A LOOK AT PEPPERMINT CROP

Press, 28 October 1977, Page 15

A LOOK AT PEPPERMINT CROP

Should contracts for growing peppermint be for a longer period than a year? This was the subject of discussion at a seminar on the crop held at Lincoln College this week.

Mr N. A. Dunlop, a farmer of Burnham who is a peppermint grower, favours a longer term contract, He told the meeting that it took a year to recover establishment costs and it would take a further two years before a reasonable profit was made. “My bank manager, or even" the Rural Bank, would look more kindly if there was a basic minimum price set for three years after planting, or possibly even a compensation clause if for some unforeseen reason the industry collapsed,” he said. Mr A. Fowlie, of D.Y.C., Ltd, for whose firm peppermint is grown around Christchurch, said that they had had in mind a longer contract than a year. A longer term contract of up to three years was used in the United States, but there was a difference between the situation in New Zealand and the United States. In the United States growers distilled their own oil. If they did not have their own still (and more and more did not) they had it contract distilled. The oil stayed in the grower’s possession to sell as and when he felt fit. The price that the grower received in the United States was for crude oil extracted ready for shipment to an oil buyer’s warehouse. Contracts in the United States were signed for the supply of a given quantity of oil at a given price during the coming season. The quantity was always less than the grower could produce, and the oil produced in excess of the contract amount was sold on the open market. The contract system in the United States served as a guarantee of a minimum income to the grower and enabled buyers to arrange, before harvest, an assured supply. “The contract price that .?e offer is for oil in the plant and obviously the difference between the United States and local contract prices represents the cost of distillation and of carrying the risk that selling prices may vary considerably.”

Mr Fowlie said that his company’s philosophy about the contract price was that a price should be established that would give a fair return to the grower compared to other local process crops and current growing costs, taking also into account the long term movements in overseas markets, the recognition of savings to the company through more efficient processing, and the recognition of quality.

“We seek to provide a stable price recognising the fact that peppermint remains in the ground for a number of years and that the grower should be in a position to assess his returns for a number of years after establishment.”

In the United States Mr Fowlie said that the crop was in the ground for up to 25 years, although it had to be disturbed during that period. In thinking about a longer term contract on the local scene, Mr Fowlie said that they had been faced with the problem of how they should set it up. He imagined that contracts of three years duration had virtually gone out the door, because no grower was prepared to sign himself up for that period of time. While for a yearly period a grower might be paid on the basis of $l2 per lb of oil, for three years it might only be on the basis of $9.50 per lb, and if during this period the price rocketed to $2O then the grower who had signed up for three years felt he had missed out.

Mr Fowlie said that they would be looking in the next year or so at what growers felt about long term contracts, but what they could do about it he had no clear conception.

The area of crop at present planted was 153 ha (382 acres), Mr J. T. Gelens, of Pyne, Gould, Guinness Ltd, who arrange the contracts for D.Y.C., told the meeting. Mr Fowlie said that they were projecting to expand the area contracted over the next five years to 400 ha (1000 acres). This quantity would supply New Zealand’s requirements several times over and was aimed at export.

The local requirement, he said, was not a relevant factor in determining the level of production. Once a product had been established using an oil of a particular quality, he said, users were reluctant to change their supplier. Thus virtually all of the oil produced by D.Y.C. had been exported. So far destinations had been the United Kingdom and France.

New Zealand consumption of mint oil was not available as separate import statistics were not kept, but a reasonable estimate would be 6000 kg per year. Mr Fowlie said that they hoped in time to sell more New Zealand oil locally as its quality became more widely known. There was a growing market for the product, he said. It was a flavour accepted by a wide range of ethnic groups. The biggest growth area had been Japan, and more recently in the Far East and Middle East. As local experience in growing peppermint increased and more information was available about steps that could be taken to improve quality, it was hoped to introduce premium payments for quality oils. But it was expected that it would be two or three years before any payment for quality could be considered.

Referrring to the much higher yield of oil from peppermint that went into the still in good sound leafy condition compared to that of poor leaf, Mr Gelens said he also felt that some thought should be given to paying an incentive to the fanner who made a good job of his crop.

It had taken six years to build up the area of the crop to the present level, and even though average oil yields had been lower than hoped for, Mr Gelens said “we are convinced that with better management oil yields can be greatly increased, especially if more attention is paid to nitrogen, weed control and irrigation.”

Both Mr J. Lammerink, of the Crop Research Division of the Department of Scientific and Industrial Research, and Dr J. G. H. White, of the plant science department at Linc o 1 n College, who presented a paper in collaboration with Mr D. G. Clarke, of the biochemistry department at the college, emphasised the vital importance of moisture and nitrogen fertiliser in production of best oil yields. “The yield of peppermint oil depends on the production of leaf and on the oil content of the leaf at the time of harvest,” said Mr Lammerink. “Irrigation and nitrogen are the most important requirements

and these increase during the season. With a lack of available soil moisture or nitrogen in late summer a potentially good crop will suffer considerable yield losses through leaf drop.”

Dr White said that time of harvest was also critical, and he said they considered that many of the local commercial crops were being harvested too late — the normal harvest period is from about midFebruary to mid-March. Although a delayed harvest resulted in high quality oil, the loss in yield resulting from a tnreeweek delay might be 30 per cent or more. There might well be a need for a testing service to measure oil quality and yield as an indication of when to start harvesting. “The average yield of peppermint in Canterbury in 1976-77 was 39 kg per ha,” he said. “Yields of 50 to 70 kg can be achieved consistently in the future where ' well-established stands receive optimum nitrogen and water and are harvested at the correct time.”