Can you explain to me how rubber tree farming works

[theguyfromanotherforum]

My gf family has what I think is a lot of mature trees. I don't know how much and she never wants to talk about it

Anyway, I asked her recently how is her family doing with the prices being so low. She says bad, but people are still working on it.

So, help me understand this. If the cost of producing 1kg is 60baht, but they are only selling it for 34 baht (what I understand is today's price) then why would be anyone doing farming at a loss? I just don't understand.

[Orac]

Guess it would depend on how much of the cost is incurred before it is tapped/sold - mature trees do not grow overnight.

[theguyfromanotherforum]

I see

[CLW]

Maybe have a look at the Rubber tree thread at the pinned topics in this section

[impulse]

http://www.indexmundi.com/commodities/?commodity=rubber&months=300

[Blocker]

Here is some interesting information for you

http://lmgtfy.com/?q=how+does+rubber+tree+farming+work

[recycler]

If the trees and the land are already there a decision to go on another year is not based on "total cost" but on "opportunity cost" so if you still make more by tapping the trees in stead of not tapping them you should keep going.

Another issue would be to cut the trees, sell the wood and replant with other crop or even sell the land and go in to other business.

[JimMagee]

If the cost is 60 baht per kilo, they are doing something very wrong. The initial investment is the largest, the biggest maintenance cost is the regular fertilizing. Even when the rubber price is low, they are making money. The difference is the pay back on the initial investment takes longer. Many farmers didn't pay anything for their land, since frequently, it is inherited, so their initial investment is low - just the price of excavation and trees. The seven years of growing the farm before you can start recouping the investment is very tiring. After seven years, you want to get something from your efforts. Some money is better than zero money. On a year by year basis, if you don't include the initial investment, they are making money since the cost of fertilizing is relatively low.

Edited January 15, 2016 by JimMagee

[Nomyai]

Synopsis. Plant trees, they mature, and you wonder why you lost so much money................lol. Seriosly leave rubber trees to the multi national conglomerates.

[maoro2013]

If it costs them 60 baht a kilo to produce then they are doing something wrong. it could be the are including a cost for depreciation of the plantation but I doubt that this would be the case. I farm rubber and still make money, ignoring the capital cost of course.

[williet98248]

If the cost is 60 baht per kilo, they are doing something very wrong. The initial investment is the largest, the biggest maintenance cost is the regular fertilizing. Even when the rubber price is low, they are making money. The difference is the pay back on the initial investment takes longer. Many farmers didn't pay anything for their land, since frequently, it is inherited, so their initial investment is low - just the price of excavation and trees. The seven years of growing the farm before you can start recouping the investment is very tiring. After seven years, you want to get something from your efforts. Some money is better than zero money. On a year by year basis, if you don't include the initial investment, they are making money since the cost of fertilizing is relatively low.

No money in rubber. No money in rice. The wife trashed all her rubber trees; refuses to grow rice. Rubber is a dying or dead crop. Rice uses too much water in a drought period that may last for several more years. Wife planted asparagus, sugar cane and corn for cash crops and vegetable garden for personal use. Eventually start a hydroponic vegetable farm for market and restaurant. Want to be a poor farmer? On the government dole? Insist on growing rubber and rice. Because "We have always grown rubber and rice!"

[sanukjim]

In Thailand as in many places all over the world the governments subsidize many of the farmers products because the world market price is much lower then then the local price on their product.The problem with this is that as the need (Or Greed) of a government increases it can no longer keep this practice and the farmers now can not sell their product and make a fair living.In most countries governments may find a way to work this out with a bit of foresight.and some governments care only for their existence and ignore the farmers as they know they can.Look around you at how things are run here.About the actual farming,Look it up on Google.

[djayz]

I'm no expert on this topic, but the wife has 16 rai of rubber trees. 60 Baht per kg to harvest the rubber strikes me as being very high.

[bigguy]

1st. thing, if the GF doesn't or won't discuss the family business you got a problem. And if she is just tapping the trees for what is called, "cup rubber" and its costing 60 baht a kilo she is leading you down the garden path, and she is not selling cup rubber for 34 baht....

We have 34 rai in mature 9yr old trees, we hire 4 people to tap our trees and we split the sell money 45/55, currently as of selling last week the buyer was paying 15.5 baht per kilo. The 34 baht is for folks that process there rubber into sheets.

As others have said the only expense we have is fertilizer and the occasional cost for petrol and oil for the weed whackers used around the trees.

[The Beguiled]

My reply relates to Ball Rubber which is a step before Sheet Rubber as the ops is questing.

I have relatives in the North East of Thailand and they are rubber farmers.

The current price for Ball rubber (latex of the tree in ball configuration) not sheet rubber is 12-13 baht per kilo and the cost to

1) Fertilise;

2) Hardening chemicals;

3) Diesel to transport the ball rubber, to and from the farm, weed between trees, etc

Costs 22-24 baht per kilo.

So why are they still tapping rubber?

Because there is little else for them apart from the once a year rice crop in a poor soil area in a area that is also affected by drought.

Negative cash flow is better than no cash flow.

People need some baht to buy food to eat.

The above also answers another question as to why many Isan people leave their children with relatives and travel to Bangkok or even overseas to work so they can send money back to their parents to help feed them and try to make the parents more comfortable.

Here i am not saying that all Isan people do it to help their families.

Contrary to many replies, many farmers were encouraged by previous governments to grow rubber in the new province of Bueng Kan and now with the world oil price very low, natural rubber follows suit in price and is low also as synthetic rubber competes with natural rubber by price.

Trusting this assists you in understanding why

[csabo]

I say stick it out. I can see the condom market continuing to thrust upward.

[theguyfromanotherforum]

I am using 60 baht as I read on the news here that this is the average. I have no clue how much their cost is.

[Transporter]

Rubber is the same as all other farming. There is no money in it for the farmer. There is a little money in it for the buyer. A bit more for the exporter and loads for the processor. Both governments take their cut for doing nothing. Happy days for all apart from the person taking all the risks and doing all the hard work. Good luck with it but dont say I didnt warn you.

[Tom Cahill]

The price has gone down massively in a very short time. It's many multiples lower, so when you consider this used to be a good earner, you'd be reluctant to stop doing it. I'm convinced that this is all due to a manipulation of the market to bring the price down, and is linked to other issues in both Thailand and the surrounding countries.

I think the smart people keep their trees if they can afford to.

Also, you've got to ask what the cost of putting something else there is and how much it will make.

Another consideration is the conditions to grow other things. Rubber seems to grow in most places here, whereas other crops won't, or, you need to spend a lot of money on expensive pumps and irrigation---dorian for instance.

Rubber is a competitor with petrochemical equivelants. Oil is the most manipulated market on Earth and the biggest, so you have to see that rubber, with it's position as a competitor is also linked to this.

If I had a rubber plantation, I would not cut it down. I'd leave it, even if it just meant not harvesting as it will more than likely go up at some stage and the drop in price is definitely not linked to non-artificial factors, so presumably it will go back to where it was; or, higher, as with the mass clearance exercise, there will be less of it.ng it

I've been working with the rubber chopping a few times, and I know you don't get much for the wood and it's a lot of work clearing it all away.

[SouthernMan3]

If the cost is 60 baht per kilo, they are doing something very wrong. The initial investment is the largest, the biggest maintenance cost is the regular fertilizing. Even when the rubber price is low, they are making money. The difference is the pay back on the initial investment takes longer. Many farmers didn't pay anything for their land, since frequently, it is inherited, so their initial investment is low - just the price of excavation and trees. The seven years of growing the farm before you can start recouping the investment is very tiring. After seven years, you want to get something from your efforts. Some money is better than zero money. On a year by year basis, if you don't include the initial investment, they are making money since the cost of fertilizing is relatively low.

Well put.

Hit the nail right on the head !

Luckily I have many farms.

I am sad for some of my neighbors who only have 10-15 rai.

Even cutting it themselves they are having BIG troubles paying their bills.

Many have children and we all know how expensive children are.

Then there are those with house and/or car payments.

Sure it was their choice to get into these mortgages but who doesn't want a better life.

Most took out these loans when rubber was already low (Ex: 60bt./K.).

Sure do miss the old times of K.A. when prices were over 100........

[Mr Money Bags]

Government to buy rubber from growers at 45 baht/kg

http://www.thaivisa.com/forum/topic/886704-thai-govt-to-buy-rubber-from-growers-at-45-bahtkg/?utm_source=newsletter-20160115-0704&utm_medium=email&utm_campaign=news

SHEET rubber, that is.

Consider the price for other forms......

You're Welcome!!

[Nomyai]

If the cost is 60 baht per kilo, they are doing something very wrong. The initial investment is the largest, the biggest maintenance cost is the regular fertilizing. Even when the rubber price is low, they are making money. The difference is the pay back on the initial investment takes longer. Many farmers didn't pay anything for their land, since frequently, it is inherited, so their initial investment is low - just the price of excavation and trees. The seven years of growing the farm before you can start recouping the investment is very tiring. After seven years, you want to get something from your efforts. Some money is better than zero money. On a year by year basis, if you don't include the initial investment, they are making money since the cost of fertilizing is relatively low.

No money in rubber. No money in rice. The wife trashed all her rubber trees; refuses to grow rice. Rubber is a dying or dead crop. Rice uses too much water in a drought period that may last for several more years. Wife planted asparagus, sugar cane and corn for cash crops and vegetable garden for personal use. Eventually start a hydroponic vegetable farm for market and restaurant. Want to be a poor farmer? On the government dole? Insist on growing rubber and rice. Because "We have always grown rubber and rice!"

Key to making money. Dont do what your indebted neighbors are doing.

Dont ask a fat farang how to lose weight......khao jai mai?

[shirtless]

The end result is that you go broke