Investing in Timber

[planbtotrade]

David,

I never mentioned anything about "total costs to final harvest", but you took the time to post a summary of the costs in the article, I will build on the numbers in your post. Note, the article is dated 2006, so I will assume that the numbers are 2005 dollars.

The oldest trees (plantation teak) at TATF are approx 17 yrs old. So taking an average of the high and low costs from your post and subtracting the last 8 years of care and management costs works out to $7.77/tree. That is, less than $8/tree represents total cost to-date for the oldest trees at TATF.

In 2005, if you purchase teak from TATF (in volume of 500 or 1000 trees) you generally could not buy the trees for less than $30/tree (yes - I bought about this time and know the sales prices well from that time period).

Assuming that TATF is essentially cash poor and land rich today, that means that in, 2005 dollars, $22.00/tree has gone somewhere. At 3000+ tree owners, at 100 trees each this is 6.6 Million, and at 1000 trees each, this is 66 million (again, in 2005 dollars).

Where did it go? (Raleo, value added products, milling and storing worthless lumber, etc.) and Why will the future be any different from the past?

There are obviously some gaps in the data that I used, but others have posted on this board about the missing millions of dollars and they have been attacked. I wanted to show by approaching from another direction that they may not be that far off.

planb