Farm gate, wholesale, and retail prices

[Jotham79]

Everyone here has seen posts where the price at Tesco has been quoted or the price in a large local wet market. I remember years ago trying to figure the price I could sell things for depending on those numbers and I remember a lot of disappointment while learning how things really were. I think the first thing to understand is none of these prices are universal for a given product, but will vary for a number of reasons. The following is my experience and I am saying up front that depending on where your are, time of year, the scale of your operation, you will get different numbers.

Retail: This would be the price you see in the local wet markets. I would never use a large store’s price as a reference. Prices in Lotus for example are usually much higher, but under some circumstances occasionally be lower ( they have bought in bulk) than the local wet market. If you visit several wet markets (morning, evening, weekly…..) you will see a variety of prices that are usually lower than Lotus' and I would call these “retail prices” At the really small wet markets you may meet the odd vendor selling a crop directly from his or her farm, but the majority of large vendors in general have bought from a wholesaler.

Farm gate: This is the price you get when someone comes to your farm and buys your entire crop. Usually this will only happen once you are established and can provide a certain amount of volume. The advantage is the ability to dump a large quantity of a product in a short time, convenience and time saving. Also you will often know in advance what the price will be. The disadvantage in this is that usually, this is the lowest price the product is being sold for at that time. Examples are commercial broilers, hogs, fish, that are bought by CP or the likes, but sometimes to local buyers. I sell my field corn that way, but have sold Coriander, peppers, teak, garlic, sweet corn, and a couple of other crops that way. Occasionally the buyer will even do the harvesting.

Wholesale: Wow, this is the craziest and most fluid of all. Basically everyone between the farmer and the consumer is in wholesale, but there are many different possible set ups. I’ll give you a few examples:

1. A few months ago we were picking Jujubes. We had people calling and ordering 100 kg at a time and they were taking them to sell directly to people (our price 15 baht/kg). We sold directly to people ourselves (25 baht). We also sorted out a few kg nicer larger ones and retailed those for 30 baht/kg. We dropped off 100-150 kg that were in 1kg bags to a lady we know on our way home from the farm (20 baht/kg). My step-son and step daughter were taking 20-30kg each to sell to people where they work (20 baht). We sold the rest to family members in our village that work in the large wet market in Petchabun (20 baht/kg). Retail in the market was 30 baht. Occasionally my wife would stop at a small market on her way home and sell some retail. I can appreciate that there are those of you who have opinions that my prices or methods are not optimal. All I can say is that this is the way we did it and we are satisfied. IF you have first hand knowledge (you did it yourself) of a more profitable way I would be interested, but understand we have been growing and selling Jujubes for many years. And many things that seem obvious and practical don’t work out that way. If I had needed to sell my entire crop from my farm I probably would have gotten around 10 baht/kg.

Eggplant: Last rainy season a neighbor told us that he makes good money ( around 200,000 baht) on a few rai of long eggplant. I could have asked him to prove it but I am not a <deleted> (sorry, I couldn’t help that). So we did a couple of rai. At first we sold to our neighbor ( we gave him some gas money or a bottle of whiskey) who took his and ours to the truck market in Lomsak. From there they would go as far away as Khon Kean to be sold to market venders. Once we were harvesting well, we took them to Lomsak ourselves. All the while we were taking some back to sell directly or to family to sell in the market. The neighbor was very helpful about tips for planting, fertilizing, seeds, and we made good money. We didn’t make as much as he did because he hit the market earlier, had more rai, and was in when the price made its annual jump. He and his wife did all the planting, weeding, spraying, and harvesting themselves and he had several phone numbers he would call in the morning to discuss what day would be best to pick based on what was happening in the target markets. He made a lot more than he said, but maybe it was a good year. We made money and we lagged on hitting the market, knowing what and when to spray, and hiring people to plant, weed, and pick. I am sure there were farmers somewhere who were getting more or less than we did. Oh yea, he drove a very old crappy looking truck and so do we when we go to the farm.

There is actually a lot more to learn, but things vary so much between areas and within areas it is hard to pin things down.You really have to get out there and get your own experience.

[IsaanAussie]

Great post, sums up what happens near us as well. How did the pineapples go? (Sorry, I couldn't help myself...LOL)

[pigeonjake]

what pineapples,,??

have i missed something,,,,,

its the same with the pig job,,,

we make money for the simple reason that we get our piglets cheap,

saying that we went and got 40 last monday and the lady said gone up,,, they were 1000bht each,, first time in over 2 years they have gone up,,

but it took me some time to get my contacts, noy only for buying our piglets in, but also for selling them at 100kg, the last thing you want is to be stuck with 40 100kilo pigs,,lol

it all takes time, i fell lucky, we befriended a lady whos husband had left her, she is still a friend to this day and now she works for the government, lung her name as helped us no end,,

she put us onto our vet,

introduced us to our pig lady,

its all about contacts,,

jake

[RedBullHorn]

Hmm...So quiet suddenly...

[Dancealot]

Thanks, Jotham, for explaing how things really work at the farms.

[Dancealot]

Hmm...So quiet suddenly...

[somo]

Sure on a small scale but try selling 50 tons of ripening pineapple in a hurry.

You gotta have a large company buying and they will screw you on the price.

[RedBullHorn]

You shouldn't have that kind of a contradicting pessimistic thoughts.

There is an established system we call it - queue. Seasoned farmers/investors know and are inform by wholesalers when to line up our produce/product accordingly. From experience we learn and got to know how the trade system works.

Edited May 7, 2014 by RedBullHorn

[RedBullHorn]

Harvest quantity are usually agreed upon and sometime documentary binded on phases and time period if it is on large scale base on tonnage...and are honored upon especially with reputable company/ conglomerate.

Edited May 7, 2014 by RedBullHorn

[Jotham79]

Sure on a small scale but try selling 50 tons of ripening pineapple in a hurry.

You gotta have a large company buying and they will screw you on the price.

What does 50 ton of pineapple have to do with my post. If you got 50 tons of anything you will have it pre sold and at a low farm gate price. My examples are not for the large corporate operations, but for the small country farmer. The most jujube I sold in one day (we picked every 2-3 days) was about 500 kg total of 2 different varieties. It was probably about the same for the eggplant and we probably picked every 3 days on average. My post was just to let people know there are a lot of different prices and selling options and they are all different depending on product, location, time of year, and a dozen other factors.

[ozzydom]

There are always more than one way to skin a cat,

For instance RBH does intensive fish farming,growing high numbers of fish to market size in the shortest possible time by using high quality food and good technique.That way he gets multiple crops per annum.

We go the other way and grow one annual crop of fish to market size feeding only supplemental feeds.and maximise our profits with direct public sales.

BUT... If we chose to we could grow two crops per annum ,selling to the wholesale market at a much lower unit price ,unit costs being higher because of feeding higher quality feed {and more of it} but income averages about the same IE.method 1=20,000kg @direct sales margin versus 40,000 kg @wholesale price .

The annual bottom line comes out roughly the same.

The main difference in the alternate methods is that intensive growing requires far more work and care in maintaining water quality.

And for the naysayers,as RBH says,it is possible to nett 1mill baht from 5 rai.

[pigeonjake]

ozzy,,

its the same with most farming, as you know,

we feed top quality feed to our pigs, ready for market in 4 to 4.5 months old,

now take the thai farmer with a couple in the back yard,(oigs that is) he feeds ram at 6 to 7 bht kilo, but it takes him 9 to 10 months to get to market,

we feed top quality and it works out say at 14bht kilo, not a lot of difference there,, as it only takes us 4 to 4.5 moths to mkt,

but if you do the maths it not to far of the same, give or take a bht,,lol

jake

[loong]

ozzy,,

its the same with most farming, as you know,

we feed top quality feed to our pigs, ready for market in 4 to 4.5 months old,

now take the thai farmer with a couple in the back yard,(oigs that is) he feeds ram at 6 to 7 bht kilo, but it takes him 9 to 10 months to get to market,

we feed top quality and it works out say at 14bht kilo, not a lot of difference there,, as it only takes us 4 to 4.5 moths to mkt,

but if you do the maths it not to far of the same, give or take a bht,,lol

jake

"he feeds ram at 6 to 7 bht kilo,"

Where can you get male goats for that price??

Sorry, I know that you mean rice bran, but maybe not everyone who reads this will know.

Edited May 8, 2014 by loong

[pigeonjake]

ok,,lol

its the second sciming of the rice at milling,

its good stuff when fresh, i think about 14% protine but after a couple of days that drops big time,,

jake

[RedBullHorn]

As for my Clarias, i need to fulfill my quota, or i will lose out on my spot/queue. There is a window period like in the piggery industry to get the good price according to seasonal supply and demand. To ride with the tides...

It is not just wholesale prices I'm taking about here in regards to my trade and it is the same with some other produce/product... but I also need to emphasize on target market.

In Clarias catfish farming, obtaining the right sizes per kilogram is crucial...and it must be decided on the ability of my wholesalers to accept them base on the sizes they are comfortable with. They too understand the importance of the phrase "Pond owners can survive, we wholesalers can survive". Market cater to different sizes. For example, Mae Hong Son consumers like their Pla Duk in sizes Jumbo/2/3 fishes per kilo. Amphur Theong and Muang Chiang Rai like theirs in sizes 4/5/6 fishes per kilo, tambon Ban Mai like theirs 2/3/4 fishes per kilo and Amphur Mae Sai accept theirs in sizes 3/4/5/6 fishes per kilo. So i need to cater to them all from Jumbo/2/3/4/5/6 fishes per kilo. I get my sales base on my yield and they get their sizes to sell to their retailers.

It is more hectic in Pla Duk farming i must admit because i need to pay attention to the supply and demand of different seasons, I will farm max output on the 1st season, 80% of my total output or divide into batches for the raining season so that i don't get struck in the queue and then max out again on the cold season.

Hectic in another form too because i need to constantly make sure i will get my supply of fingerlings before they ran out due to over demand for my favourable sizes of 3''-4'' fingerlings. Even though i lock my quantity and paid a deposit in advance, sometimes i would get only 90% of my order.

Edited May 8, 2014 by RedBullHorn