Digital Template Helps Logging Companies Develop A Business Plan (by Chris Lindgren)

UVM Extension Forest Business has added a new tool to the digital resources available to forest products businesses. Small Business Planning for Loggers was produced by Steve Bick and Chris Lindgren with support from Vermont’s Working Lands Enterprise Initiative.

Forest Business has been supporting digital tools and skill development in our work for five years now. Whether it’s bringing bookkeeping to the computer or online, using video conferencing for meetings, developing digitally based tools, or collaboration in cloud-based applications, acceptance of digital tools is increasingly becoming the norm with the business owners who engage in our program.

This morning as I was working on this blog I read a press release about a new report on digital skills development in rural America—Unlocking the Digital Potential of Rural America. Commissioned by Amazon and researched by the US Chamber of Commerce the report concludes that the adoption of new digital skills and technology in rural America will lead to significant economic gains.

“Increased adoption of online tools and digital services for businesses across rural America could create more than 360,000 jobs in the next three years.”

“Increased adoption could grow annual revenues of rural small businesses by more than 21% over the next three years – the equivalent of $84.5 billion per year.”

“Online tools and technology have the highest potential impact on rural small businesses with annual revenue under $100,000.”

I completely agree.  This is a huge opportunity for Vermont. Vermont’s small businesses have much to gain by developing digital know-how and adopting digital tools. Forest Business will continue to support development of digital skills and tools for Vermont’s forest economy. Stay up to date on Forest Business programs here.

Do you have thoughts on digital skills education? Please take a moment to fill out our educational resource assessment survey. Thank you.

2019 Maple Production, Markets and Programs

It’s “all systems go” across the US maple regions in February. Producers have begun to tap trees and troubleshoot tubing systems. With only a few rumors of early sap collection in January most Vermont producers have begun or are about to begin setting taps for the 2019 crop. Drop line and spout sanitation practices paired with high vacuum tubing systems enable longer tap hole longevity to catch early runs and maintain production later in the season. UVM Proctor Maple Research Center leads the nation in maple production research and Vermont producer yields continue to lead the nation (see USDA NASS reports on the Extension Maple Pages).

The UVM Extension Maple Program, Addison County Maple Sugarmakers and the statewide VMSMA organized three maple conferences in January. Workshop topics included production, forest health, and food safety. Attendees and presenters put a large emphasis on market conditions. Industry leaders felt the expansion of maple taps continues but it has slowed in the past two years. Representatives from Quebec indicated that roughly 60% of the recent FPAQ 5 Million tap expansion allowance is currently hitting markets. The remaining taps are still being set up over the next few years. The general outlook is that US bulk maple syrup prices will hover near $2.00-$2.10 plus premiums for 2019. No one was willing to predict prices would increase but there was general agreement that nothing significant has prompted the price to drop below $2.00 per pound. Local maple marketers shared insights that wholesale and retail competition has grown dramatically in the northeast. Many marketers are setting their sights on consumers outside the northern maple belt region. Maple businesses are also working to differentiate themselves with unique products, packaging and branding to maintain sales. Large packers reminded attendees that Canadian syrup imports remain competitive due to the current US-Canadian currency exchange rates. Meanwhile, pure maple syrup is well positioned for consumer demand for natural sweeteners in the United States.

A new Maple Cheerios hit stores recently!!!

Three new projects began this fall in Vermont to support maple syrup production and marketing through 2021. National USDA Acer Access and Development Projects.

Farm, Forest and Maple Business Clinics

UVM Extension Business Specialists Mark Cannella, Tony Kitsos, Chris Lindgren and Betsy Miller are available to work one-on-one with farm, forest and maple businesses on their finances. Reserve a 1½ hour appointment to prepare documents that will help manage the business. Use the time to develop a balance sheet, update financial statements, review a business plan, consider changes to the business and more. Bring your financial statements, recent records and questions!

➥ 1½ hour, private meetings
➥ Nearly 100 appointments available from February – April 2019
➥ Held at UVM Extension Offices in 10 locations
➥ only $25.00
Online Registration Here!

Business Clinics Information Sheet

Free Lunch, A Punch in the Face, and Continual Improvement

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“In preparing for battle I have always found that plans are useless, but planning is indispensable.” Dwight D. Eisenhower

“Everybody has a plan until they get punched in the mouth.” Mike Tyson

I’m not sure if Tyson and Eisenhower are saying the same thing, but they are saying similar things; plans are important, but they go awry.  This insight applies to logging businesses particularly. Logging is not boxing or battle, but logging is a risk heavy business significantly influenced by external factors. Improvisation is an essential skill and planning helps you succeed in the heat of the moment.

There is a workshop next week offering  free lunch, industry discussion, business skills and technical knowledge to logging businesses. No disrespect to Tyson, but I have found in my work that not everybody has a plan. This workshop is a great place to get one started and to learn how to adjust when you feel the knuckles on your jaw. Offered by University of Vermont Extension, Forest Business, the class is worth 5.5 CFE (Consulting Forester Education) credits and 8 LEAP (Logger Education to Advance Professionalism) credits. This is a great opportunity for professional development. This class will help loggers and foresters understand the shifting economic landscape and stay current on the regulatory and policy front. It is a time to network with peers in the forest products sector and to pick the brains of industry leaders and educators. It is also time to learn business management and finance skills to help your company identify what’s important and where to focus effort.

While preparing for the workshops I have been reading Continuous Improvement in Logging, (CIL) by Steve Bick and Jeff Benjamin. An adept application of Theory of Constraints (TOC) to logging, CIL distills the ideas of CI (Continuous Improvement) providing examples of the productivity of logging operations. With detailed information on productivity and a thorough discussion of common bottlenecks for timber harvesting systems, the book dispenses management wisdom along with rigorous focus on identification of bottlenecks in logging operations. CIL introduces readers to The Goal, a business novel worth a read. The goal is defined as, “making money now and in the future.” This goal focuses all productive effort. Steve will be speaking at the workshop bringing productivity enhancing tools and techniques to those in attendance. These tools will help you continually improve your game, preparing you to avoid the knuckles and spend more time “making money that sticks.”

Punches and lunches lead to continual improvement!

Tell a logger or forester you know to join us or contact cplindgr@uvm.edu for more information.

2018 Business Skills Workshops for Logging Professionals—November 7th and 8th

UVM Extension will offer this free workshop for logging companies on November 7th (Rutland, VT) and November 8th (Hardwick,VT). Presentations will cover a range of topics from industry updates to marketing strategies and include new presentations not included in past years. Presenters include: Sam Lincoln (VT Dept of Forests, Parks & Recreation), Paul Frederick (VT Dept of Forests, Parks & Recreation), Chris Lindgren (UVM Extension), Christine McGowan (VT Sustainable Jobs Fund) and Steve Bick (Northeast Forests, LLC). Learn more about the program and how to register!

Vermont Maple “In the Middle”

Credit: Mark Isselhardt

As global maple syrup production increases the markets, communities, and business owners are facing changes. Vermont has a long cultural heritage of syrup production ranging from subsistence production to commercial activity for over 100 years. 2018 is no different… for every new maple enterprise setting up to tap 50,000 trees we are likely to have 10+ new hobby producers making their own syrup and selling the excess directly in their neighborhood.

Research on farm economics has demonstrated how farms can often get caught in the middle of the push and pull of dynamic business environments and consumer preferences. The 2008 text Food and the Mid-Level Farm (Lyson, Stevenson, Welsh) explains the dilemma that faces “agriculture in the middle.” The super-small farm can often maintain a specialty niche that serves local or direct clientele. It’s common that these farms might be part-time or lifestyle farms. They may be profitable but it may not matter. The largest scale farms  are  producing goods at low costs and high volumes and they are  serving broader markets that value uniform product, lower price points, and require sophisticated supply chain logistics. What’s left is the farm “in the middle”. These farms are full time jobs for their owner -operators that need to earn a livelihood from risky business activity. They are too big to be accepted in niche markets and too small to compete with the big players.

The recent maple price downturn has begun to reveal where the “middle maple producer” may be. Four years of maple finance benchmark analysis has shown how a reasonable owner livelihood can disappear as the business environment shifts. A small sample of 7,500-15,000 tap maple producers in VT has demonstrated the looming risk for a formerly viable owner-operated bulk syrup enterprise that can’t break even if market prices stay below $2.10 per pound. These businesses can be a too big to pivot into niche direct marketing and too small to compete in the larger wholesale markets. We don’t know where the sweet spot for a commercially viable “middle” operation will be but we do know not to assume it will stay in the same place forever. We also wait to see if a group of informed consumers that value the people and practices of “ag in the middle” will persist.

Business Skills for Logging Professionals: Workshops November 8th and 9th

UVM Extension will offer this free workshop for logging companies on November 8th (Chester, VT) and November 9th (Hardwick,VT). The workshop builds beyond topics covered in seminars last year. Presenters include: Sam Lincoln (VT Dept of Forests, Parks & Recreation), Paul Frederick (VT Dept of Forests, Parks & Recreation), Chris Lindgren (UVM), Christine McGowan ( VT Sustainable Jobs Fund) and Steve Bick (Northeast Forest LLC.). Topics this year include: current legislative issues, 5 smartphone apps for loggers, market/industry updates, business planning, personal finance and much more! Register Now!

 

Maple Business and Industry Update

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

vacuum-on-3-16ths

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.

 

Business Planning Wallpaper? The Business Model Canvas

The Business Model Canvas is going up on barn walls and office doors throughout CaptureVermont. UVM Extension Forest Business Educator Chris Lindgren began using this business planning tool with loggers and mill owners over the past year. This is the perfect resource for farmers and forest professionals that want a better visualization of key business areas as they work on their business strategies.

A manager can make notes on the canvas, draw arrows or use post-it sticky notes that can be reshuffled in real time as the business changes. The Business Model Canvas is a nice alternative to other business planning templates that are based on preparing a multi-page narrative document.

The Business Model Canvas and more resources can be found at Strategyzer

 

 

New Maple Benchmark Report Highlights Top Profit Strategies

UVM Extension has published the 2014 Maple Benchmark report. This report displays detailed financial measures for maple producers from 2,500 taps to over 50,000 taps. Go to our Maple Benchmark page to download reports and learn more about the program.

Analysis of the 2014 season shows that top profit producers have a variety of ways to reach financial success with a maple business. Key findings reveal:

  • Average Cost of Production for Operating Expenses average $2.09 per pound or $9.15 per tap across 18 participating businesses
  • Full Economic Cost of Production (with depreciation and a valuation of owner management) averages $3.75 per pound or $15.71 per tap.
  • Top profit producers achieved high production income in relation to their investments. This comes from a combination of high yields and/or higher-paying market prices. In many cases the top profit producers are NOT low cost producers but they are able to generate optimum income based on their expenses.

Download the 2014 Maple Benchmark for all the details.