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Growing Garlic

SCALING UP & INVESTMENT DECISIONS


LETETIA WARE
Turban

Scale of production
How much is more important than when & how
Many growers lured by direct sale price of ultra-premium garlic
Premium pricing directly relates to small-scale, superior quality, hand finished, organic
AND as production volumes increase:
Income $/kg reduces as transition from direct to retail to wholesale
Planting intensity decreases (t/ha) as mechanical systems require wider row/bed spacing
Production effectiveness decreases (% of crop achieving retail quality)
Quality deteriorates (hand {yours versus hired} and machine impacts on $/kg)
Complexity of production, labour & contractor co-ordination increases
Operational cash demand & risk increases for 12-16 month crop return
Capital investment demands are high for high volume production
Creole

Scaling-up - Operational &


Investment plan
If you plan to SCALE UP you will need to plan how this will happen &
when:
When will you transition from selling Direct2Public, Direct2Retail, Wholesale

Your time (part/full time) additional labour (source), contractors


Field equipment tractors, bed preparation, planting, mulching, spraying,
weeding, irrigation, fertigation, harvesting
Shed equipment cracking, grading, storage, curing, cleaning, packaging

Cashflow & profit operational costs & cash availability

Capital investment buy/lease, funding source (profit/2nd job), ROI


Artichoke

Scaling-up
Why growers fail
If you FAIL to PLAN then PLAN to FAIL
Run out of time - wont have access to labour/contractors
Run out of money wont be able to finish the season
Runaway weeds will reduce/destroy crop yield
Disease or mineral deficiency will reduce/destroy crop yield
Insufficient water during bulbing will reduce crop yield
Excess water will cause disease, stem/basal/storage rot & remove skins
Late harvest will reduce bulb/skin quality & storage
Human/machine damage can be significant reducing yield
Poor curing/storage could dramatically reduce quality/destroy bulbs
Over estimating income from premium pricing
Failing to realise a FINITE LIMIT to volume sold direct to public or local retail
GARLIC GROWING MAP
LABOUR SALES CHANNELS
PAYROLL / TAX CONTRACTS
SUPERANNUATION MARKETING RELATIONSHIP MANAGEMENT
PAYG CERTIFICATES & SALES $/KG NEGOTIATION
CASHFLOW MANAGEMENT

HARV EQUIP CLEAN/PACK EQUIP


TRANSPORT CLEANING EQUIPMENT
HARVESTING
SEMI ACCESS CLEANING & TABLES/SECATEURS
TOPPING/TAILING
LOADING BAY PACKAGING BOXING/LABELS
TRANSPORT TO SHED
FORK LIFT PALLETS/WRAPPING & HANDLING
PALLETS

SOIL PREP
CURING & GARLIC LAND &
HARVESTING & BED
STORAGE GROWING ROTATION
FORMATION
SHEDDING
PALLETS
CONCRETE PADS TRACTORS & EQUIP
CURING TRAYS TRACTORS (HP?)
WEED & GARLIC SEED
FANS/HEATERS DISEASE MGMT PREP ROTATIONAL MANAGEMENT
DEHUMIDIFIERS PRIMARY TILLAGE
PALLET JACKS/LIFTERS SECONDARY TILLAGE
WEED EQUIP FERTILISER SPREADING
IRRIG/FERT EQUIP MULCH SHREDDING GREEN MANURE SEEDING
IRRIGATION PUMP IRRIGATION & SPRAYING EQUIP PLANTING
MAIN LINES FERTGATION SEED/BULB EQUIP
SUBLINES PLANTING EQUIP BULB GRADING
DRIPLINES BED FORMING BULB CRACKING
SOLID SETS/SPRINKLERS DIMPLER ROLLERS CLOVE GRADING
FERTIGATION PLANTERS SEED COATING
3 YEAR ROTATION ACTIVITY MAP with SALES & REVENUE
DEC JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV
2 REGIONS IN ROTATION (MIN 3 YR)
AREA 1 GREEN MANURE PLOUGH HOE PLANT INCORP
SOIL TEST
AREA 2 - FALLOW S-TYNE CULTIVATOR F=4WKS FERTILISE PLOUGH

PLANTING ROTATION (MIN 3 YR)


AREA 3 P1 ROTARY / S-TYNE CULT
BIO-STIM FORM BEDS CRACK TISSUE TEST
WRAP BEDS PLANT LAY IRRIG IRRIG
WEED WEED WEED

AREA 3 P2 FERT
HARVEST
CURE

SALES & REVENUE INCOME


CLEAN
SELL

MONEY
$$

CASHFLOW CHALLENGE FOR FIRST WHOLESALE ORDER (360KG) UNTIL FIRST PAYMENT
BED PREP GROW HARVEST CURE CLEAN SHIP PAYMENT = 12 16 mths
3 mths 6-9 mths 1 wk 4-12 wks 1-2 wks 1 wk 4-6 wks
Silverskin

Scaling-up
How to succeed
Create a SCALING-UP operational, financial & investment plan
GO SLOW - Set a realistic target for next 3 and then 5 years and plan toward this

Develop in stages with only 2-3 major changes per year

Understand your maximum local market sale volume (and realistic $/kg)

Identify your greatest pressure points (garlic growing map)

Maximise within your current land/equipment production before expanding

Do Lessons Learned each year and update your plan

Expect to make mistakes but make them small mistakes

In year 3 (of scaling up) give yourself a stabilisation year

Always have an Exit Strategy which doesnt cost you your farm
Standard Purple Stripe

Scaling-up
Factors - revenue
SCALE SMALL PRODUCER MEDIUM PRODUCER SMALL COMMERCIAL LARGE COMMERCIAL
<500m2 500-1000m2 1,000m2-25,000m2 2.5 Ha - 20Ha PLUS
Up to 300kg 300-800kg 800kg 15 tonne 15 t 120 t Plus

SELL 40-80 kg/mth (4mth) 80-200 kg/mth (4mth) 200 kg -3 t/mth (5mth) 3 t 50 t/mth (6mth)
Internet sales Internet sales Direct retail contracts Direct retail contracts
Farmers markets Farmers markets Wholesale Wholesale
F&V shops
Restaurant / caterers
Butchers

REVENUE DIRECT 2 PUBLIC DIRECT 2 RETAIL WHOLESALE (conventional peak to fringe)

U-Prem $28-30/kg $14-18/kg


H-Qual $8-13/kg
Standard $22-25/kg $10-14/kg $5-10/kg
L-Qual
Broken $3-5/kg

PART TIME COMMITMENT FULL TIME COMMITMENT


Rocambole

Scaling-up
Factors - revenue
Direct2Retail & Wholesale Income Planning how much & when
Talk to Local Retailers and Wholesalers (both in-state and next-state)
How many suppliers they have do they need/want more
When do they first get garlic, and when do they run out of garlic
When is their GLUT period and duration when is the lowest price
What garlic groups sell well and which ones do they want more of
What is the quality they need/expect
How does their buy price change over the garlic season
What are their payment terms
What is their return policy
What is your STORY how do you differentiate yourself from others
SMALL PRODUCER MEDIUM PRODUCER
<500m2 500-1000m2

Scaling-up Up to 300kg
40-80 kg/mth (4mth)
300-800kg
80-200 kg/mth (4mth)

Small to Medium Producer


This is still a manual stage where almost all activities are by hand MARKETING
Cracking, planting, mulching, weeding, harvesting, topping/tailing, cleaning & SALES

Curing in bunches hung in shed


Perhaps laid flat on wire trays with leaves still on (weather permitting)
CLEANING &
PACKAGING
Equipment investment limited:
Tractor & rotary hoe for bed preparation
Small pump & drip lines for irrigation CURING &
HARVESTING
GARLIC LAND &
SOIL PREP
& BED
STORAGE GROWING ROTATION
FORMATION
Usual pressure points as scaling from Small to Med Producer
(which highlight you operational/investment demands)
Cracking seed (1 FTE = 40-50kg/day . SEED/acre = ~500kg) WEED & GARLIC SEED
DISEASE MGMT PREP
Rolling dimpler to mark out planting rows & lines
Weed control: mulching shredding straw/silage & applying
IRRIGATION & MULCHING
Weed/disease: spraying equipment & experience (when/how often) FERTGATION (ORGANIC)
PLANTING

Harvesting: undercutter, avoiding damage & hand harvesting/bruising


Shed space: for curing / storing garlic (out of weather impact)
Curing: tying, hanging (wet harvest/avoiding rot) . When need mechanical fans/heater/dehumidifier
Cleaning: (1 FTE = 20kg to 40kg/day)
Labour: Sourcing, co-ordinating, quality control, value4money, administration (pay, tax, super)
SMALL PRODUCER MEDIUM PRODUCER
<500m2 500-1000m2
Up to 300kg 300-800kg

Scaling-up 40-80 kg/mth (4mth) 80-200 kg/mth (4mth)

Med Producer investment decisions


Chinese bulb separating equipment $1500-$3000 USD
Roller dimpler (engineered) -row spacing $5500-$6500 AUD
Mulch shredder (small square bales) $11,000
Spraying equipment tractor boom/boomless $3k-$10k
Harvesting: undercutter - $1500 - $12,000+
Curing / storage trays 10kg holding - $12-$15 each
Cleaning: Good secateurs $55-$120 ea
Labour: look for retired persons (life experience)
SMALL PRODUCER MEDIUM PRODUCER
<500m2 500-1000m2
Up to 300kg 300-800kg

Scaling-up 40-80 kg/mth (4mth) 80-200 kg/mth (4mth)

Med Producer infrastructure investment


Shedding size & systems curing & storage
Bunching:
10-15 bulbs per bunch
(depending of type of garlic)
Each bunch garlic bulb weight = ~1kg/bunch
@ acre (1000m2) = 800 bunches
Each bunch drying area =
60cm H x 40-50cm W (depending climate)
Area required depends on:
Climate (RH, Temp, Convective air movement)
Hanging/curing style
(bunches/bulbs vertical or horizontal)
ATTEND CURING & STORAGE PRESENTATION
SMALL PRODUCER MEDIUM PRODUCER
<500m2 500-1000m2

Scaling-up Up to 300kg
40-80 kg/mth (4mth)
300-800kg
80-200 kg/mth (4mth)

Stabilising & improving


On average 3-5 years from SMALL PRODUCER to MEDIUM PRODUCER
Stabilise for a year (or 2) before doing any more changes
Implement your lessons learned and optimise your practices
Take time to regain financial stability before considering further change
Most are happy staying as MEDIUM PRODUCER (maybe able to stretch to 1 acre
(4,000m2) and never progressing to SMALL COMMERCIAL
THIS STAGE IS YOUR MOST PROFITABLE AND LEAST RISK ENJOY IT

SUMMARY - Determine your pressure points


(which highlight you operational/investment demands)
Land: What is max annual area with minimum of 3 year rotation
Operational cost/capital investment step ups (manage your cashflow)
Balance of operational efficiency & risk mitigation
Do Lessons Learned and provide period of optimisation & financial stabilisation
MEDIUM PRODUCER SMALL COMMERCIAL
500-1000m2 1,000m2-25,000m2

Scaling-up 300-800kg 800kg 15 tonne


80-200 kg/mth (4mth) 200 kg -3 t/mth (5mth)

Med Producer to Small Commercial


OPERATIONAL MANAGEMENT COMPLEXITY 3 YEAR ROTATION ACTIVITY MAP with SALES & REVENUE
DEC JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV
2 REGIONS IN ROTATION (MIN 3 YR)

Exponential increase in complexity AREA 1 GREEN MANURE


AREA 2 - FALLOW
PLOUGH HOE PLANT

S-TYNE CULTIVATOR F=4WKS


SOIL TEST
INCORP

FERTILISE PLOUGH

PLANTING ROTATION (MIN 3 YR)


AREA 3 P1 ROTARY / S-TYNE CULT

Managing significant upscaling of bed BIO-STIM FORM BEDS


WRAP BEDS
CRACK
PLANT
WEED
TISSUE TEST
LAY IRRIG
WEED
IRRIG

preparation and planting operations


WEED

AREA 3 P2 FERT
HARVEST

in parallel to both cleaning and selling SALES & REVENUE INCOME


CURE

CLEAN
SELLING

whilst managing CASHFLOW and $$


MONEY

CASHFLOW CHALLENGE FOR FIRST WHOLESALE ORDER (360KG) UNTIL FIRST PAYMENT
WHOLESALER buy orders and PAYMENTS BED PREP
3 mths
GROW
6-9 mths
HARVEST
1 wk
CURE CLEAN
4-12 wks 1-2 wks
SHIP
1 wk
PAYMENT
4-6 wks
= 12 16 mths

Now becoming CEO, COO, CFO, manager, worker, janitor, supply


officer, accounts payable, accounts receivable, payroll officer, book
keeper, sales executive, marketing executive, social media guru, web
developer and content writer.
MEDIUM PRODUCER SMALL COMMERCIAL
500-1000m2 1,000m2-25,000m2

Scaling-up 300-800kg 800kg 15 tonne


80-200 kg/mth (4mth) 200 kg -3 t/mth (5mth)
MARKETING

Med Producer to Small Commercial & SALES

CLEANING &
PACKAGING

This is process of gradually scaling up size and equipment to:


SOIL PREP
CURING & GARLIC LAND &

Add infrastructure for increased production: STORAGE


HARVESTING GROWING ROTATION
& BED
FORMATION

Buy (rather than contract) for soil preparation/bed formation WEED &
GARLIC SEED
DISEASE
Larger irrigation pump, new main lines & sublines, tape, sprinklers MGMT
PREP

Increased shedding for increased yield IRRIGATION & MULCHING


PLANTING
FERTGATION (ORGANIC)
High density curing/storage to limit shedding infrastructure
Fans, heaters, dehumidifiers to assist high density curing

Reduces pressure points:


Time sensitive Cracking/grading (2.5Ha=~2.5 t seed), harvesting, curing
Labour Cracking, planting, weeding, harvesting, cleaning, order fulfillment
Cost Labour reduction, efficiency increases (sitting vs standing to clean garlic)
Quality Seed development programs, damage reduction programs
MEDIUM PRODUCER SMALL COMMERCIAL
500-1000m2 1,000m2-25,000m2

Scaling-up 300-800kg 800kg 15 tonne


80-200 kg/mth (4mth) 200 kg -3 t/mth (5mth)

Med Producer to Small Commercial


Larger 80+ HP tractor to run soil prep attachment (2nd hand) $65-80K
Rotary disc plough $6K, rotary hoe $12K, S-tyne cultivator $4K
Irrigation pump $12K, 2 mainlines $60/m, tape/sprinklers ~$7K/acre
Shedding with slab/insulation/heat vents/3 phase (20t) ~$250K
Curing trays/pallets/pallet jack/lifter (20t) ~$35K
Fans/heaters/dehumidifiers ~$80K
Electrical works (single & 3 phase) ~$60K
MORE ON CURING/STORAGE IN TOMORROWS PRESENTATION
MEDIUM PRODUCER SMALL COMMERCIAL
500-1000m2 1,000m2-25,000m2

Scaling-up 300-800kg 800kg 15 tonne


80-200 kg/mth (4mth) 200 kg -3 t/mth (5mth)

Med Producer to Small Commercial


ERME - E150 Cracking Line = ~$20-22K + add Bulb Grader
ERME / BROCHE planter/harvester = ~$250K plus
TEAGLE Bale Shredder = ~$24K
Weeders rotary, finger, tyne = $3K-$85K
Scaling-up
Med Producer to Small Commercial
This is a significant investment to manage 10-20 tonne of garlic
GO SLOW
On average 3-7 years from MEDIUM PRODUCER to SMALL COMMERCIAL
Stabilise for a year after third year of scaling up before doing any more changes
Implement your lessons learned and optimise your practices
Take time to regain financial stability before considering further change
THIS STAGE IS YOUR GREATEST RISK MISTAKES MADE NOW ARE COSTLY
SUMMARY - Determine your pressure points
(which highlight you operational/investment demands)
What is your essential operational investment to increase land production
What is your maximum holding capacity of existing storage before major investment
What is your critical investments to ensure you can mitigate high/volatile risks

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