Biochar: “Tiz bit dear”

Tiz bit dearThe question of how to price biochar has come up many, many times in conversations over the past several years.  While there is no perfect answer, I would argue that the current price is still too expensive for biochar to become widely used.  Apparently SouthDevonGardener would agree!

Focusing on biochar’s use as a soil amendment there are a few major questions that need to be answered to come up with a price that will spur the market: 1) who are you selling to and 2) what other products are you competing with and what do those cost?  The question of target markets for soil amendments is pretty straight forward.  There are three basic categories: gardeners, the “green industry” and farmers. 

The gardening market is often biochar producer’s favorite category as gardeners are not generally focused on making a profit off their small plots so their price tolerance is generally much higher than other potential buyers.  The downside is that it is a much smaller market overall and volumes purchased per transaction are very small.  This $7.6B market is large and growing, but there is a lot of competition for soil amendments and a lot of big name players dominate.  While some small biochar producers may do quite well selling biochar locally, at a national level this is a tough market to penetrate for small producers.

The price for other soil amendments that biochar could displace within the gardening market should play a role in setting an attractive price for biochar.  To some extent it does – at least when sold in smaller packages (e.g. quarts or gallons) when compared to peat moss, perlite or vermiculite though not so much when compared to potting mixes which make similar claims to boosting plant growth that biochar producers tout.

Pricing biochar

Here is a quick look at biochar prices on Amazon as compared to a few other soil amendments (I’m not a big fan of buying any kind of soil amendment on Amazon – but it provides for easy comparisons!):

Price comparison

Within the larger ‘green industry’ (~$130B) is the $20B greenhouse, nursery floriculture industry which could be a good recurring buyer for biochar.  However selling to this industry is a tad more challenging as they are much more savvy about soils and specific plant needs than many in the gardening crowd.  They are also much more focused on improving their bottom line which means increasing yields, decreasing costs and preferably both.  They buy in larger quantities (i.e. cubic feet, yards or by the ton) and are looking for much lower unit prices than gardeners.  While the costs for larger quantities is harder to pin down, it is still not close to the cost of other soil amendments.

In a recent plant trial that I was associated with, we used a commercial biochar which produced solid yield increases but when the cost of the biochar used in the potting mix was factored into the overall profit that would result from the two crops (i.e. lettuce and basil), the net financial result was negative for the farmer as compared to the net profit associated with the control in all but one scenario.    

While this is obviously only one trial, it is critical to consider the economics of yield increase versus cost increase.  Greenhouse growers generally do not reuse potting soil to reduce the spread of disease or because the potting soil is sold with the product.  To compete effectively in this market then, the price of biochar needs to come down to something that more closely mirrors the bulk cost of other potting soils used by greenhouse growers.



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