Why is truffle so cheap?

A general summation of market factors as I am aware of them.

Growing Truffles

Like any farm industry, there is a lot of support work in an orchard once it reaches commercial production. Vineyards do not simply harvest grapes a few weeks a year, nor are truffles in Australia simply foraged in the wild!
In both instances, without a lot of support work in the months before harvest, only a fraction of the crop would ever survive to reach the table.

For myself, the support work, on top of the harvest season itself in 2015, was ~1200hours, basically a full time job for eight months, {and should have been more}.
This equates to about 30 hours per kg of saleable truffle,

Admittedly, a lot of the work is of my own making, with a substantial amount of research being conducted alongside the maintenance. My insistence on being spray free also increases the workload. Finally, being very particular during harvest to achieve fully ripe truffles also adds a few additional hours per kg.
But even if I were to join the chemical maintenance club, and lowered my harvest standards, I doubt the work would drop below an average of 15hrs/kg. Other growers I’ve spoken with have concurred that 10-15 hours per kg is a realistic summation.

Simply put, for a grower, this means the price received for 1 to 2 kg of truffle is your weekly wage for 8 months, and the remaining 4 months is unpaid or other income (don’t give up your day job, just take 8 mths off per year…)

Sellling Truffles

As a new truffle orchard enters production, several steep new learning curves start.
In particular, “How to sell your truffles?”

I urge any upcoming growers to consider what will happen when their production and the associated workload increases, which is why most people have planted in the first place.
{This may upset some, but if your work input does not go beyond; mow occasionally, water a bit, and harvest a few truffles, then it’s unlikely dreams of real production will ever be realised}
Initially a small or upcoming grower is best served selling to local restaurants, markets and individuals. {I’ll likely write more on this separately} However, if everything works out in your truffiére, once a significant harvest season is in full swing, there aren’t enough hours in a week to harvest everything, clean, grade, market & sell it.

Enter the Wholesalers & Exporters, where you will begin to wonder if it is worth continuing with truffles at all. Lately a few of them have been contacting growers and offering absurd prices for truffle. In the current Australian market, I don’t believe they are a viable option for any small producer.  I don’t even think they are viable if you had a few hundred kilograms. If we could forage truffle in the wild… then it would be nice.

I’ve received (and rejected) offers to buy truffle domestically as low  as $900/kg in 2015 $750/kg for 2016 {top grade only of course!} With the required labour, that does not even reach minimum wage, let alone begin to repay ten years {or longer} of investment of both time and money.
{The time could have been spent earning other income, the smaller financial outlay was an accepted risk, but at average wage rates, together they would readily add up to over $300k, to be offered the equivalent of minimum wage is absurd}

International (& Domestic) Market Pricing for Australia

Again this is very much an opinion and generalisation. I have confirmed my understanding of the following market forces from several of those directly involved.

With a few Australian exporters selling into Europe (not necessarily growers), apparently they have taken the minimum peak season price from the European season as a target, and set a fixed domestic price for the year based on that.
The European wholesale market fluctuates substantially each year, according to supply and demand throughout the season, in 2015 it was around 1200Euro down to 800Euro.

The European season pricing is largely based on Spanish truffle production which provides around 80% of the European truffle. Therefore Spanish labour rates (around $5-$8/hr) also come into play in how little is offered for truffle at that end.
In 2015 the Spanish growers and wild harvesters received around 300 to 500Euro/kg Further, this is for dirt on and ungraded, shipped to Europe, primarily to France, and often presented under pretence it has just been foraged locally. It was then sold for the aforementioned 800-1200 Euro

Possibly because it makes it easier to sell an out of season product in Europe, the Australian exporters are starting at the 800Euro figure, and working backwards from there.
{Yes it’s already predetermined the 2016 Australian harvest will be exported around $1250AUD, there’s no market forces at work other than exporters trying to undercut each other with contracts before the season even starts. As a side note, apparently export to Japan of unripe truffle started from WA in May}
To be applying that pricing to the Australian market, 6 months later, and with a substantially higher base labour cost is already absurd. Furthermore that price is being applied to clean, washed, top grade truffle, with substantially less offered below that grade.  Remember the Spanish/European wholesale price is typically unwashed, ungraded, allowing for dirt, and even a percentage of other species mixed with the shipment(sometimes deliberately).
Not only are some of these exporters attempting to buy from growers at half these predetermined prices, they are selling at the same low export price into the domestic market, which is undermining growers on two fronts.

For the chef and the consumer, a dish will typically contain 3-5grams of truffle, costing around $5 to $10, far less than the wine on the table.  It makes little difference to either if the meal is $50 or $55, but it does make the meal more memorable than the wine, and brings the customer back for more. For the growers however, it can be the difference between making a return, or leaving the industry.

I ask again, “Why is truffle so cheap?”