Yarra Valley Truffles: Blog

Realising it would take a book to make my point, instead here’s a calculator.
If you don’t agree with my default numbers, {ALTER} them.

Our conclusion, we need enough customers that order truffles directly, at a decent price, with delivery by post or courier. It’s not possible to visit everyone, every week.

Calculator may only work on desktops. The default calculation shows that;
with a full time workload at $20/hour to achieve a minimum wage of $40,000 per year with a six week harvest season.
requires 34 sales of 100 grams, per week, at $2/gram, difficult to reach so many venues without them ordering, and unwilling to pay that much (until they see the quality) Lower prices, needs even more sales or <minimum wage.
or 9kg per week to a wholesaler at $750/kilogram, 54kg will not be achieved without full time work.

Continue reading “Truffle Growers Calculator.”

This is general summation of market factors as I am aware of them.

An earlier post discussed the Australian price being set by exporters/distributors.

In 2016 there are a couple of companies offering truffle “marketing” services, in addition to the usual wholesale distributors.  All proclaiming that it is a tough business, and the price is set by the market.  ie. probably contracted to a distributor at predetermined price?  A percentage of the blame falls on those that supply these distribution channels at the prices they request. If “They won’t pay more!” then why were they paying more ten years ago? Why didn’t the export price go up when the AUD fell in past few years?

Typical wholesaler/exporter markup is 30%, for a tiny fraction of the labour involved in producing it, and on top of that… shrinkage, their own grading methods, freebies and finally commission sales, if they don’t sell it, you get nothing!
It can take them as long as a day to sell 10kg of truffle, that’s nearly an hour per kilogram, and the poor people only get a half to a third of the price.
At >15hrs to produce a kg, let alone the preceeding investment, clearly growers are in the wrong game, but someone has to actually produce the truffle.

What can small growers do faced with cheap truffle in the domestic market?

How does this affect a small grower, beginning to harvest.

Newly producing growers should first attain a local market, restaurants and private clients within their region. As the harvests increase, so does the marketing. If time is insufficient to handle harvest season tasks, growing, hunting, harvesting, cleaning & grading, and marketing, then one of the first things generally considered is utilising a distributor.

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At first with a few kg harvested, there is perhaps an inclination to accept this dictated price, and assume it will all come good when production increases. But I suggest upcoming growers need to consider what will happen then?
If production begins to require full time work 6 to 8 months (or greater) per year, then it needs to pay a decent wage, let alone recover the substantial investment of time and money already sunk into the truffle orchard.  There also becomes the problem, can you visit enough venues that only buy a small amount, and often say “We still have some, come back next week”
{ I’ll repeat from part one, This may upset some, but if the 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.}

Message to growers

Don’t undersell your truffle, you will be cutting your own throat, as well as everyone else’s.

Is there an alternative?
Yes. Don’t make concessions, as your harvests grow, develop a market that appreciates what you offer, and stick to your price point!
Roughly half your truffle will have been lost to rot, a further significant percentage damaged, harvested underripe, overripe(while you learn better) and otherwise unsaleable. You are accepting those losses already, potentially unsold truffle needs to be regarded similarly. At least it can be used to improve your orchard, or you can freeze and sell for 50% (but don’t freeze and try to use in orchard, the spores get damaged, dry it instead)
As bad as that may sound, in all likelyhood you will find yourself with none left to eat most weeks, or only that which you refuse to sell because it’s not good enough.
If you choose to sell the poorer quality truffle, sell at your normal price and a suitable discount, or you’ll find the cheap price is your new price. ie pieces discount, minus 50c/g

A proper, well educated market, will also be the only way forward in future. In all likelihood, within just a few years, those same companies (or similar) currently distributing & exporting will begin importing southern hemisphere truffle from South Africa and South America into the Australian domestic market, making their quick profit and still saying “that’s the market”
How does $500/kg sound? Can the Australian market survive that? Should growers support these companies now in vain hope for better prospects in future?

Conversely, make sure what you offer is marketable.
I’ve gone back to past customers, who have been sold truffle well before the season had properly started, and had them state to me “We tried truffle a few weeks ago, it didn’t work well and didn’t sell, we won’t be buying anymore this year” Typically they’d been sold junk in May, early June.
Another absolute gem of a comment was an enquiry from a retailer “Do your truffles have aroma?”
This is another symptom of distributors out for a quick dollar, or of the orchards supplying them. In the past there have been Sydney distributors dumping last week’s unsold truffle in Melbourne.  Also forget trying to sell truffle in Melbourne after the festival, the last two years have seen unsold stock dumped at $1/g It was nearly two weeks old, I wonder what the consumers thought about their truffle meal.

I have little trouble selling direct to good restaurants at a reasonable price. Some of the restaurants I’ve approached have already had ‘export grade’ truffle in their fridge that cost them $1300-$1500/kg (not that they buy kg quantities) Yet they happily pay substantially extra for mine and become repeat customers.
Other venues are entirely price driven, there are numerous reasons to avoid associating your brand with them; cheap ingredients, insufficient truffle, truffle aroma added, not to mention the difficulty of extracting payment. They are welcome to their cheap truffle.

Why do some chef’s pay more when there’s cheap truffle available?
Why? That low price comes at a significant cost in quality and shelf life. The most obvious is freshness, be it a delay in shipping through intermediates, or perhaps it was last week’s unsold stock -which happens far too often.
A fully ripe truffle takes extra time and expertise, but it goes 2 to 3 times further on a plate, so they can improve the impact of the dish, at the same price point or even cheaper. Also it really doesn’t matter if there’s $4 or $6 worth on a $60 plate. Truffle is an ingredient that brings the Chef’s customers back for more, and therefore is/should-be exempt from the typical five-fold ingredient markup that covers all the associated costs.

Message to wholesalers

If I need to throw away my truffle at those prices, I’ll be throwing it direct to your customers… but for now… I’ll stick to the best interests of the industry,  shred it and return it into the orchard in ways with potential to improve the crop in future years. Like this 100g truffle from last year… which I didn’t have enough spare time to cook & eat, {60-70hrs/week supplying others}

Thanks for reading, draw your own conclusions, but I ask again,
“Why is truffle so cheap?”

PS. If you become a Medium size grower… you have a problem. Melbourne venues typically take 50-200g. You are going to need 30-40 of them buying to make minimum wage for the year’s work it takes for proper production. You will be able to physically visit 6-8/day.
With a wholesaler, you will need 10kg/week for 6 weeks to make minimum wage.