| Herb Buyers |
Answered by: Richard Alan Miller
Question from: Steve
Posted on: August 30, 1999
Is there any place that I can get a list of large herb buyers in the U.S. and overseas? I am growing in the midwest and have an interest in a plantation in China. I would like to find buyers for St. Johns Wort and Echinacea. What would be a fair market price?
Of course, I would recommend a review of my previous statements made on these three questions. In review, however, lets begin with your need for a "large list of buyers." There are six primary buyers Europe for the two crops (Echinacea and SJW), and then they sell to probably an additions two hundred manufacturers (or more).
Most of these buyers are listed in my "updated and expanded" edition of The Potential Of Herbs As A Cash Crop (Chapter 9, Bulk Marketing), available from Richters. There are sources where I get my information, of course, including Chemical Marketing Buyers OPD, their Annual Buyers Guide. Other good resources might want to include the new Health Supplement Retailers’ Manufacturer Listing (www.hsrmagazine.com)
Europe, of course, is where the bulk of these two crops (Echinacea and SJW) are sold now (plus North America), although that could change overnight. China does not have any money right now, so your first bet would be European markets, and their manufacturers. Right now, I’m waiting for China to conclude a deal that began in February...
Europe is a strange place to market. Buying is one thing, selling is quite another. If you are not careful, one can lose everything on a technicality (that includes your money despite "iron-clad" letters of credit). Remember, they "woke up" six hours before we do. Further, if you do something inappropriate, you can become "black listed" without even knowing why.
Rule One: Stand in line, go to the primary buyers first. Many of the larger buyers want to know you will be there for the next six years, so they won’t buy from you for the first two -- just checking out your "stamina." It took me more than 15 years to develop a working relationship with Europe. Asia took even more time, and they don’t have any money to pay.
As stated earlier, North America has some serious overproduction problems with both Echinacea and SJW this year. Almost every country in the world has entered that arena, and their delivery dates are not the same as yours. This means that for both these crops, manufacturers and primary buyers hold full inventories. Now what would happen if you offered your crops at "bargain prices" or even "at a loss" to the smaller manufacturers?
This is how farmers loose control of their niche crops, and they become dominated by bankers. You don’t want this to happen, as it already has to Echinacea purpurea. You then would not be able to sell at any price, and once you did again, thate price would be dictated to you. And, like wheat and barley, it would not be based on your production costs.
Most farmers would rather sit on their crop, or even burn it, rather than see this happen. It is better to take an initial loss, count it as "tuition" in going back to school, and then attempt to start over with advisers (Richters and myself), guiding you toward something that makes sense. Too many of you have gone toward what the "media" said was happening. They only follow what happened, not what might happen.
The herb and spice trade has got tremendous possible potential for the new and diversified farmer. But, it is limited, and needs more careful thought that just what "you think" is going to happen. All serious "wagon trains" have lead scouts who have already "been there." Who are you using? And, why? Time for some due diligence.
I don’t think anyone will be able to sell Echinacea purpurea this year, and most have gone into now overproducing E. angustifolia (in the next two years). SJW’s markets are off 2/3 of what they were last year. And while that market is still "open" with a modest annual growth curve, many new growers plan to show crops next year. Experienced farmers should be thinking ahead, not following "The Blue Concourse," like K-Mart shoppers.
The basic first rule in this arena for new farming ventures is diversification, not bulk production. Black cohosh and new flavoring materials (like anise hyssop) have good futures, but again, what happens if they are also overproduced? Some products, like sesame seed and coriander still hold shortages and are safe bets. Comfrey leaf, as a animal food suppliment, is wide open for future possibilites.
Again, however, who’s doing your marketing for when you plan to show production? A good business plan always includes a marketing plan. That plan should also always include current and future projections, needs, and growth statements that make sense. A business plan is only as good as what is put into it. It’s not what you do, but how you do it that leads toward true goals. How else can I help you?