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Echineacea as a tobacco crop alternative (Research Brief #48)

Posted January 2000

Many Wisconsin tobacco farmers are looking for alternative crops following the ongoing reductions in tobacco allotments and tobacco markets. Allotment reductions mean lower production levels and lower incomes for tobacco farmers. One crop proposed as an alternative to tobacco is echinacea (pronounced ek-in-a-sha), or purple coneflower, grown mainly for its medicinal root. Echinacea has enjoyed success in the herbal medicinal market as an immune system booster. But the marketing requirements of echinacea are very different than those of tobacco.

The market for echinacea as a medicinal herb dictates organic production methods, a change for former tobacco growers. “Growing echinacea is similar to growing tobacco 40 years ago because of organic requirements,” says Don Schuster, UW-Madison Center for Integrated Agricultural Systems (CIAS) researcher. To meet organic certification requirements, echinacea must be harvested from land that has a minimum three-year history of inputs allowed by an organic certifying agency. Seed need not be organic, but seedlings must be raised in approved organic potting mixes or soil.

Schuster researched the emerging echinacea market, as well as the crop’s suitability for tobacco growers. He attended an echinacea seminar and made contact with current growers and buyers, as well as talking with tobacco growers about their existing farm resources. He and Rick Klemme, CIAS Director, developed a budget for tobacco growers switching to echinacea production.

Growing requirements

Echinacea is a native North American plant with nine varieties. The current primary market is for dried roots from three-year old plants. A limited market exists for echinacea tops.

Schuster warns that with so many varieties of echinacea, growers need to be sure of the variety they want to grow. Each variety has its own market-or lack of market-and set of growing requirements.

Echinacea can be planted by direct seeding or by planting plugs (seedlings) like tobacco plugs. Direct seeding is less expensive, but used less commonly by growers because of poor germination and slow growth of echinacea seeds. The plugs are relatively expensive because echinacea seed needs to be started in sand and refrigerated.

Tobacco equipment can be used to plant echinacea. Echinacea plugs can be planted with a standard two-row tobacco planter with 30-inch rows. Six additional people need to help with planting: four on the planter, one to walk behind the planter to check sets, and one person to prepare plug trays. The researchers budgeted 42 hours per acre for planting.

Since echinacea does not compete well with weeds and herbicides are not allowed in organic production, hand hoeing is required. The researchers budgeted 160 hours of hoeing per acre for the three-year growing period. Artificial or living mulches are another weed control option.

A modified potato digger can be used to harvest echinacea roots. The market requires that the roots be clean, unbruised, and dried. So producers need to gently wash the roots and dry them in homemade drying boxes. The researchers budgeted 35 hours of labor per acre for the washing and drying of echinacea roots.

Costs of growing echinacea

Schuster obtained growing costs and information for three varieties of echinacea. The 1999 costs for echinacea plugs were $0.20 per plug for E. purpurea and E. pallida and $0.25 for E. angustifolia. All varieties were assumed to be planted at a rate of 12,500 plugs per acre, resulting in a cost of $2,500 to $3,125 per acre. Labor costs were assigned a rate of $7.35 per hour. Assuming a slightly acidic soil on former tobacco ground, lime was included at a rate of two tons per acre, at $18 per ton. No other fertilizer was assumed to be used. An interest rate of 12 percent was assigned to the costs over the three-year growing period. A relatively high interest rate was used because of the risk associated with the crop. Drying costs, such as energy costs and depreciation and interest on drying boxes, were included.

Other expenses included in the budget were organic certification, repairs and maintenance, energy, and marketing costs. A charge for land and taxes was excluded. “Land costs vary tremendously, so we did not include them in our budget,” Schuster explains. “But an individual farmer using this budget can deduct land costs from the net returns to calculate profit.”

Tobacco farmers will find that echinacea production requires equipment typically available on a tobacco farm, including cultivators, planters, and flat rack wagons. Depreciation on an existing tobacco equipment set costing $39,075 is applied to the budget. (Someone starting from scratch in echinacea production could use a less expensive equipment set if they can find used equipment.)

Additional equipment included in the budget: a one-row potato digger (used) at $5,000; a potato windrower (used) at $2,500; washing equipment for roots at $1,000; and three drying boxes with an LP heater (homemade) at $2,500.

Echinacea income

Yield, prices, and marketing determine income. Table 1 shows yields, prices, and returns on three echinacea varieties. The breakeven price (where total income equals all costs except land and management) ranged from $3.65 to $6.57 per pound.

“Price volatility is a major concern with echinacea production. One example of this volatility is E. purpurea. The dried roots dropped in value from $10 per pound to $2 per pound in just a few years,” Schuster observes. E. pallida roots currently have no market, but with research showing that it has many of the same chemical characteristics as E. angustifolia it is quite possible it could have a market in the future. E. angustifolia grows well in sandy soils, but develops root rot in the silt loam soils found on most Wisconsin tobacco farms. E. pallida grows well on silt loam soils.

Even slight variations in price can make drastic differences in returns. Table 2 shows, at a price of $2 per pound, all three varieties in the study showed negative returns to land and management per acre. At $6 per pound, returns ranged from -$188 per acre to $1,393 per acre, depending on the variety. Yield differences account for much of the difference in returns between varieties shown in the table.

Marketing echinacea

“Echinacea marketing is very different than marketing tobacco,” Schuster warns. Growers need to work on finding a market six months before the roots are harvested. They should make contact with buyers to find out what echinacea varieties and forms (whole or ground) they are buying, and if there are any special quality issues that will bring the highest price. Some buyers will want crop samples from growers, putting new growers at a disadvantage when marketing their roots. Schuster also recommends that growers research a buyer’s financial status and history to make sure it is stable and that the buyer can back up his or her financial commitments. Schuster was unable to document any contracts between growers and buyers.

Evaluating alternative crops

Some farmers in the U.S. have found alternative crops such as echinacea to be both profitable and a good fit for their farm, but echinacea is a crop that illustrates well what factors farmers need to consider before making major changes to their operation. Growing and marketing requirements are two areas of change for tobacco growers switching to echinacea.

The price volatility of many alternative crops is also something for farmers to carefully consider. This volatility can be handled in a number of ways: for example, farmers can carve out a unique market niche, or diversify with other crops so that the low prices in one crop can be offset by high prices in another. Schuster urges farmers looking at alternative crops “to make contact with growers and buyers before one plant or seed goes into the ground so they know what they are getting themselves into.”

In considering alternative crops, producers need to answer several questions:

  • Does this crop meet my long-term goals for my farm and family?
  • Do I have the research and marketing skills to sell this crop?
  • Does my farm have the right type of soil and climate to meet growing requirements?
  • Can I meet standards for this crop, such as organic certification?
  • Can I provide the required labor?
  • Do I have, or can I afford, the facilities and equipment required for this crop?
  • Does this crop fit in well with my other farm enterprises?
  • Does this crop have a strong potential to meet my financial goals, including level and timing of return?
Table 1: Projected returns for three echinacea varieties, using May, 1999 prices
E. angustifolia
E. purpurea
E. pallida
Yield (lbs./ac)
1999 price/lb.
Returns to land and management:
per acre per year
per acre-3 years
Breakeven price/lb.
*$4/lb. is an assumed price. No established price could be found for E. pallida.
Table 2: Returns to land and management per acre by price and variety
E. angustifolia
E. purpurea
E. pallida

Published as Research Brief #48
January, 2000