The age-old question for a farm financial adviser has been “Is the money moving from the business across the kitchen table into the owner’s pockets or is the money moving from the owner’s pocket across the table, out the door-yard and into the business?” There is no question that investment capital is needed for people starting or expanding a modern maple enterprise. UVM Extension has published nine start-up investment profiles to demonstrate the estimated investment required for enterprises at different scales.
Go to the Maple Business Resource Library at www.maplemanager.org to find the investment profile that will help with your planned start-up or expansion.
The research finds that smaller start-ups might require $50-$60 per tap for the production investment plus an additional $25-$45 per tap for land purchases when the appraisal is $1,500-$2,500 per acre. Larger enterprises from 10,000-20,000 taps could require a slightly lower investment of $40-$50 per tap in production systems plus that same additional $25-$45 per tap if a property purchase is part of the plan.
International Maple Syrup Institute Explores U.S. Promotion Programs This week the International Maple Syrup Institute Board of Directors will gather for their annual meeting to discuss a number of key issues facing the maple industry. One topic on the agenda will be the progress being made to explore different promotional program options for the United States. As the maple industry grows the IMSI seeks to understand different ways maple producers can work together to expand the market for maple syrup. The research committee plans to produce a series of articles later this year to share how different U.S. specialty crop groups have developed unified promotional programs and the different mechanisms that have been used to organize these initiatives.
New Northeast Maple Benchmark Report UVM Extension has published the newest report that documents ongoing financial research with maple businesses. The 2020 NE Maple Benchmark is available at www.maplemanager.org on the Maple Business Resource Library page. A deeper look at the results is coming in the July newsletter.
Sign up for program updates when you visit www.maplemanager.org and you will receive the monthly newsletter on maple business development, markets and economics.
Maple sap harvesting has been underway in many US regions. Now well into March, the season is in full swing.
If you are in the business of selling sap or thinking about starting to, UVM Extension has business resources available to help. For example, you can use our Sap Pricing Calculator to determine the price per gallon paid to the seller or determine Profit and Loss from Sap Hauling
The Economic Advantage of Sap-Only Specializing in sap production and selling sap in a business-to-business transaction offers many advantages. Sap sellers are able to reduce their capital investments and focus specifically on sap production activity. Recent research shows that sap-only enterprises may require just 50% of the capital investment compared to a similar sized sap-to-syrup processing business. A typical 5,000 tap enterprise on previously owned property is estimated to require $100k-$120k in sap collection investments. For the same enterprise to invest in syrup processing capacity at least another $110k in capital start-up is expected. Sap sellers can focus their labor and attention to high yielding sap harvest systems without spreading skills and attention into the business of syrup processing, grading, packaging and sales.
Syrup processors see a significant advantage from sap purchasing as well. The investment in a sugar house and the processing equipment is significant. Many syrup processors are seeing the benefits of sizing their facility in order to purchase-in additional sap and increase their equipment usage to enhance profitability. These relationships also enable successful maple brands to supply more customers and focus on the market development logistics to expand maple demand.
University of Vermont maple specialists will host a series of online webinars focused on business decision making and forestry practices. Learn about the best practices to integrate business management and sugarbush management for a thriving maple enterprise that targets profits and forest health.
Session information and registration is now available for sessions on August 5th, August 19th, September 2nd and September 16th. Watch our website for an updated schedule advertising webinar topics for October- December. Register now on the Upcoming Events page at www.maplemanager.org or download the program schedule here: UVM Maple Webinar Schedule
Topics will include: sugarbush leases, rental rates, business planning, tapping practices to optimize yield, tapping red maples, business entity set-up, sap-only enterprises and more. Presenters will include: Abby van den Berg (Research Associate Professor), Mark Isselhardt (Maple Specialist), Mark Cannella (Extension Associate Professor), Chris Lindgren (Forest Business Coordinator), attorneys, foresters and industry specialists.
For the remainder of April UVM Extension Agricultural Business
will host a 30-minute web forum every Thursday at 12:30pm to keep pace
with emerging COVID-19 issues faced by farm and forest businesses. Each session
will include an update on market situations for our farming sectors
and information on hot topics, as well as time for questions and
Weekly Focus Topics:
April 16th: SBA Emergency Loan Programs
April 23rd: Cash Flow Triage for Small Business
April 30th: Digital Entrepreneurship and Online Marketing
If your farm, forest or maple business is under pressure to plan for COVID-19 disruption, our educators are available for business coaching and can assist with locating resources. We can help with critical business decision-making, assessing changes to markets, financial planning and other issues facing your enterprises.
Contact one of our educators by email or leaving a voicemail to make an appointment:
UVM Extension Business Specialists Mark Cannella, Tony Kitsos, Chris Lindgren, Betsy Miller and Zac Smith 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 2020 ➥ Held at UVM Extension Offices in 9 locations (Online or phone meetings are also available) ➥ FREE!
Contact Christi Sherlock at Christi.Sherlock@uvm.edu or 802.476.2003 to register for one of the appointments listed below.
To ensure adequate preparation, reservations must be made by the Thursday of the week before your appointment. If you require a disability-related accommodation to participate, please call at least three weeks in advance of your scheduled session.
There must be as many ways to harvest timber as there are loggers, likely more. Every approach may not be “best,” but most are acceptable. Each logger has a different set of equipment and a different crew with a variety of experience and skills, forest landowners have varying visions and objectives, and forest managers approach forest systems and forest operations based on their sensibilities. Each of these variables factor into a logger’s approach.
Whatever the circumstances, all parties
desire a positive economic outcome. At all stages of production those who add
value want to be fairly compensated for their work. The win-win result hopefully
applies to both the cash value of materials harvested and the impacts on the
residual stand, as well. Clearly, this is not always how it works out.
When I first began business planning work with logging contractors, one of the first workshops I attended was with Steve Bick of Northeast Forests LLC. I “got” to play a game Steve called penny logging. This game was like production and assembly exercises I had encountered at various lean trainings over the years. The objective: given certain constraints, arrange assets and production to achieve the smoothest, most economic output. Over the years I have become keenly aware of the constraints (terrain, soil, weather, ownership, regulation) on any given timber harvest. The harvest in the video above is an example of loggers using the constraints to their advantage, creating an exciting and elegant material flow. Enjoy!
The University of Vermont is conducting the Northeast Maple Producer Survey to understand the recent development in the maple sector and to inform how education and research can support maple producers. The survey will ask you about your maple production history, forestry practices, business goals and educational interests. Current projects focus on the Northeast but producers in any US state are welcome to complete the survey!
Participants will be asked to complete the online version or print survey. The survey will take approximately 20 minutes to complete. If you would like to complete a paper version you can contact Christi Sherlock at 802-476-2003 or Christi.Sherlock@uvm.edu to have a copy mailed to you.
The results of this survey will be published by University of Vermont Extension, shared in industry publications and discussed at maple conferences beginning in Fall 2019.
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.”
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.