The price of ginseng , Wisconsin's highly touted top export crop, has tumbled to the point where farmers may lose money this year.
The price has hit a low of $10 a pound, down from $30 a pound two years ago and $90 in previous years, ginseng experts said Wednesday.
"At today's prices, I think you should see a psychiatrist if you are thinking about starting in ginseng ," said Jeff Lewis, with Ginco USA, an exporting firm in Wausau.
Although prices are low now, state officials are continuing to promote ginseng with overseas trade trips. And Wisconsin recently signed an agreement with the Chinese government to open a ginseng research center in Beijing.
The center will be a joint venture between the Wisconsin Ginseng Growers Association and the Chinese Academy of Sciences, and is intended to produce new products.
Ginseng is considered a powerful medicinal herb in Asia. It supposedly increases strength, reduces tension, lowers cholesterol, adjusts blood pressure, retards the aging process and enhances sexual performance.
Until recent months, ginseng has worked wonders for Wisconsin's farm economy. In 1996, the state grew 1.6 million pounds of the potent plant valued at approximately $90 million. All but 13 percent of the crop was exported to Asia. But a glut of ginseng production in Canada and Korea, coupled with skittish Asian markets, are two reasons behind fallen prices.
Experts say the Asian markets, particularly Hong Kong, have curtailed ginseng buying substantially. One reason is that Hong Kong buyers are nervous about what's going to happen in July, when their country becomes part of communist China.
"Hong Kong bought a lot of ginseng last year, and I think they stocked up supplies because of the political uncertainty," said Peter Choi, president of American Ginseng Wholesale in Wausau.
Canadian farmers also have taken a bite out of Wisconsin's ginseng sales. Ontario has doubled its production in the past three years, British Columbia wwent from no acres in 1982 to more than 2,000 last year, and Wisconsin buyers suspect that Canada is subsidizing its farmers.
"They've undercut our prices," Choi said.
Ginseng is an expensive crop to grow, costing about $35,000 an acre, according to state statistics.
Thus, with depressed prices, some farmers might decide not to replant, said Larry Berrens, a Marathon County ginseng farmer, and board member of the Wisconsin Ginseng Growers Association.
"I think it's hard for the beginning farmers when they are selling their crops for below their production costs," Berrens said. "Hopefully, the experienced farmers can weather these prices."
Wisconsin has about 1,400 ginseng farmers, with 1,100 of them in a 10-mile radius of Wausau, in Marathon County. The area has steep hillsides and rich, loamy earth that's ideally suited for ginseng , a finicky plant to grow. It takes about four years to produce a ginseng crop, the plants have to be shaded about 75 percent of the time, and they can never be grown in the same soil twice.
Ginseng plants emerge in spring after the last frost and grow until a killing frost in the fall. Each year, the root itself grows larger.
Most ginseng farmers will ride out the tough times by leaving their plants in the ground another year or cutting their growing costs, said Ron Rambadt, executive director of the Wisconsin Ginseng Growers Association.
"Farmers can save money by hiring fewer workers to weed their fields," he said. "The fields might not look as nice, but they can get by."
Ginseng prices have hit eight-year lows of $10 a pound to $18 a pound, with $14 considered average, according to exporters.
"It's going to be a while before we know when prices will come back," Rambadt said. "I think everything is going to be fine with Hong Kong and China, but you never know for sure."
Lt. Gov. Scott McCallum and other state officials have been strong backers of ginseng , calling it the state's most valuable cash export crop. Wisconsin produces 97 percent of the nation's ginseng crop.
In April, McCallum and 15 Wisconsin ginseng growers spent two weeks in China, meeting with buyers and government officials. The trip was paid for by the Wisconsin Ginseng Growers Association.
"The lieutenant governor is concerned about the fallen prices," said spokeswoman Lisa Hull. "He knows that with lower prices, farmers need to sell more ginseng to make up the difference."
Wisconsin growers need to broaden their sales beyond Asia to Europe and U.S. consumers, according to Choi with American Ginseng Wholesale.
One reason ginseng hasn't had broad appeal in the United States, Choi said, is it has been shrouded in Oriental mysticism, where different shaped plant roots have hundreds of different meanings.
"We should be telling the public that ginseng is ginseng , instead of making it so difficult to understand," Choi said.
Growers shouldn't quit because of current ginseng prices, according to Choi.
"If prices stay low, some farmers will probably get out," he said. "But personally, I think they should stay in for the long haul."
The state will continue to push overseas ginseng sales, said Mark Liedl, marketing administrator for the Wisconsin Department of Agriculture, Trade and Consumer Protection.
"I think we need to be more aggressive and more sophisticated than ever," Liedl said. "We're no longer the only player in the marketplace. And just like the restof agriculture, it's changing all of the time."
BY : Rick Barrett - Agribusiness reporter
SOURCE : Wisconsin State Journal
1997. 05.
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