VIEWS: 3 PAGES: 2 POSTED ON: 12/20/2009
SOME THOUGHTS ON TRUFFLES By John Spriggs (firstname.lastname@example.org) 1. Situation a. In Europe truffles grow naturally on gritty, open‐textured, calcareous soils between 40oN and 47oN where annual rainfall is between 600 and 1500mm. Mean daily summer temperature range is 16.5oC to 22oC and mean daily winter temperature is 2oC to 8oC. b. We are a little out of the ideal latitude range but this doesn’t seem to be a problem as there are other growers nearby who have successfully grown truffles. c. With regard to the soil ‐ it has good drainage (oak trees are highly susceptible to water logging) but is too acidic – we would need to do soil tests and should expect to have to add significant lime in the first year with top‐ups every 3 years. pH needs to be in the range 7.5 to 8.0 d. With regard to rainfall we are at the lower end of what is needed and there is considerable uncertainty (i.e. we are drought prone). This means we would need to have access to supplementary water – irrigation (at least 0.5 mega litres/ha/year). This is needed especially in the first 3 years to get trees established and to assist good mycorrhizal establishment. e. Probably would need a fence to keep out the kangaroos. 2. As a result of this situation the main setup costs are about $24,000 per ha (according to Wayne Haslam). These include a. Buying trees (about $25 each x 400 trees/ha = $10000) b. Adding lime (and fertilizer) to the soil ($4,000/ha) c. Installing irrigation ($4,000) d. Installing vermin fence ($4,000) e. Other costs including planting, soil preparation ($2,000) 3. The ongoing costs would appear to be about $7,000 in present value terms which consist of a. repairs and maintenance ‐ mowing, spraying, repairs to irrigation equipment. etc ($1,500) b. Irrigation ‐ cost of water (?) c. Lime top‐up ‐ $500 every 3 years d. Harvesting ‐ $5,000 in present value terms (after year 6) – this includes $2400 overhead cost plus $65/kg with assumption of yield of 0.1 kg/tree 4. The returns appear quite risky – the returns depend on variable yield and variable price: a. Yield – should not expect significant yields until year 7. Wayne H is now in his 6th year with his 2 ha of 800 truffle trees. He is optimistic and expects yields to grow exponentially tapering off at around 40 kg/ha – but doesn’t really know. His yield history has been: i. Year 4 – 1 kg ii. Year 5 – 5 kg iii. Year 6 – harvest to occur June‐July b. Price – this has been pretty good so far (around $1500/kg). It is anybody’s guess as to what will happen in the future. I do know that with such high returns, supply response has been dramatic and I expect will continue to be very strong. There are currently 80 growers in NSW alone and they are popping up everywhere. Much of the supply has not come on stream yet as there is a biological lag time of about 6 years between the decisions to go into production and when harvest occurs. Many growers have gone into the business in the last 3 years (and there are some large investment schemes) so I expect supplies will start to come on stream in another 3 years and prices will start to fall. On the other side of the ledger is demand. This is currently strong (especially in France and is growing in Japan and Korea). But the strength of current demand is already reflected in the current prices. What happens to price in the future depends on how fast demand increases relative to what seems to be an explosion in supply. My guess is demand will grow much slower than supply and prices will fall in the medium term. But how far and how fast is anybody’s guess. I have seen this phenomenon happen before with other crops (e.g. vanilla) where the price has dropped by over half in a matter of a couple of years. However, I’m not an expert in truffles and more market research is needed. 5. Conclusion a. From an agronomic perspective, the water situation could be problematic. We would need to have supplementary water (irrigation water of 0.5 mega litres/ha) and this might pose a significant burden on Buckingham’s bore (water supply). b. From a marketing perspective, I am somewhat sceptical about going into this with the idea of making a lot of money. There is good money to be made now by the early adopters. But my guess is that by the time we start producing there will be an oversupply and a market correction and prices will be significantly less than current (perhaps we would be looking at $750/kg rather than $1500/kg). c. If we are to go into this venture, I suggest it only be on a pilot basis – say 50 trees on half an acre to test out the agronomics and see how well we become as managers of the crop – because in the long run, my guess is there will only be profitable returns for the good managers who can produce a high quality product John Spriggs 18 May 2009
"SOME THOUGHTS ON TRUFFLES By Joh"