COST MANAGEMENT AND SUSTAINABLE PROFIT PLANNING IN THAI SPECIALTY COFFEE ENTERPRISES
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This study investigates the production cost structures and profit-planning strategies of smallholder specialty coffee farmers in Mae on District, Chiang Mai, Thailand, to enhance enterprise sustainability. Employing a mixed methods approach, primary data were collected through quantitative cost analyses and qualitative semi-structured interviews with 30 farmers engaged in premium Arabica cultivation.
The empirical findings reveal that the average production cost of specialty-grade fresh coffee cherries is 78 THB per kilogram, with variable expenses such as organic fertilizers and harvesting labor accounting for much of the cost. By implementing an estimated cost accounting system alongside a strategic markup pricing model, farmers can achieve an optimal 35 percent net profit margin at an average market price of 120 THB per kilogram. Scenario simulations further demonstrate the financial viability of maintaining target profit margins at 25, 50, and 75 percent. Ultimately, integrating these financial management tools with Thailand’s BCG economy framework and Sufficiency Economy Philosophy establishes robust development guidelines. This alignment fosters long-term resilience within the specialty coffee value chain.
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