Rubber Trees

[scotbeve]

Not if you can get some regular sunshine...

Our trees are 13 years old.

This is our 6th year tapping.

I'm pretty hands on on our plantations. That's 13 years of overseeing planting and fertilizing and upkeep. 13 years of driving tractors.

I keep pretty good informative books.

THIS is our WORST June, production wise in 6 years. That included years ago when we were tapping far fewer and less mature trees.

Yes. Very sad this year. My B in law is even more sad as he is only getting his Or Bor Tor salary. But looking over the 5 years of tapping results, our area wasn't the ideal area to plant rubber. Still selling our whole lot of 130 + rai of rubber, the (large) farmhouse w/pool + huge workshop area, and 3 shophouses here in Chiang Mai. Sigh.....

[cobbler]

Not if you can get some regular sunshine...

Our trees are 13 years old.

This is our 6th year tapping.

I'm pretty hands on on our plantations. That's 13 years of overseeing planting and fertilizing and upkeep. 13 years of driving tractors.

I keep pretty good informative books.

THIS is our WORST June, production wise in 6 years. That included years ago when we were tapping far fewer and less mature trees.

Yes. Very sad this year. My B in law is even more sad as he is only getting his Or Bor Tor salary. But looking over the 5 years of tapping results, our area wasn't the ideal area to plant rubber. Still selling our whole lot of 130 + rai of rubber, the (large) farmhouse w/pool + huge workshop area, and 3 shophouses here in Chiang Mai. Sigh.....

Scot it was the goverment who encouraged people to plant yang in these places which are clearly not suited to grow yang. Many other crops can make more money than yang in some areas. Its the same with palm oil. The take photos of massive palm oil trees in the south then start selling the idea to issaan farmers. Not telling them that low lieing areas with good water holding ability in the soil followed by a 6 month dry period is not suited to palm oil. The government people only care they get a cashcow from any sales they promote. Its the same with yang. Take photos of massive yang from the south with a girth of 3 metres. Then sell the idea in isaan. No rain going in ,no yang coming out its that simple. We notice if we dont get rain for 2 weeks,production starts dropping off. How about 3 or 4 months like in some areas of thailand? My advice is go to kings project. I would trust these people.

Cheers Cobbler

[scotbeve]

Not if you can get some regular sunshine...

Our trees are 13 years old.

This is our 6th year tapping.

I'm pretty hands on on our plantations. That's 13 years of overseeing planting and fertilizing and upkeep. 13 years of driving tractors.

I keep pretty good informative books.

THIS is our WORST June, production wise in 6 years. That included years ago when we were tapping far fewer and less mature trees.

Yes. Very sad this year. My B in law is even more sad as he is only getting his Or Bor Tor salary. But looking over the 5 years of tapping results, our area wasn't the ideal area to plant rubber. Still selling our whole lot of 130 + rai of rubber, the (large) farmhouse w/pool + huge workshop area, and 3 shophouses here in Chiang Mai. Sigh.....

Scot it was the goverment who encouraged people to plant yang in these places which are clearly not suited to grow yang. Many other crops can make more money than yang in some areas. Its the same with palm oil. The take photos of massive palm oil trees in the south then start selling the idea to issaan farmers. Not telling them that low lieing areas with good water holding ability in the soil followed by a 6 month dry period is not suited to palm oil. The government people only care they get a cashcow from any sales they promote. Its the same with yang. Take photos of massive yang from the south with a girth of 3 metres. Then sell the idea in isaan. No rain going in ,no yang coming out its that simple. We notice if we dont get rain for 2 weeks,production starts dropping off. How about 3 or 4 months like in some areas of thailand? My advice is go to kings project. I would trust these people.

Cheers Cobbler

Hi Cobbler,

Yes, indeed..... The saying Kee Nah comes to mind. We had the same problem with our golden teak plantations..... Planted, cared for them, waited 26 years until the girth was a decent size, and was told by the provincial bah mai that we have to jump hoops for 12 agencies to export it.... Kah-ching to the max. Forget it.... Sold the timber locally. My sister-in-law is the president of the rubber assoc in our district so we indeed know that we were duped by the government again... Although, it was after the high price days and the 3 country rubber consortium went by the wayside.. Selling the land is much more profitable than farming. We've done quite a bit in our day including running all the farm & construction equipment. An "okay" income. But now it's time to hang up the straw hat, collect rentals, and play with the grand child.

Good luck to all in your endeavors.

Best regards,

Scott

[Dakling]

Pretty depressing to see guys who seem to know what they are doing throw in the towel.

I never got into farming to get rich or anything, it was more of a way to keep the fam damily busy. I would like to get my money back out of it though. Not sure with current prices how long that will take.

The only saving grace for me is that we got the land pretty cheaply, so far I figure I am only 1m baht down to date (5 years in). Land is worth more than that even without the trees though god knows if I could ever sell it even if I wanted to.

We have some cassava as well and prices for it seem pretty low these days too.

[thaiguzzi]

It's not as bad as a lot of people make out. Sure, it's not as great as i imagined many years ago, but nobody foresaw the markets/banks crash and current price drops.

So, i had a quick peruse of the books.

In 13 years, we've spent 3.6 mil on the plantations. That's purchasing land (very cheaply) in blocks of 28, 10+10, and 16 rai, a total of 64, all pretty much together, 36 of which surround our house. Buying and planting, and replanting trees, tractors and ancilleries, farm truck and accessories, all labour costs, fertilizers and monthly overhead costs of diesel, petrol, formic acid, plastic sacks, you name it, everything.

I've now got our yearly overheads down to around 50k, but that's mainly due to one fertilizer session annualy rather than two.

This is our 6th season tapping 38 rai, the other 26 rai has been tapped for 3 seasons.

We've pulled in around 3 mil gross in those 5 seasons, of which 1.6 mil is nett profit after everything, inc worker's percentage splits.

The land, if i were to sell it, is worth at least 100k per rai, even at today's lower prices (from 4 years ago when Southerners were coming up here and buying land at 150-175k per rai), that's a minimum of 6.4 mil.

So, at today's current shitty prices, another 5 years and we'll have more than broken even. And still got the land...

Not too shabby....

[Dakling]

^ Your costs seem pretty similar to ours. We have 26 rai in Rubber trees and another 10 rai of cassava. The cassava is definitely better financially with the current low prices of rubber but if prices rebound to the 30-35 b/kg range over the next few years the rubber might turn out to be the better performer. We have cut a few corners to try keep costs down but have been taking care of the trees pretty well. Had fire on our best bit of land about 14 months ago that killed about 50 trees and damaged over 100 more, hopefully the surviving trees won't have production issues when they mature. We likely could start about 1/2 our best bit of land (13 rai) after only 6 years as the trees are doing very well but we likely will hold off until year 7 anyhow as with these prices it will be hard to find cutters to do so few trees with low production.

Thanks for the details on your farm, nice to see that even at these prices there is some money to be made down the road. Maybe we will get lucky and prices will recover in the near future. After all as a percentage of total annual production the oversupply is actually quite small. Hopefully the low prices will also have southern production areas shift to other crops as trees come off production due to age. We may see 50 b/kg again someday......I would be happy to see 30 b/kg for now though.

[patongphil]

A question for all you rubber guys. I know nothing about rubber but walk/run in the plantations regularly. Last week I saw, for the first time, syringes attached to some large older trees as well as about 40 cm of tubing. Was just wondering what these are for?

[thaiguzzi]

Heroin?

[Mosha]

When you say older trees, how old?

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[Mosha]

Could have a few chickens before long. Can I use the droppings to feed the trees? If so do I needs to mix it with anything?

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[scotbeve]

Better if is dried out chicken poop....

[Mosha]

Thanks.

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[thaiguzzi]

# Sold at auction yesterday, 25.33 baht per kg. First decent output of this season, too, due to better, cooler, drier weather.

# Chickens. And chicken crap. Just let them wander and crap where they want. No harm whatsoever to the trees, and good for the soil.

[Mosha]

I'm not letting them wonder, bloody fighting stock wandering all over the place..

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[fezzy]

A question for all you rubber guys. I know nothing about rubber but walk/run in the plantations regularly. Last week I saw, for the first time, syringes attached to some large older trees as well as about 40 cm of tubing. Was just wondering what these are for?

They use that syringe to inject gas into the tree to make it flow more. What it can end up doing is it dries up the tree and it can end up dead. Edited July 23, 2016 by fezzy

[Mosha]

That's why I asked how old the trees were. I've heard of it being done in trees approaching the end of it's life.

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[Dakling]

In my area there is someone buying immature rubber trees for 1 baht/kg. Not sure what they are using the wood for as it would be too small for anything other than burning or making charcoal, I figure.

My wife tells me lots of local farmers are throwing in the towel cutting down their 1-5 year old trees and using the money to switch to tapioca. I hope this starts to become a national trend. Gotta think though that the poor buggers likely bought those trees at 30 baht each (or more) and will barely get that 30 baht back at 1 baht/kg.

[thaiguzzi]

Sold cup at auction yesterday, 25.50 baht per kg. Considering the recent and ongoing weather, not a bad fortnight's output.

[Hunter s somtam]

Hi all 

haven't been on for a while but thought I would just say that where I am ,Isaan ,it's been so dry last season that at least half of the big trees around here have died.

i lost a few ,maybe 30 or so myself,bewteen 6and 4 year olds.

just road my bike through to the village and many have cut there trees down,weird to ride through the light now.also across the road from us they have cut down all there trees.

So all this just gets me thinking when the price does hopefully return,there will be a lot less trees ,and less product means higher prices,lets hope.

i gotta hang in there ,I haven't even tapped a tree yet.

good luck to all .

[thaiguzzi]

Sold cup at auction yesterday, 25.71 baht per kg.

[Hunter s somtam]

These looked dead ,but now with all the rain they are growing out down low like this ,what do u think ,keep em ?,chop the top off? Cut em down altogether?

will add some more shots of across the road ,they have cut all there's down,and they looked like the ones in my shots a few years back.

[Hunter s somtam]

[thoongfoned]

1 hour ago, Hunter s somtam said:

These looked dead ,but now with all the rain they are growing out down low like this ,what do u think ,keep em ?,chop the top off? Cut em down altogether?

will add some more shots of across the road ,they have cut all there's down,and they looked like the ones in my shots a few years back.

fire damage.... had a large fire rip through 20 plus rai awhile ago. most of the trees ending up looking like ones in your photo. inside they will be dry as a bone - hence not produce rubber. cut one in half and see what it looks like.... family cut them down and used for fire wood. this land is now planted with sugar cane.

[Hunter s somtam]

Yer I cut one in half and it had a bit of juice in there still ,but the top was bone dry ,so I have just chopped em all at ground level and using the now sunny area to grow fruit trees etc.

i also lost a few last year to a sugar cane fire on the fence line ,they sure don't like fire any where near them.

cheers.

[thaiguzzi]

Difficult to actually kill a rubber tree outright, but yeah, they don't look too good. No canopy, no output...

[Mosha]

Hard to get online with the phone, so not posting often Surprisingly to me, wife is still tapping. It's not easy land, and she's no spring chicken. She's not fast, but the ones she taps is all profit. She's actually having fun.

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[Mosha]

Well 2 or 3 days in BKK. Nightmare drive up Hwy 4 19 hours each way, bloody roadworks.

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[thaiguzzi]

Sold cup at auction yesterday, 24.80 baht per kg.

[Dakling]

Was out to check on our farm the other day and saw someone cutting down about 5 rai of rubber trees and loading the trunks on trucks. These trees appeared to be about 5 years old. It was the end of the day and while there was another 5 rai on the plot, my guess is they are getting done too. Lots of people in our area with immature trees of dubious quality or on land of dubious suitability for rubber trees are talking about cutting them down. They all figure there is better money in Tapioca or other cash crops. It might sound crazy but you can make the same or more money/rai on tapioca with less work, no hassle of hiring tappers and money now instead of waiting for the trees to mature. Unless prices come up I can't see anyone with old trees replanting them as they come out of production. Maybe there is hope that prices will recover to a more reasonable level but it may be years away. I think anyone getting into rubber now for anything other than a hobby should seriously rethink their plans.

 

Local buyers in our area seem to take the piss too, offering under 20 baht/kg for cup rubber. I am not producing yet as our trees are only 5.5 years old but from what I have seen  mature trees in our area only produce about 1kg/month so if our 2x13 rai plots of rubber with approx 1,000 trees each produce 1,000 kg each per month that is only about 20,000 kg/ year. At 20 baht/kg (what the local buyers are offering) that is 400,000 baht but 1/2 of that goes to staff and fertilizer so I would really be looking at 200,000 baht/year  in my pocket. Looking at our tapioca we can net more than 15k baht/rai/year so instead of 200,000 net from 26 rai it would be 390,000 baht net/year.

 

It might be possible to do more than a kg/month/tree but it will likely be much less than that for the first few years of production. If you look at our likely first 10 years of rubber ownership you are looking at only 3 producing years of likely low returns as the trees would still be small so maybe me make 500k baht in our first 10 years but then it probably cost us about that much to care for the trees during that time so basically we are at break even after 10 years disregarding land value.  If you did tapioca for those 10 years you would be looking at a net return of just under 400k/year baht over those same 10 years for a total of just under 4 million baht.

 

Even when you double the price of rubber up to approx. 40 baht/kg the economics of rubber vs other cash crops remain dubious. Rubber producers also have to consider that over the long time horizon of this crop that labour costs will likely rise throughout the country we may end up in a scenario where land owners end up with less than 50% of the return from their farms.

 

If I was to start over again I never would have gone into rubber but at the time it seemed like a good idea, hindsight is 20/20 after all. In fact if my trees were only 2 or 3 years old I would likely be chopping them down. If I am honest with myself it might be better to even chop my 5 year old trees down too but I am too emotionally invested in them to do it.

 

Sorry for the long post, hope I didn't bore you all too much. If any of the more experienced farmers have any corrections to offer to my figures I would be glad to see them. I still have little confidence on the 1/kg/month number until we actually get a few years of production under our belt.

Edited September 8, 2016 by Dakling
typos, lotsa typos....

[thoongfoned]

51 minutes ago, Dakling said:

Was out to check on our farm the other day and saw someone cutting down about 5 rai of rubber trees and loading the trunks on trucks. These trees appeared to be about 5 years old. It was the end of the day and while there was another 5 rai on the plot, my guess is they are getting done too. Lots of people in our area with immature trees of dubious quality or on land of dubious suitability for rubber trees are talking about cutting them down. They all figure there is better money in Tapioca or other cash crops. It might sound crazy but you can make the same or more money/rai on tapioca with less work, no hassle of hiring tappers and money now instead of waiting for the trees to mature. Unless prices come up I can't see anyone with old trees replanting them as they come out of production. Maybe there is hope that prices will recover to a more reasonable level but it may be years away. I think anyone getting into rubber now for anything other than a hobby should seriously rethink their plans.

 

Local buyers in our area seem to take the piss too, offering under 20 baht/kg for cup rubber. I am not producing yet as our trees are only 5.5 years old but from what I have seen  mature trees in our area only produce about 1kg/month so if our 2x13 rai plots of rubber with approx 1,000 trees each produce 1,000 kg each per month that is only about 20,000 kg/ year. At 20 baht/kg (what the local buyers are offering) that is 400,000 baht but 1/2 of that goes to staff and fertilizer so I would really be looking at 200,000 baht/year  in my pocket. Looking at our tapioca we can net more than 15k baht/rai/year so instead of 200,000 net from 26 rai it would be 390,000 baht net/year.

 

It might be possible to do more than a kg/month/tree but it will likely be much less than that for the first few years of production. If you look at our likely first 10 years of rubber ownership you are looking at only 3 producing years of likely low returns as the trees would still be small so maybe me make 500k baht in our first 10 years but then it probably cost us about that much to care for the trees during that time so basically we are at break even after 10 years disregarding land value.  If you did tapioca for those 10 years you would be looking at a net return of just under 400k/year baht over those same 10 years for a total of just under 4 million baht.

 

Even when you double the price of rubber up to approx. 40 baht/kg the economics of rubber vs other cash crops remain dubious. Rubber producers also have to consider that over the long time horizon of this crop that labour costs will likely rise throughout the country we may end up in a scenario where land owners end up with less than 50% of the return from their farms.

 

If I was to start over again I never would have gone into rubber but at the time it seemed like a good idea, hindsight is 20/20 after all. In fact if my trees were only 2 or 3 years old I would likely be chopping them down. If I am honest with myself it might be better to even chop my 5 year old trees down too but I am too emotionally invested in them to do it.

 

Sorry for the long post, hope I didn't bore you all too much. If any of the more experienced farmers have any corrections to offer to my figures I would be glad to see them. I still have little confidence on the 1/kg/month number until we actually get a few years of production under our belt.

we have 10 rai of trees left that only get tapped between october and january. ok trees that in the first few years produced a little over 1kg a month each - these tree have not been looked after properly for many years - ie very little shop bought vits and very little weeding. from year 5 onwards - sort of lost interest in them. this year we are letting the tappers keep "all" the money from the trees, if they can be bothered to tap them that is.....   this is also going to be the case for some year 5 sugar cane we have planted, that looks better then most crops around us...

up were we are udon thani, most trees about us only get tapped in the time frame mentioned above.  it is hard work to get people to work all the time, say a five day week, 48 weeks of the year ect.....  even on other projects that pay ok.  labor is the issue for most.

having seen what i have seen 200,000 baht in your pocket clear per year from 2000 tree what be very good, say at 10 year old and onwards. very good. have played at doing other crops also and it is the same as mentioned already. labor.

if "we" were to see 5,000 baht pure profit in our pocket per rai year in year out i would consider us to be doing very well, very well if we were farming crops in issan area.