Growing capsicum and chilli
Before you start
Jerry Lovatt, Ross Wright and Des McGrath, Department of Primary Industries and Fisheries.
(This information was extracted from the Agrilink Capsicum and Chilli Information Kit, which provides information on aspects of growing and marketing capsicum and chilli in Queensland).
On this page:
Introduction
This is a checklist of the essential things you need to know before you start growing capsicum and chilli. It will help you make the right decisions. More detail on important areas is provided in other sections of the Agrilink Capsicum and Chilli Information Kit.
An overview of the Queensland capsicum and chilli industry
Capsicums and chillies were grown on about 2128 ha and were worth $64.9 million for around 37 240 tonnes produced in Queensland in 2002-03 (Source: Australian Bureau of Statistics). Queensland produces about 91% of the volume of the Australian crop and 90% of its value.
In Queensland capsicums and chillies are grown year-round. The industry has many relatively small growers cropping less than 10 ha, but an increasing amount of production is from a few large growers. About 55% of Queensland's production is from the Bowen-Burdekin region and 30% from Bundaberg; other production areas include the Lockyer Valley and Stanthorpe districts. Bowen-Burdekin production is mainly in late autumn, winter and spring, Bundaberg produces from autumn to early summer and Stanthorpe and the Lockyer harvest through summer.
In the Bowen-Burdekin region, five growers each produce more than 80 ha and another 10 to 15 growers each crop more than 50 ha.
The industry is subject to erratic profit margins, aggregation of farms and a trend to larger individual holdings. There is some fluctuation in the numbers of smaller growers who produce capsicums each year. Several larger packing houses take product from growers of intermediate size.
Most capsicums are sold as fresh product but a few are processed.
The chilli market is small but increasing. Chillies are produced in small quantities for the fresh market as well as some small-scale processing for powder and paste.
Queensland capsicums and chillies are marketed throughout Australia, with the main sales centres being Sydney, Brisbane and Melbourne. About 2% of Australian production was exported in 2002-03, with 82% of this going to New Zealand, 7% to south-east Asia and 11% to the Pacific islands and other regions (Source: The Australian Horticulture Statistics Handbook 2004).
SWOT analysis
Table 1 lists the Strengths, Weaknesses, Opportunities and Threats (SWOT) affecting the capsicum and chilli industries.
Table 1. Factors affecting the capsicum and chilli industries
Strengths |
Weaknesses |
Opportunities |
Threats |
| Production technology | Limited domestic demand | Processing-paste and paprika |
Tomato spotted wilt virus (TSWV) Capsicum chlorosis virus (CaCV) |
| Culinary interest | Limited export opportunities | Processed product for pizza | Low cost imports of processed product |
| Few production problems | Quality Assurance (QA) programs | ||
| Postharvest management | Small increase in exports to New Zealand |
Know what you are getting into
A high level of management skill and knowledge of the crop is needed to grow and market capsicums and chillies successfully. Poor management of cultural operations can seriously reduce yields and quality.
The market price fluctuates considerably and unpredictable prices make income forecasting difficult. There can be large variations in price and yield, depending on supply, and the weather and seasonal conditions, which affect yield, quality and demand. Wet weather can seriously reduce marketable yields and the quality of the remaining crop. Pests and diseases can cause heavy losses.
Growers should do everything possible to ensure capsicums are handled with care throughout harvesting and marketing. Careful handling will limit mechanical damage, and bruising and infection by bacterial and fungal breakdown organisms.
The capital cost of irrigation, spraying, harvesting and packing equipment is high.
There is a heavy requirement for labour for harvesting and packing, and reliable, quality labour may be hard to find. The cost of harvesting capsicums can be greatly reduced by using harvest aids.
What you can expect to make
Yields
Yields vary considerably depending on climatic conditions, pests and diseases, and season. Average yields per hectare for crops over all seasons are 4000 to 5000 x 8 kg cartons for capsicums and 6000 to 7000 x 3 kg cartons for chillies.
Not every crop grown can be expected to reach average yields because of the severe impact of wet weather and pest and disease incidence on yield and quality. Knowledge of Integrated Pest Management (IPM) is desirable because of the high pest and disease pressure.
Prices
Prices vary greatly depending on quality and supply.
Capsicums. Prices vary from $2 to $70 per 8 kg (27 L) carton, with an average of $11 to $13 over all varieties of capsicums. The highest prices are usually paid for red fruit, followed by green, with cartons of mixed coloured fruit being least popular. At times of oversupply prices can fall to below the cost of production. For a 4000 carton per hectare crop grown in Bowen and sold in Brisbane, the break-even price in 1999 was about $8.30 per 8 kg carton of green capsicums.
Chillies. Prices vary from $1 to $15 per kilogram for all varieties of chillies with an average of $5/kg. The highest prices are paid for small, hot chillies, which are normally sold in 9 L cartons weighing 2.5 to 4 kg per carton. For a 6000 tray crop of hot red chillies grown in Bundaberg and sold in Sydney, the break-even price in 1999 was about $14.25 per 3 kg carton.
The graphs show average prices and throughput at the Brisbane market for 2001 to 2003, this information was provided by Market Information Services. The bigger the variation above or below the average price, the greater the opportunity or risk involved.
Figure 1. Average monthly price of green capsicums at the Brisbane market 2001 to 2003
Figure 2. Average monthly price of red capsicums at
the Brisbane market 2001 to 2003
Figure 3. Average monthly price of hot red chillies at the Brisbane market 2001 to 2003
Figure 4. Throughput of capsicums and chillies at the
Brisbane market 2001 to 2003
Production costs
Table 2 shows the estimated average costs in $/ha of producing capsicums in Bowen and chillies in Bundaberg.
Table 2. Estimated average costs in $/ha (1999)
Costs |
Capsicums (4000 cartons/ha) |
Chillies (6000 cartons/ha) |
||
|
$/carton |
$/ha |
$/carton |
$/ha |
|
| Growing (pre-harvest) |
$2.27 |
$9 067 |
$1.66 |
$9 932 |
|
Harvesting (pick, pack, cool and carton) |
$3.70 |
$14 789 |
$9.71 |
$58 260 |
|
Marketing (freight and commission) |
$2.56 |
$10 232 |
$2.98 |
$17 880 |
|
Total |
$8.52 |
$34 087 |
$14.35 |
$86 072 |
Gross margin
The 1999 gross margin (income after deducting growing, harvesting and marketing costs) is shown in $/ha and $/carton in Table 2 for a market price of $10 per 8 kg carton for capsicums and $15 per 3 kg tray for chillies. To determine your net income, you need to deduct fixed costs such as rates, depreciation, electricity and living expenses.
The capital you require
You would need more than $250 000, which includes the minimum amount of new equipment, to set up 10 to 20 ha of crop per year. Table 3 shows essential and optional machinery and equipment.
The farm you need
Soil
Capsicums grow best in deep, well-drained, medium-textured soil, for example, loams, but can be grown in a wide range of soil types. Soil should be at least 30 cm deep, the main requirement being good drainage.
Climate
Capsicums are particularly sensitive to cold and growth is inhibited below 10°C. When growing seedlings, plastic-covered igloos or any similar structure covered with plastic should be used to reduce frost risk.
Pollination is poor in very hot (above 32°C) or very cold (below 15°C) weather. For these reasons autumn, winter and spring production is most common in north Queensland and Bundaberg, and autumn and spring production in other south Queensland districts. Prolonged wet weather causes severe disease pressures so do not plant crops to grow through times when these conditions can be expected.
Rain and high humidity can increase development and spread of diseases, particularly bacterial spot. Low humidity favours mites and powdery mildew. Wind can cause fruit rub and blemish and increase water stress, resulting in the development of the fruit disorder blossom-end rot.
Slope
Uniform slopes are desirable, but not essential. Erosion can be a problem on steep slopes, while depressions can result in waterlogging. The slope can also govern the type of irrigation that can be used.
Slopes below 5% are not a limitation, but slopes above 5% require recognised soil conservation practices. Slopes above 10% make operations involving machinery hazardous and maintaining uniform irrigation can be difficult.
Water
All crops are grown using trickle irrigation and plastic mulch. Up to about four megalitres (ML) per hectare of water is required.
Capsicums will not tolerate saline irrigation water. At the seedling stage water conductivity should be below 1200 microSiemens per centimetre (µS/cm). When grown under furrow or trickle irrigation, water with an electrical conductivity (EC) up to 2000 µS/cm can be used on some soils provided careful management practices are followed. Capsicums grown under overhead irrigation are more sensitive to saline irrigation water because of leaf contact with the water.
The machinery and equipment you need
Table 3 shows the essential and optional machinery and equipment for a capsicum production unit. The prices are estimates only. Second-hand machinery would normally cost less than half the new cost.
Table 3. Estimated cost of new machinery and equipment (1999)
Equipment |
New price $ |
| Essential |
|
| Tractor (26 kW) for planting, cultivation and spraying |
30 000 |
| Tractor (45 to 60 kW) for plough, ripper and rotary hoe |
50 000 |
| Farm truck |
30 000 |
| Bed-former, plastic and trickle tube layer with fertiliser box |
8 500 |
| Waterwheel transplanter |
3 500 |
| Grader (creep feed, brushes, inspection table, pack-off belt) |
20 000 |
| Bin tipper |
1 000 - 5 000 |
| Scales |
1 800 |
| Spray equipment for crop |
10 000 |
| Spray equipment for interrow herbicides |
4 000 |
| Half-tonne bins (each) |
100 - 170 |
| Buckets (each) |
5 |
| Shed fork-lift |
30 000 |
| Pallet jack |
650 |
| Cultivation equipment |
20 000 - 25 000 |
| Irrigation equipment ($/ha) |
2 500 - 4 500 |
| 12 to 20 pallet cold room |
25 000 |
| Mulch gatherer |
8 500 |
| Slasher/pulveriser |
3 000 - 6 000 |
| Optional |
|
| Seedling nursery |
5 000 |
| Harvest aid |
25 000 |
The labour you need
Two field workers could grow 20 ha of capsicums or chillies to the harvesting stage. The main labour requirement is for harvesting and packing.
A standard picking rate for capsicums is about 30 to 50 cartons per person per hour, depending on whether hand-picking into buckets or using a harvest aid, amount of fruit set, harvesting method and colour of fruit being harvested. A standard grading and packing rate is about 25 cartons per person per hour, but this depends on fruit quality and the equipment being used.
Chillies take much longer to pick and pack. Growers often pay a contract rate rather than an hourly rate for picking and packing chillies. For the larger chillies an average picking rate would be about 20 kg per hour, while for the small types the rate would be about 6 kg per hour.
Other considerations
Hard physical work is needed. There is a high labour requirement in all facets of production. These include land preparation, mulching and laying trickle tube, pest, disease and weed control, irrigation, picking and packing.
Management skills or access to consultants with these skills are required for managing finances, staff and the crop. Skills in machinery operation and maintenance, and the ability to read and understand chemical labels, are essential. Careful attention to detail is necessary to be a successful grower.
Some capsicums and chillies are sold to processors, which broadens the marketing options for these crops.
Quality of the end product is the most important factor in successful capsicum production. This starts with good land preparation and variety selection and continues through the growing of the crop to careful harvesting, grading and marketing of the fruit.
Further information
The complete Agrilink Capsicum and Chilli Information Kit, produced by the Agrilink Information Unit of the DPI&F, provides information on all aspects of growing and marketing capsicum and chilli in Queensland.
The kit includes the following sections:
- Before you start
A checklist of things you need to know before you start growing the crop.
- Common questions
The 20 or so most commonly asked questions about growing the crop.
- Growing the crop
Our guide for establishing, producing and marketing the crop.
- Key issues
Detailed information on the key decisions affecting the crop.
- Problem solver
A picture series of the common problems and how to solve them.
- Contacts and references
A list of industry organisations, product suppliers, and further reading.
- Index
An A to Z index to help you find information quickly.
- Your information
A place to store your special information.
To contact Agrilink for further information on the Agrilink series, visit http://www.dpi.qld.gov.au/agrilink/4693.html.
DPI&F's information and services
To access information not covered in the sources above, Queensland residents can contact the DPI&F Business Information Centre on 13 25 23 for the cost of a local call. The Business Information Centre is open 8 a.m. to 6 p.m. Monday to Friday (excluding public holidays); E-mail callweb@dpi.qld.gov.au. Non-Queensland residents phone (07) 3404 6999.
This DPI&F Note is also published on the DPI&F's PrimeNotes CD-ROM.
Industry links
Industry links is a page of links to various sites of interest to horticultural growers.
Information contained in this publication is provided as general advice only. For application to specific circumstances, professional advice should be sought. The Department of Primary Industries and Fisheries, Queensland has taken all reasonable steps to ensure the information in this publication is accurate at the time of publication. Readers should ensure that they make appropriate inquiries to determine whether new information is available on the particular subject matter.
Last updated 21 June 2005