PH's 2018 Garlic Effort

[TomNJ]

I typically grow about 500 bulbs per year; 100 for a friend at $10/lb, 100 for seed, and we consume most of the remaining 300 and give some to friends. Considering the tilling, planting, fertilizing, watering, scaping, harvesting, curing, and cleaning it's a fair amount of work, but hey it's an enjoyable hobby.

Sounds like you will be growing some 14,000 bulbs or nearly 30 times as much as I do. Given that you also have the cost of tunnels, marketing, transportation, and perhaps labor and machinery, is that return of only $6,000 pre-tax per year (1,000 lbs @ $6/lb) considered worth your effort? Just curious as I have often fantasized about expanding to a large scale as you do, but am always held back by the low return on my invested effort.

[bower]

Interesting! I look forward to hearing about it.

[PureHarvest]

Tom, yes, 1,000 lbs x $6 for 6k in revenue.

I will have to dig up my production budget, but the costs are minimal.

Fert: $52.
Fabric: Already paid for and holes already burned. Will reuse landscape pins from last year to anchor. The tunnel beds will get straw instead of fabric. Straw is free for me.
Tunnels: 0 cost, NRCS grant (in fact, I had money left over that I used for other farm expenses).
Drip tape: $140
Seed:$0 (assuming you are at the point of not buying anymore)
Fuel for delivery: $40
Labor: this year was $0. My parents, kids and wife helped with harvest. I prepped, planted, de-scaped, and did some hand weeding mostly solo (kids helped for about 2 hrs).
Bulb cleanup was about 90% me over the course of a few weeks.
Next year, due to the increase, I'm guessing I will have to pay some help on bulb clean-up. Maybe $500?
Electric from walk-in and de-humidifier: will have numbers on this in a couple months, but guessing up to $200.
Machines are paid for other than routine maintenance which doesn't come out of gross profit margin calculation, for the sake of this discussion. Certainly that and other fixed overhead needs to be assigned to the percentage of the operation that the garlic enterprise uses. I can get that number at year end and calculate a net profit.
Marketing cost is some emails and phone calls. I have left over boxes to deliver in, and the retail boxes are re-usable and already paid for. The signs I had made were done by a good friend and he doesn't charge me (although I will slip him some cash here soon).

So that totals about $932, call it 1,000.

So, 6,000-1,000=5,000.
$5,000/$6,000= 83% gross profit margin.

Is it worth it? well, considering the work is spread out over time, and I have all the infrastructure in place and will not be buying seed after this year, for me it is. Add this number to what I hope to make on greenhouse tomatoes next spring, and I think I can cover the entire mortgage for the year. And that is all I am trying to do. So I see that as worth it.

[bower]

It's definitely good to set a goal and meet it by your efforts. But it doesn't get real for me unless I keep a record of the hours of work and at least know, what am I making as an hourly wage.
Not that I wouldn't do it for a low wage, if it allowed me to meet a goal as in your case. No problem with that. But being mostly self employed for many many years and in diverse business, I learned that I need to know what wage I'm making for the hour of work. It's all too easy to leave things out, but then when it comes to scale up time, you find your hours are already completely filled with things that you didn't count...

There are things I do that barely meet material costs (tomatoes comes to mind) - I do it anyway if it fulfills other values, but I am aware that the hours I spend are worth $0 or close to it. This makes me wonder, what would it take for this to be financially viable in hourly wage terms.

I really like growing garlic and would take it on as a money making venture in a heartbeat if the opportunity was there. But being such a stickler for the economic facts, I would add it all up at the end of the year, to figure out what I got paid per hour, how much it cost me to produce the seed for next year, etc. And I would probably keep doing it for a ridiculous wage because I enjoy it, but I would be thinking about ways to make it pay better....

PH, your selling price is really low, it is what we pay for the chinese stuff in the supermarket. But OTOH, a low price point can move a lot of volume quick!!

[PureHarvest]

Bower, I hear what you are saying but disagree to some extent.

Running a simple hourly rate calculation is easy to do, and is maybe helpful looking at a one year scenario. However, over the long-term, to me, it doesn't tell enough of the story. No business owner I ever met thinks in terms of what they make per hour. Not to say they don't value their time or think about what they would have to pay someone for a task that they can't/won't do anymore.
The assumption is that early on you are going to put in a lot of hours in until you refine your system, reduce costs, reduce losses, and increase efficiencies etc. and be able to pay helpers to reduce your time.
Year one could be negative dollars per hour if you take on debt to get started. But the years after should bring the labor effort in line with the profit (or hourly rate if that is the goal you seek).

Eventually, if all goes well, you are making the profit you set as your goal, and you are happy with the effort it took whether it took 100 hours or 200 hours because it is what you do and fits your lifestyle goals.
Then, there are so many other benefits that come with running your own business that are not reflected in the hourly rate formula. Basically, all the things that a business gets to claim as an expense with pre-tax dolllars that a wage earner can not: land, buildings, equipment/tools, hardware, insurance, utilities, meals, travel, vehicles, and fuel to name a few.
Then there are the intangible ones like creating value for others, social capital, teaching a skill to the next generation, leaving a legacy for the kids, and self-improvement.
Basically, for me personally, I'm going to be growing something regardless of profit potential. I love growing stuff, that's who I am. There is nothing else interesting to me that is off farm as a part-time job. So I try to make money at it, even if the hours are long, with the intention that eventually they wont be. Plus I am at home, family is around, and I'm available to be there for them if I need to step away at any moment from whatever I'm working on. My kids get to see the hard work that something takes, the reward for it, and they can get involved and build work ethic. They can also learn many skills and trades, including the office/accounting side of all of this. This would never happen if I was at Home Depot at nights and weekends. Hard to put a dollar figure on all that.
Obviously the intangibles don't pay the bills. Math still bats last. However, I think you can totally evaluate if something is worth the time spent by looking only at profit at year end as your goal. If you determine you can't live off the profit, or it's cutting too close to not enough, then I guess you could run the numbers and determine that a job would be better. Or that you spent an inordinate amount of time over multiple years and are not getting anywhere.
I've done that and made changes along the way so that my efforts are in-line with my profit or profit potential. I've never even considered what I'm making per hour, just if I can hit a profit goal for what the process took.
Over the last 14 years, I've tried field scale tomatoes, pastured chicken/turkeys/eggs, cutflowers, garlic, greenhouse tomatoes, hydroponic lettuce, pole limas, 1-gallon arborvitae tree liners from cuttings, hot pepper relish, field scale rasp and blackberries.
Most were failures, took way too much time for the return, and I moved on. Sometimes you look back after a year and say, the little profit I make is not worth the effort. But I did not think, i only made $5 per hour. I re-assess and think, with the time I have available and are willing to expend, how do I net $12,000 (or whatever) next year.

All that being said, I ran the hourly rate calc for what I think the garlic enterprise will look like for next year. I'm projecting it would be about $25 per hour.

[PureHarvest]

As far as price, Chinese garlic is between $1.29 and $1.99 per/lb. in the store here. The USDA retail report last week shows a weighted average at $1.44 per pound retail. This time last year it was national weighted average at $2.19 retail.
So me wholesaling mine at $6/lb, that puts the retail even higher and much above the chinese stuff. We don't have organic stores, or hardly specialty or co-op stores to compare with for organic garlic. The handful are far away from me and focus on packaged goods and have terrible or non-exsistant produce sections.

[bower]

Amen to the intangibles, you said it right.
And you've convinced me about the project goal vs hourly return question. In your case, you also had a plan from the get go to keep certain aspects of labor to a minimum - the investment in mulch to handle most of weeds; drip irrigation too is a big time saver.
There are some assets that you develop which also have value in their own right not as something to sell but something to use. So if you own land for example, everything done to enrich the land and make it more fruitful is worthwhile, at the same time hard to put a dollar value on it. Fertilizers and soil amendments, I never regret the dollar spent and/or the time to get free stuff and apply it. Same goes for time spent saving or developing a seed resource.


Other type of assets depreciate as time goes by because they wear out. Thinking about fabric mulch, row cover etc. which are consumed in the process (over several years, but still). So it is kind of the opposite, you put money and/or time into it and then one day (always too soon) realize you have to replace it...



IMO at $25 an hour you don't even need intangibles to justify the time.

[bower]

I have been discussing the possibility of a garlic venture with a friend, so continuing to look at the numbers and looking at my harvest as well for a realistic expectation of marketable product, seed quality product and so on.


In a normal business venture where you are putting up a consumable asset like seed, you know that your price point should include replacement cost at market value....
Seed garlic in Canada is now selling at $4 a bulb. Porcelain garlic mostly have 4 cloves so the math is pretty straightforward - your nominal seed cost is $1 for every clove planted. So your cost per bulb harvested is already $1 without counting labor, ferts or any other input. Ouch.


I realize that the price of seed must be less when buying in bulk, but still... Porcelain garlic should be the most expensive on the market, as it has the highest cost to replant.

[bjbebs]

I've been growing and selling several hundred lbs. to a couple select buyers for many years. This is not a money making venture just something I like to do. I own rec. ground that can't be tended to regularly. It is pretty much the the only crop that deer and other critters won't destroy.
If I were to try to compute inputs this would take all the fun out of it. Plant, harvest, sell, eat and give away = happy.

[PureHarvest]

Will be starting the 2019 thread soon.
Got 320 pounds of seed bulbs on hand.
Moving my stock into my walk-in with a small dehumidifier saved my butt big time.
Mold kept trying to grow on my cleaned bulbs where they were being stored on my racks in my drying trailer. My climate is just too humid to store bulbs in a non-climate controlled unit. I lost 25% of my stuff to mold last year and moved the rest into the house where the temp was around 65 with 40% humidity and the bulbs completely dried out and shriveled.
It stunk having to buy all new seed bulbs last year.
My walk-in is locked in at 55 degrees and 50% humidity and the bulbs are perfect in all respects. They've been in there since the beginning of August.
Got my tarps in place to get the grass killed off before tilling/bed prep for this fall:
Tarp 9-13-2018.jpg

Pano 9-13-2018.jpg

[imp]

Pretty, and nice to have so much room!!!

[bower]

We cleaned up some bulbs at the farm today, that were cured in a solar heated space, nice and dry for that. But just a few days of cooler and wetter weather, there is dampness in the big porcelain bulbs and needed to be moved into a more controlled space.



How long do you put your tarps down, PH, before it's ready to till? I was wondering if it is too late for me to do that here, tarp out an area and hope to have the ground ready to prep by planting time in a month or so.

[PureHarvest]

3 weeks.
Light exclusion is obviously one part of it, but the warmth/heat that builds underneath really seems to be the thing that moves the process along faster.
The first tarp has been on about a week.
I will try to get a pic on what that looks like. I know last Thursday I peeked and it was already turning yellow. It has been SO wet this year that I think the heat combined with the moisture under the cover is just really taking things out.

[bower]

Thanks, PH. I wish we would get some 'normal' weather because after being way hot and dry it has now turned wet and colder than normal here, and the days are getting shorter pretty fast. I think I missed my window for the tarp.

[greenthumbomaha]

Its been HOT and dry here. The flame weeding went well and the bed got a touch up just to be sure. I wasn't able to tarp immediately, but next week I'm having a light till of a partially new area (its hard solid clay) I'll put down weed fabric ahead of planting but a tarp is not to be this fall.


I have the opposite situation of yours, Bower. My concern is the ground is so warm that I want it too cool off. It's 94 today and the ground temp is 74. Next week is a transition to normal fall temps in the 70's. The temps may tank after that, so my planting window is going to be short. Normal planting is mid-Oct, and I have heard people thinking about planting earlier this year.



What crazy weather all around.


- Lisa