High Yield Agricultural Business

[flakes]

Hello,

Last week i was asked if i wanted to buy a cow..the price was 10.000 bath and if i would feed the cow for only ten months it should be albe to sell of for 20.000 baht. that means almost double the money within one year for me that sounds to good to be true right?

What would be the best and easiest way to be making money with agriculture? pigs cows ,fruits ,potatoes ? what can it be..?

lets say you have one million baht to invest just for example then how long before that gets back and or what monthly returns on the investment?

i plan to sell some property and am now orientating myself about investment options..

Now i do know that where i come from most farmers is usually complaining alot and probably that is in thailand somewhat the same however farmers in my country is belonging to the richest people.

So it cant be that bad

flakes

[IsaanAussie]

Flakes,

There is a common saying here in farming. If you want to have a million baht here, start with ten. There is no easy way you can make money farming, full stop.

IMHO one million baht is not near enough to establish a viable farming enterprise that includes even a simple farang lifestyle. Margins are very small and the majority of the industry is price controlled by vertically integrated agrobusinesses. For a small independant farmer your market is your neighbours, the bottom line being they dont have any spare money to buy anything but staples. For the big operations they succeed through dealing in huge volumes, like the rich farmers you mention probably do. Logistics costs of moving small volumes to niche markets make things very difficult now.

It is not impossible but difficult. Look at diversification, a little bit of everything. As for a 100% profit on growing out a cow, I simply do not believe it. I have a Thai neighbour who buys good quality cows, 3 at a time and does exactly what you have proposed. He makes 200 to 400 baht per beast, thats it. He also grows rice and seasonal vegetables, has fish ponds and does contract crop spraying. At a guess, he would probably make a gross profit of 200,000 baht per year. By the time he pays his bills he may make 50 to 75,000 baht per year.

Cost control is key for me. You buy at retail prices and sell at wholesale. So there is little margin available before you even start to look at any production risk or price fluctuation. The more self sufficient you can become the more cost you can eliminate. So my advice is to study the cost base first.

Isaan Aussie

[flakes]

Hi Isan Aussie,

Yes u probably right...focus on the cost and doing couple of things troughout the year and see what works the best..

about the one million baht its jsut an example..

But if i was going to invest 10 M baht in a condo then you can usually get monthly returns of arround the 5-6 % a month.So then for me to get out of the real estate industry and doing something in the argricultural sector it should pay of more simply because it seems to be much more work then renting out some condo..

I not so sure that farming will be more financial rewarding then real estate.

Sorry i need to correct that with a condo ofcourse you not make 5-6 % monthly i meant 5-6 % of the purchsase price yearly...so it give your revenue yearly of 500.000 600.000 and even that ofcourse is not a really good yield however its the truth.

Flakes,

There is a common saying here in farming. If you want to have a million baht here, start with ten. There is no easy way you can make money farming, full stop.

IMHO one million baht is not near enough to establish a viable farming enterprise that includes even a simple farang lifestyle. Margins are very small and the majority of the industry is price controlled by vertically integrated agrobusinesses. For a small independant farmer your market is your neighbours, the bottom line being they dont have any spare money to buy anything but staples. For the big operations they succeed through dealing in huge volumes, like the rich farmers you mention probably do. Logistics costs of moving small volumes to niche markets make things very difficult now.

It is not impossible but difficult. Look at diversification, a little bit of everything. As for a 100% profit on growing out a cow, I simply do not believe it. I have a Thai neighbour who buys good quality cows, 3 at a time and does exactly what you have proposed. He makes 200 to 400 baht per beast, thats it. He also grows rice and seasonal vegetables, has fish ponds and does contract crop spraying. At a guess, he would probably make a gross profit of 200,000 baht per year. By the time he pays his bills he may make 50 to 75,000 baht per year.

Cost control is key for me. You buy at retail prices and sell at wholesale. So there is little margin available before you even start to look at any production risk or price fluctuation. The more self sufficient you can become the more cost you can eliminate. So my advice is to study the cost base first.

Isaan Aussie

Edited April 29, 2011 by flakes

[IsaanAussie]

Flakes,

Let me offer an example of the integration of farming activities that I have which contribute to reducing external cost.

Firstly the basic operation is pig farming. The major element of cost is feed representing over 80% of my costs. Currently my few pigs consume about half a ton per week. Meaning that if I wanted to produce my own feed, I would need to grow 25 to 30 ton per year of cereal crops (dry weight). That on the 16 rai available is not possible so self sufficiency is a dream for me. However, by composting the manure of the pigs with rice hulls and straw I can generate income equivalent to 10% of the feed bill.

I will grow out cows as there is a small profit, but the manure from the cows is more valuable because it feeds the worms in our worm farm that produce worm castings which we can sell. As with the compost they are also used to improve our soil and reduce fertiliser usage and hence costs.The cows feed can be grown between rice crops and they eat rice straw from our annual crop.

The worms can be harvested for protein supplementation for the pigs as can a range of aquatic plants and native fish. Younger pigs require higher protein levels and the price of feed per kg is dependant on the protein level. So I can use a cheaper grade of palletised feed and build up the protein levels as needed in the different diets by producing the protein sources.

The point here is the more you can link everything together the more value you generate internally and external cost you can reduce. You still will only make local returns when you sell the cow or pig as a product, but during the time you own that animal can contribute more to your total operation. In the last six months I have on occasion made more money per pig selling the resulting compost than the pig itself.

Farming is a business. Most Thai farmers grow rice, chili etc. as monocrops that are not related to each other. Their methods and costs are the same as their neighbours and the returns are small. This is not how you compete in any business today. Constant improvement, value addition and cost reduction are the keys to being competitive to me.

[JungleBiker]

Hi IsaanAussie,

I guess you may have already considered these ideas but just in case you haven't...

Re growing your own pig feed with not much land, instead of cereal crops how about growing cassava roots (for the energy) and stylo leaves (for the protein)? Perhaps also throw in some broken rice and bran from the local rice mill? Plus you could still use some purchased feed to provide a more balanced/nutritious diet.

Re selling pigs for the same price as the locals, how about adding value by making your own ham, prosciutto, sausages, etc?

JB

[IsaanAussie]

Hi IsaanAussie,

I guess you may have already considered these ideas but just in case you haven't...

Re growing your own pig feed with not much land, instead of cereal crops how about growing cassava roots (for the energy) and stylo leaves (for the protein)? Perhaps also throw in some broken rice and bran from the local rice mill? Plus you could still use some purchased feed to provide a more balanced/nutritious diet.

Re selling pigs for the same price as the locals, how about adding value by making your own ham, prosciutto, sausages, etc?

JB

JB,

Thanks for that, yes I have thougt about that very hard and planted several crops as tests. Sweet potato is very viable, stylo I havent tried but have looked at. Dont worry though the plan is in place. My issue is the main plot is 12 rai and is very low lying. In the future I want to dig ponds and raise the level of this land.

On the value add side of things, drop in some time and try my back bacon (molasses and black pepper cured). If you want to order any pork to do it yourself, drop me a PM. Progress on sausages and hams has been slow due to time constraints here. But you are completely correct, it is the way to go and much cheaper than buying from Tescos.

IA

[JungleBiker]

back bacon (molasses and black pepper cured.

Sounds good - now I'm feeling hungry!

By the way, going back to the original topic, I would say that there is good money to be made in farming in Thailand but the challenge (like in many businesses) is be innovative - do something that others are not doing, or least not doing enough to meet market demand. IsaanAussie's biochar/compost/manure-based fertiliser and tasty bacon look like good examples but I am sure there are many more. Of course farming, when done properly is actually a very technical/scientific profession - that is one reason why most Thai farmers are not rich - they lack proper education in the subject.

JB.

[RedBullHorn]

erhh~~ i thought cassava roots contain traces of cyanide if it's not process properly ?...no?

Edited May 3, 2011 by RedBullHorn

[flakes]

I wish all of you guys farming more then the best...

For my self i might stick with the real estate for the time beeing...

But for in the future who knows

Flakes

[JungleBiker]

erhh~~ i thought cassava roots contain traces of cyanide if it's not process properly ?...no?

Yep, but I never said anything about feeding pigs with fresh roots. Methods of processing could be to chip the roots and sun-dry them or ensile them: Use of cassava products in feeding pigs www.fao.org/ag/aga/agap/frg/ahpp95/95-157.pdf

Thailand used to export huge quantities of sun-dried chips (and pellets made from these chips) to the EU for feeding pigs. The cassava products were cheaper than EU cereals. This upset the EU cereal growers so then the EU funded several projects in Isaan to get farmers to grow other stuff before they increased the import duties on cassava. One of the projects was a rubber tree project and that is one reason why you will now find many rubber plantations in the northeast.

I think these days most of the cassava is exported to China for making ethanol/bio-fuel.

JB

[IsaanAussie]

erhh~~ i thought cassava roots contain traces of cyanide if it's not process properly ?...no?

Yep, but I never said anything about feeding pigs with fresh roots. Methods of processing could be to chip the roots and sun-dry them or ensile them: Use of cassava products in feeding pigs www.fao.org/ag/aga/agap/frg/ahpp95/95-157.pdf

Thailand used to export huge quantities of sun-dried chips (and pellets made from these chips) to the EU for feeding pigs. The cassava products were cheaper than EU cereals. This upset the EU cereal growers so then the EU funded several projects in Isaan to get farmers to grow other stuff before they increased the import duties on cassava. One of the projects was a rubber tree project and that is one reason why you will now find many rubber plantations in the northeast.

I think these days most of the cassava is exported to China for making ethanol/bio-fuel.

JB

Agree with you completely. For me, our land is too low to grow cassava and it takes to long. Sweet potato is a faster result but needs processing as well. But to buy a truckload of cassava and chip it, that makes sense and is as JB said a lot cheaper than other cereal crops.

[rangnok]

simple way out, invest in bird nest farming. If invest in brand new (start from zero),got to wait 3yrs, to see the result i.e. substantial income BUT the value of your invest will keep increasing month by month, IF your bird nest farm/house successful. Successful meaning that have bird nest in it i.e. min. 50nest for 1st yr, over 150nest for 2nd yr and over 350nest the 3r dyr. Of course, the more the merrier. Current price of of bird nest BASED ON buying existing bird house, min. 7000baht/nest to 10,000baht/nest PLUS building price + land price. Monthly operation cost is dam_n low i.e. less than 1000baht.

i have few BHs which gave me about 100nest, 150nest, 200nest, 400nest and 700nest for 1st yr. All depending on the design and detailing.

if invest in successful bird house (BH), then u will have immediate income monthly, or fornightly depending on how success of the BH that invested. A succesful BH wuld give min. 10% return for 1st yr and thereafter easily 30% increase in monthly income and value of the BH.

Example of return from harvest.

BH with 1000nest = ave. - 3kg/mth x 40,000baht/kg. (120,000baht/mth). if near to Chinese festives season, the price goes up to 50,000baht/kg.

1sqm can accomodate up to min. 20nest (if full). so if your BH is 5m x 20m x 3level x 20nest/m2 = 6000nest.

Example of valuation of BH

BH with 1000nest = (8000baht/nest x 1000nest) + 2MB (3storeys building 5m x 20 incl. land cost) + 0.7MB cost for renovation to become BH = 10.7MB. BUT your return is 120,000baht/mth x 12 = 1.44MB/yr + min.30% increase yearly. Operation cost 1000baht/mth (for electric & water usage).

based the above BH valuation, if u are started from ZERO (brand new), your profit is 2MB for building + 0.7MB for renovation = 2.7MB capital, but now worth 10.7MB PLUS monthly harvest up to the day its sold.

BIRD NEST ALWAYS DEMAND MORE THAN SUPPLY.

this is only my bits opinion.

[flakes]

HI,

Well interesting i not heard of this before...

perhaps we can talk more about this topic ?

Flakes

simple way out, invest in bird nest farming. If invest in brand new (start from zero),got to wait 3yrs, to see the result i.e. substantial income BUT the value of your invest will keep increasing month by month, IF your bird nest farm/house successful. Successful meaning that have bird nest in it i.e. min. 50nest for 1st yr, over 150nest for 2nd yr and over 350nest the 3r dyr. Of course, the more the merrier. Current price of of bird nest BASED ON buying existing bird house, min. 7000baht/nest to 10,000baht/nest PLUS building price + land price. Monthly operation cost is dam_n low i.e. less than 1000baht.

i have few BHs which gave me about 100nest, 150nest, 200nest, 400nest and 700nest for 1st yr. All depending on the design and detailing.

if invest in successful bird house (BH), then u will have immediate income monthly, or fornightly depending on how success of the BH that invested. A succesful BH wuld give min. 10% return for 1st yr and thereafter easily 30% increase in monthly income and value of the BH.

Example of return from harvest.

BH with 1000nest = ave. - 3kg/mth x 40,000baht/kg. (120,000baht/mth). if near to Chinese festives season, the price goes up to 50,000baht/kg.

1sqm can accomodate up to min. 20nest (if full). so if your BH is 5m x 20m x 3level x 20nest/m2 = 6000nest.

Example of valuation of BH

BH with 1000nest = (8000baht/nest x 1000nest) + 2MB (3storeys building 5m x 20 incl. land cost) + 0.7MB cost for renovation to become BH = 10.7MB. BUT your return is 120,000baht/mth x 12 = 1.44MB/yr + min.30% increase yearly. Operation cost 1000baht/mth (for electric & water usage).

based the above BH valuation, if u are started from ZERO (brand new), your profit is 2MB for building + 0.7MB for renovation = 2.7MB capital, but now worth 10.7MB PLUS monthly harvest up to the day its sold.

BIRD NEST ALWAYS DEMAND MORE THAN SUPPLY.

this is only my bits opinion.

[Gary A]

There are always unforeseen risks in the farming business. Chickens and other livestock dropping dead, fish sick and floating and crop failures because of various reasons.

On my wife's 2nd farm she got two sugar cane cutting and now she has to plow it all up and replant. Even that is risky. Termites have killed a great number of the growing plants. Termites are not easy to kill and even deep plowing may not be enough. She is now trying to harvest enough neem leaves to plant alongside the new cane plantings. Apparently termites don't like neem oil or leaves. Pesticides are dangerous and also kill the termite predators.

I had no idea termites were a problem with sugar cane. There's always some type of problem for very little profit even if everything goes well.

[loong]

Rangnok, that's an interesting idea, but you really should point out, for the benefit of those who don't know, that this is not just any old bird's nest.

I don't pretend to be an expert. My only knowledge is from watching a documentary once.

In nature, the swifts/swallows nest in caves. The nests are not build from straw and twigs as one would expect, but actually the birds' saliva. Seems disgusting to me and at the price not something that I would want to eat.

In the documntary, the collectors travelled to the caves and basically risked their lives climbing up to the nests. One of the reasons that they are so expensive I think.

So how do you farm these? I would have thought that you would have to replicate their natural nesting conditions. I believe that you would also have to position the nesting site close to the sea. I think that there is only one place in Thailand that these natural nests are harvested and that is an Island. Can't remember where though.

[slapout]

Neighbor near us here outside Chiang Mai have made 2 rice harvests since the first of the year and just finished planting the third crop of rice.

This is the first time they have ever tried more than two rice crops on their land. Last harves (with machine) and replanted within one week. Will be interesting to see if they go for 4 crops.

[rangnok]

Hi Loong,

Bird nest farming is not really a new business anymore. Probably still new in thailand i.e. less than 15yrs. due to this business is so secretive, therefore, not many people know.

Yes, originally bird nest harvest from the cave. Due to is fully tenanted in the natural cave, we (the farmer) trying to 'copy' the similar micro and macro habitat in our BUILDING. The nest that we farming is refer to the supreme quality i.e. make from saliva of bird NOT twig/feather. Disgusting or not, well, depending on individual. As for chinese, bird nest is one of the medical prescription i.e. in chinese medical university in beijing and shanghai still have refer to bird nest. Anyway, we are talking about farming it not eating, therefore, no need to concern about personally like to consume or not.

As for cave nest, those day more expensive is simply or big factor due to labor cost. BUT now is not really due to labor cost but due to limitation of cave nest. The price of cave nest (raw nest) grade A & super easily fetch over 100,000baht/kg with over 30% moisture.

How we farm? we construct a building or modify existing building in accordance to the bird nest preference and play bird chirping sound/music to attract the bird to stay in the building. Of course, the design (layout) and facilities of building need to be well design too. Thailand bird nest from cave/island over 100 (based on study done by Chulalongkorn Uni).

[billd766]

Hi IsaanAussie,

I guess you may have already considered these ideas but just in case you haven't...

Re growing your own pig feed with not much land, instead of cereal crops how about growing cassava roots (for the energy) and stylo leaves (for the protein)? Perhaps also throw in some broken rice and bran from the local rice mill? Plus you could still use some purchased feed to provide a more balanced/nutritious diet.

Re selling pigs for the same price as the locals, how about adding value by making your own ham, prosciutto, sausages, etc?

JB

JB,

Thanks for that, yes I have thougt about that very hard and planted several crops as tests. Sweet potato is very viable, stylo I havent tried but have looked at. Dont worry though the plan is in place. My issue is the main plot is 12 rai and is very low lying. In the future I want to dig ponds and raise the level of this land.

On the value add side of things, drop in some time and try my back bacon (molasses and black pepper cured). If you want to order any pork to do it yourself, drop me a PM. Progress on sausages and hams has been slow due to time constraints here. But you are completely correct, it is the way to go and much cheaper than buying from Tescos.

IA

How do you do your molasses and black pepper cured bacon.

Out here in Khampaeng Phet I don't think I can find molasses but would honey be a suitable subtitute?