-benefit analysis, and find a viable niche requires evaluation of statistics buried in government reports and produce industry sites, picking through Web pages, and finding privately held information. Recent attempts by the states of New Jersey and Montana to secure a place for their farmers in supplying herbs on a large scale (specifically greenhouse production in New Jersey) have not been successful. While New Jersey herbs showed up for a while in the late 1990s in East Coast terminal market reports, they have been replaced by low-cost imports. The primary obstacle to greenhouse herb production in the U.S. is low-cost competition. At present, the only profitable greenhouse winter vegetable crop in the U.S. is tomatoes.(1)

The ATTRA publication Sustainable Small-Scale Nursery Production provides an in-depth overview of production and marketing of potted perennials. Many of the finer culinary herbs—especially the Mediterranean group (sage, marjoram, Greek oregano, the savories, thyme, rosemary, French tarragon, and lavender)—are perennials raised from cuttings. Purely ornamental varieties of these herbs exist, as well. Potted perennials raised from seed, rather than cuttings, include common lovage, alliums (such as garlic chives), fennel, and some of the Mexican herbs. One or two wholesale nurseries supply the entire U.S. nursery and garden store industry. Organic potted herbs are a seasonal item found at farmers' markets and a few specialized venues. The status of organic production of ornamentals is still under review.

Organic production of annual herbs such as basil is similar to that for most vegetables. For more information, see the ATTRA publication Organic Crops Production Workbook or the research studies summarized in the ATTRA publication Herb Production for Organic Systems. Most annual herbs have short enough growing seasons to be raised in beds outdoors for local markets. Some are started under cold frames, row covers, or hoophouses.

The International Federation of Organic Agricultural Movements (IFOAM) has initiated a Participatory Guarantee System in the U.S. under the name "Certified Naturally Grown."(3) This will benefit small, local growers. Locally Grown® is another new certification that does not entail the expense of organic certification.(4)

Fresh-cut organic herbs at farmers' markets generally sell for 4 to 10 times the price, by weight, of bulk supermarket herbs, but demand is limited. Vendors hesitate to bring more than a few bunches, for fear they will not sell. The strategy of offering pre-ordering to regular customers via e-mail shows promise and has been tried by a Georgia grower.

Anyone considering raising herbs and sea-soners in a greenhouse should do a cost-benefit analysis. Not everything can be raised anywhere at a reasonable return for the producer. The food and agriculture industry is changing very rapidly. For more help with enterprise planning, please request the ATTRA publication Agricultural Business Planning Templates and Resources.

ATTRA's greenhouse publication series (see list at right) provides in-depth discussions of fertility, pest control, and other topics from an organic standpoint. Additional resources for greenhouse herb production are listed at the end of this publication. The New Organic Grower, by Eliot Coleman, has a chapter on "winter gardening" that provides information for USDA hardiness Zones 3 to 6 on technologies helpful in modifying a home-garden system for commercial production.(5)

Producing potted herb plants, plugs, and starts is part of the nursery business. See the ATTRA publications Plug and Transplant Production for Organic Systems and Sustainable Small-Scale Nursery Production. Potted plants are typically perennials, often Mediterranean herbs intended for permanent pot culture or for transplants that may serve both practical and ornamental uses in the garden.

Dried herbs found in grocery stores do not come from greenhouse production, but are field raised and sometimes wildcrafted outside the U.S. It is not economical to use controlled atmosphere space to produce dried herbs. The transcript of a presentation by Alan De Young, who represents the largest industrial herb producer and processor in the U.S., at the Fifth (and final) Richters Commercial Herb Growing Conference, Ontario, Canada, may be found in the proceedings of that meeting. It is the best account, by far, of contemporary Good Agricultural Practices (GAP) and Good Manufacturing Practices (GMP)—including certified organic—for herb products.(6)

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