New Vermont Maple Business Benchmark Report

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Photo Credit: Mark Isselhardt

UVM Extension has published the newest 2016 VT Maple Benchmark report. This report shows financial analysis and profitability for a group of syrup businesses that range from 2,500 to 20,000 taps. Download a copy of the 2016 report now. 

In 2016 maple market prices had dropped significantly but very high production yields for many participants resulted in stronger profitability for 2016 compared to 2015. Bulk maple producers showed a wide range of cost of production from $1.62 per pound to $2.52 per pound with an average cost of $2.00 per pound. Overall costs on a per pound basis declined in 2016 due to high production yields. Several historically high performing businesses, however, will be challenged to stay profitable as market prices drop below $2.25 per pound and/or they experience only “good-to-average” yields. This is a growing concern for maple sugar makers from 8,000-15,000 taps that rely on maple income for household income.

Many maple businesses have already or plan to diversify market channels. There is no guarantee that higher wholesale or direct market prices can compensate for the costs and time associated with serving those new customers. The reality, however, is that bulk maple businesses that drop below financial break-even levels will seek to find alternative ways to market syrup in order to stay in business. Several participating businesses in this project have demonstrated that a mixed marketing plan that includes bulk sales and some direct sales can preserve profitability and reduce the risk of uncontrollable bulk market prices.

The VT Maple Benchmark project will continue in 2018! Starting in May our business educators will begin completing 2017 financial analysis with maple sugar makers and sap only enterprises. Contact Mark Cannella for more information (Mark.Cannella@uvm.edu) . This year the project specifically needs more producers from 15,000 taps – 50,000 taps to register.

UVM Extension is also offering maple business planning assistance from May- December to Vermont sugar makers. Contact Mark  for more information on maple financial analysis and business planning assistance. Mark.Cannella@uvm.edu

 

Online Maple Sap Price Calculator

For many years maple sap and syrup producers have referenced the print version  sap buying pricing sheet that is regularly posted in industry publications like the Maple News or the annual Maple Syrup Almanac. There is now an online Sap Value Calculator developed by Cornell and Ohio State available for use. Cornell also has the Cornell Sap Buying Spreadsheet available for download (excel version) from their website.

Some sap sellers had historically used a 50% or 60% value share to price sap but those percentages are not necessarily current to all regions. Fast growing maple regions are  cited for up to  65% – 70% of final syrup market value being paid to the sap producer. The online Sap Value Calculator and the Cornell Spreadsheets offer more flexibility to target a specific crop share percentage for sap pricing.

Are you looking for more online maple business planning tools? UVM Extension has been awarded a new grant to develop online business planning tools and financial calculators  for maple producers. The project starts in June 2018. If you have ideas please contact Mark.Cannella@uvm.edu

 

 

Maple Survey: The University of Vermont Extension Seeks Input to Develop New Maple Business Programs

UVM Extension wants to develop new maple business and economic resources to assist producers and industry leaders across the United States.

Take this short 3 minute online survey to tell us what you think. We need to know what topics to work on and how to make  programs most accessible to producers.

Maple Business Resources Survey

The Maple Business Benchmark has provided detailed financial analysis to maple producers since 2013. As the industry changes there are many more economic and business management topics to focus research and educational effort towards.

What are the key issues facing the industry?

What are the major constraints that your business wants to overcome?

What are the best resources that will help you manage forward?

Maple Business Resources Survey

Maple Business and Industry Update

What do Fortune 500 investors, folklorists, family farmers and Harvard Business School all have in common?

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All these people were at winter maple conferences and investigating ways to get in on the maple industry expansion. UVM Ag Business was able to attend maple conferences in NY and VT to witness the blend of old-school sugaring and new industry innovations. Here is a quick recap.

  • Industry Overview

Representatives from Butternut Mountain Farm, Bascom Maple Farms and Leader Evaporator Co. provided data and insights on maple supply, demand and pricing in the US and overseas. Consumers are making a shift towards “healthy” sweeteners. Maple syrup is a pure product with a very short processing chain that appeals to customers seeking pure and natural products. That being said, the industry is aware they are selling sugar and they don’t want to overstate health claims to promote maple. The panel estimated that global maple sales are split like this: 25% farm gate sales , 50% mass markets wholesale and grocery and 25% to manufacturing (sugar, cream, food product flavoring). Now with bulk maple prices hovering at $2.10-$2.20 per pound (down from almost $3.00 6 years ago) they predict an increase in the manufacturing portion of demand as maple becomes a more affordable ingredient for mass produced foods.  We are seeing that, new maple products and more products with added maple for flavoring. There is tremendous product innovation at all levels, big and small: maple sap beverages, infused syrups and sports recovery products

Is there still a place for table syrup? Everyone think’s so. Even with increasing global sales they cite the room for growth in domestic consumption in the US. Canadians consume ~ 1 quart of pure maple each year while Americans only consume 4 ounces. Promotional goals will work to increase consumption for those that already love pure maple.

  • Storytelling

Michael Lange, Associate Professor at Champlain College, delivered a keynote address blending folklore, storytelling and graphic design themes for maple producing regions in Vermont and beyond. After completing hundreds of interviews with maple producers he explained that the “Vermont” maple experience is something truly unique to our state. It blends a combination of nostalgia, cuisine, hobby and commercial economic impact in our state. He continued with the practical aspects of maple marketing and explained how storytelling through product promotion and branding is perceived differently outside maple producing regions.  People in urban areas and other countries are attracted to different element of the maple story.  Take the time to know your audience and don’t assume they care about the same things we do in VT.

  • Finances and Business Management

Mary Peabody, UVM Extension, explained current direct market trends and how to target the right customer. Increased demand for ethnic foods highlight expansion of spicy flavors in USA food products, and spicy flavors are often best complimented with sweet flavors (hint….Maple).

Yankee Farm Credit discussed how sugar bush real estate is appraised.

Business investors from other industries are attending sessions as they explore investing in new maple ventures. Even academics from other business schools are taking notice of maple. All the topics are there to entice a business student: a strategic reserve and quota system, free expansion in the US, technology innovations, risk and profit potential.

Producers are watching their finances! Declining bulk markets have producers nervous about short term cash flow. Many producers continue to get organic certification and enjoy the $0.15 – $0.20 premium, it helps! Find more on maple finances at our Maple Benchmark webpage.