Ginseng: Root for the Home Team

Harold Schumacher installed an electronic ticker tape in his barn so he could keep close tabs on his favorite stocks. But a much greater gamble than playing the market lies right outside the barn.

That’s where the Schumacher family has invested hundreds of thousands of dollars in an ugly brown root used for centuries in China to cure everything from high blood pressure to flagging sexual desire.

Just a few years ago, the gamble was paying off. Farmers wired their barns with high-tech security systems and slept in their fields with shotguns to protect the bright red seeds that produce Wisconsin ginseng, a crop so valuable it is sold in Asia in packages carrying a special seal of authenticity.

But today, the same people who financed luxury homes and fishing boats off the ginseng harvest are fighting to stay afloat as root prices plunge to $10 a pound, the lowest level in more than four decades.

Theirs is the story of a folksy, little-known corner of the farming world caught in a time warp--its ancient product poised to exploit the boom in Eastern medicine but its growers suddenly beset by competition and powerful economic forces they are ill-equipped to counter.

Though long known as an Asian medicine, ginseng has been exported from America since the 18th century--nearly all of it cultivated in Wisconsin. The soil, weather and growing techniques developed here produce a plant coveted in Asia for healing powers reputedly greater than those of roots from Korea and China.

Growers here could live with the fierce new competitors from Canada and the flood of counterfeit “Wisconsin” ginseng--some of it grown overseas with seeds sold by Wisconsin growers, an act of disloyalty akin to cheering against the Green Bay Packers.

But the 1,300 ginseng farmers in Wisconsin are no match for the repeated waves of financial turmoil that have washed over Asia and infected much of world commerce.

“Ninety-seven percent of our market is the Orient,” lamented Schumacher, who began growing ginseng as a hobby 40 years ago and now works his small farm full time with his three sons. “It’s just so far away. We feel so helpless.”

Like most farmers here, the Schumachers are convinced the economies of Asia will eventually recover. But their woes are broader than that. Wisconsin’s ginseng growers--a historically secretive and mutually suspicious lot--have decided they must reinvent themselves to survive.

So, after more than a century of depending on trade across the Pacific, they are looking closer to home--where, ironically, most ginseng is imported from Asia because it’s cheaper. They are developing a U.S. mail-order business in the Chinese-language press and pushing sales to store owners in communities like Los Angeles’ Chinatown and Monterey Park.

They also are coming up with products designed for Western taste buds: ginseng candy, ginseng soda pop.

To contemporize what ginseng image there is, the Ginseng Board of Wisconsin is sponsoring a bicycle team with a likeness of a giant ginseng root emblazoned on its skintight uniforms. And it has passed out recipes for ginseng and beef and “sex muffins.”

Farmers Finally Talking to Each Other

Wisconsin’s once close-mouthed ginseng farmers also are finally starting to talk to each other. As growers of other crops have done for centuries, they are swapping tips on fungicides, sharing marketing advice and even considering setting up a cooperative to sell their crop.

“We acknowledge we are competitors,” said Lyonel Wisnewski, a stockbroker-turned-ginseng farmer who recently traveled to Vancouver, Canada, to meet with growers there. “But we still have to join together for the long-term survival of the industry.”

Ginseng’s nutritional and medicinal values remain the subject of heated debate in the West. Scientific research is just beginning into claims that the popular herb helps regulate blood pressure and reduce the likelihood of cancer.

But in recent years, growing interest in Chinese traditional medicine and the health preoccupations of America’s baby boomers have boosted ginseng sales in the United States.

Ginseng extract has become a popular pick-me-up among long-distance truckers. A January issue of the Sun tabloid reported on “Ginseng, the Miracle Herb. New Supercures for Blood Pressure, Diabetes, Cancer, Aging, Stress and More.”

But most of the products sold in this country use ginseng grown in South Korea and China because it is cheaper than the Wisconsin variety. Farmers here hope they can convince more Americans that Wisconsin ginseng--preferred by Chinese because it is stronger--is superior and worth the extra money.

“If we can’t market our own product, it really doesn’t pay to stay in the business,” said Schumacher’s son, David.

For the residents of Marathon County, a picturesque region of rolling hills dotted with hardwood forests, the last few years have been a sobering reminder of the fickle nature of global trade.

Wisconsin’s farmers, who produce virtually all the ginseng grown in the U.S., are hardly novices to international commerce. Since the mid-1700s, North American traders began including wild ginseng in their shipments to China.

John Jacob Astor was among the pioneers who got rich off wild ginseng. In 1860, more than 600,000 pounds of the bitter root were exported from the United States, according to the Ginseng Board.

It was the four Fromm brothers, enterprising fox and mink farmers from this part of north central Wisconsin, who a century ago were said to have perfected the art of growing ginseng--or shang, as it came to be called here--a finicky plant that takes at least four years of careful cultivation to reach harvestable size.

While wild ginseng grows in several regions of the United States, it is the climate and glacial soil found in this part of rural Wisconsin that produces the most sought-after cultivated ginseng in the world.

The Wisconsin variety of American ginseng, a cousin to the Oriental ginseng found in China and Korea, has a strong taste that is coveted by the Chinese for its purported healing qualities. American ginseng is said to have a soothing, cooling effect on the body, while Asian ginseng is a stimulant.

“The Chinese have a saying: The more bitter, the better,” explained Ron Rambadt, executive director of the Wausau-based Ginseng Board.

Market for Ginseng Took Off in 1970s

The market for cultivated ginseng took off in the 1970s, spurred by the opening of China and the disappearance of wild ginseng, which is now protected as an endangered species under the same conservation treaty that protects the African elephant.

The 1970s and 1980s were boom years for Marathon County, when the price of ginseng soared to more than $70 a pound for roots and $125 a pound for seed.

By 1994, U.S. ginseng exports were valued at $104 million and Wisconsin ginseng had grown from an exotic farming hobby into the state’s most lucrative agricultural export. Wisconsin’s ginseng sales to Asia brought in as much money as California’s exports of wheat, broccoli or grapefruit.

In October at harvest time, the motels in the city of Wausau filled with Asian buyers who made the rounds of the farms armed with cash and checkbooks. When milk prices slumped, dairy farmers sold their cows and started growing ginseng. Farm-equipment dealers stocked up on the modified potato harvesters that are used to dig up the gnarly roots.

Foreign companies like Yat Chau, a large Hong Kong herbal medicine company, set up shop in tiny Marathon City to grow and purchase ginseng to send home. Wisconsin farmers who had never left home found themselves on trade missions, wandering the back roads of Hong Kong and China.

Grower Larry Berens became a convert to Chinese traditional medicine after visiting herbal shops and factories in Asia.

“I’ve seen people’s eyes light up in Hong Kong and China when I tell them I’m a Wisconsin ginseng grower,” said Berens, who recently exported his first shipment of Golden Destiny ginseng cognac to China. “It just takes one of these products to hit and make those Western doctors start opening up their minds.”

When Paul Hsu, a Taiwanese immigrant, decided to go into the ginseng business in 1975, there was just a handful of Asians living in this rural community. But over the years, the region has taken on more of an Asian flavor, with Chinese names on signposts and ginseng products in the supermarkets.

“A lot of my customers became competitors,” said the former social worker, whose Wausau-based Hsu’s Ginseng Enterprises Inc. brings in $20 million a year.

Hmong Refugees in Wisconsin

The region’s Asian population also got a boost from 5,000 Hmong refugees, many of whom were recruited by the CIA as guerrillas during the Vietnam War and were eventually resettled in the United States. The Hmong, who were mostly farmers in their native Laos, came to Wausau seeking jobs in the ginseng business. Many have now become ginseng farmers themselves.

But one thing didn’t change: The fiercely independent ginseng growers protected their secrets like gourmet chefs or perfume chemists, convinced that their proprietary soil mixture or planting treatment could be the difference between prosperity and failure.

This secrecy, some might say paranoia, tore apart friendships and families. It also made it impossible to start up the marketing and sales cooperatives that might have made it easier for the ginseng industry to protect itself from predatory pricing and foreign competition.

Even during the best of times, ginseng is a risky venture. One acre requires an investment of up to $125,000 for the land, seeds, water, fertilizer, pesticides and labor.

And for some mysterious reason, a piece of land can only be used once to grow the finicky plant, which sends its roots into the ground like a potato and is notoriously vulnerable to excessive temperatures, water or pests.

Whatever the cause, woe to the farmer who tries to grow ginseng on a piece of land that is “shanged out.”

“We don’t know if ginseng takes something out of the ground or puts something in the ground,” admits Roger King, who sold his recreational vehicle business and started growing ginseng.

Many of the century-old techniques developed by the Fromm brothers are still in use, including the wood-covered arbors that create the deep shade needed for the roots to survive.

In the fall, the roots are dug up and loaded onto large wagons to be washed, then placed in giant drying racks in climate-controlled rooms for several weeks. Then they are sorted into airtight bins by size, color and other characteristics.

But those years of hard work translate into far fewer dollars today, with trouble coming from all directions--including right here in Marathon County.

Up north, Canadian farmers--prompted in part by a Wisconsin ginseng-growing emigre--have built up a huge ginseng industry in less than two decades. Last year, ginseng farmers in Ontario and British Columbia edged out their U.S. competitors for the first time with a harvest of more than 3 million pounds. Marathon County farmers blame a glut of “inferior” Canadian ginseng for driving down prices.

They also have seen the appearance on world markets of Chinese-grown ginseng produced from Wisconsin seed. This has pitted neighbor against neighbor, since many ginseng farmers here have made a pretty penny by selling seed to foreign buyers--in effect, locals grumble, selling the future out from under themselves.

“On a short-term basis, it’s hard to say no to $150,000 [in seed sales], but if you’ve got children or grandchildren, it’s the absolutely worst thing to do,” said Wisnewski, a Ginseng Board member.

Sales also have been hurt by a sharp rise in low-quality Chinese or Korean ginseng masquerading as Wisconsin product. Aided by state officials, the Ginseng Board has persuaded the Hong Kong and Chinese governments to crack down on mislabeled ginseng.

They also developed a Wisconsin seal of authenticity that is difficult to reproduce and is affixed to ginseng packages sold overseas.

But such problems have been overshadowed by the economic turmoil sweeping Asia, which already has led to the bankruptcy of several large ginseng importers and has suppressed the overall appetite for U.S. farm exports, 40% of which go to Asia.

Rambadt, of the Ginseng Board, said the problems in Asia--chiefly the plummeting value of local currencies that effectively prices American ginseng out of reach--are already being reflected in canceled orders, delayed payments and sagging prices.

Some growers are leaving the roots in the ground rather than sell at fire-sale prices--a risky strategy because disease or bad weather could ruin the crops. Others are harvesting and storing the roots while awaiting higher prices. And many have cut back on their plantings.

“We’ve alerted our growers to not sell on terms,” Rambadt said. “Your buyer might be the nicest guy in the world, but if his bank closes, your product is gone. Then you’ve not only sold at a low price, you’ve sold for no price.”

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The Spin on Ginseng

What: A perennial herb that contains substances known as ginsenosides as well as vitamins and minerals. For thousands of years, the root was revered in China, where wars were fought over it. Wild ginseng, exceedingly rare, can fetch $20,000 an ounce in Asia.

Varieties: Asian ginseng (Panax ginseng). Widely cultivated in China and Korea. Comes in white, natural, or red processed varieties. The kind usually found in herbal medicines available in the United States.

American ginseng (Panax quinquefolium) : Grown mainly in Wisconsin and Canada and sold chiefly in China. Contains a much higher concentration of ginsenosides than the Asian variety. This reputedly increases its potency and thus its price.

Use: A root, it was traditionally consumed raw or by boiling slices in water or mixing it into food. Now it also is ground into powder and ingested in capsule form or mixed into drinks or food as flavoring. There are ginseng drinks, candy, liquors and even body creams and shampoos.

Effects: Scientific evidence is sketchy, but proponents believe ginseng is an “adaptogen” that helps the body react to different stresses and can control blood pressure, boost the immune system, reduce cholesterol, improve the nervous system and increase sexual energy.

Source: The Ginseng Research Institute of America