Maple Planning Tools are Now Available Online

University of Vermont has created a suite of short-form business planning tools for maple operations. The Maple Business website provides web-based modules that include a yield calculator, a pricing tool with a sales forecast report, and a budget tool with a cost analysis report. A self-guided business plan is also available for users to draft and print sections of a written business plan. The modules offer an optional log-in feature that enables users to save their progress and return to work on their plan at another time.

Are you developing a new marketing plan? Using the Gross Sales Forecast a maple producer can take their entire maple crop and assign it to different container sizes and prices. Here is a sample report for 6,000 tap enterprise selling 80% of the crop as bulk syrup and 20% in retail containers.

More Maple Business Coming in 2019

Northeast Maple Producer Survey: In late August UVM Extension will be sending a survey across the Northeastern United States inquiring about business practices, business outlook and forestry practices.

Maple Leasing Resources: In Fall 2019 UVM Extension will begin publishing a series of maple leasing templates and legal resources to guide the development of business partnerships and other business-to-business relationships.

Are you looking for a new resource or business calculator to move your decision-making forward? Contact Mark Cannella at UVM Extension Maple Business today and share your ideas!

Crop Insurance Resources and Winter Webinars


From Jake Jacobs, UVM Crop Insurance Education Coordinator

A series of webinars on various crop insurance topics is being presented this winter through a combined effort between Penn State Extension and National Crop Insurance Services (NCIS).  These are designed to familiarize farmers with the various insurance options and to help producers make decisions about how crop insurance might fit in with their farm’s risk management plan.  For each crop, participants will learn:

  • What crop insurance products are available
  • What risks are covered
  • How different types of insurance work
  • What options within each policy are available
  • The application process
  • Where to go for additional information and help

Here are the webinars scheduled in the 2nd half of February:

2/26/19              Green Peas

2/28/19              Oats

For a complete list of all remaining topics in the webinar series, go to the NCIS webinar link:

For resources on agricultural risk management for Vermont producers, visit the UVM Ag Risk website

https://go.uvm.edu/ag-risk

USDA and the University of Vermont are equal opportunity providers and employers. This material is funded in partnership by USDA, Risk Management Agency, under award number RM18RMETS524C022.

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.

Policy Options for Maple Marketing into the Future

New maple products like sap beverages and infused syrups now join the classic pure maple syrup products on store shelves and online platforms. Will US maple market policy and collective marketing entities  innovate in new ways too? What options are available for collective marketing efforts here in the United States?

Two possible options for the maple sector are producer cooperatives and federal market orders. Both options require strong leadership from industry representatives, committed support from members and ongoing management to sustain the effort.

Market Orders:

Vidalia onions, “Got Milk”, Florida Oranges…sound familiar? Producers in these industries approved collective efforts funded by small assessments (often pennies per pound) through a Federal Market Order (FMO). FMOs provide a way for producers and handlers to work together to accomplish things they could not achieve on their own. Orders do this by (1) maintaining the high quality of product that is on the market; (2) standardizing packages and containers; (3) regulating the flow of product to market; (4) establishing reserve programs; and (5) authorizing production research and marketing efforts.    Read more about current Specialty Crop Market Orders on the USDA Agricultural Marketing Service website.

Producer Cooperatives

Producer cooperatives can be formed in many different ways with different goals. Cooperatives could range in size from only a few producer members to thousands. A new Cooperative establishes a legal business entity that is owned and overseen by members. Here is a list of co-op activities that may be relevant for a group of maple producers/members.

  • Collective ownership of processing facilities to store, process, and package bulk syrup into a marketable format.
  • Collective ownership of pooled market-ready product and/or active marketing efforts to sell the products.
  • Supply Cooperative: pooling member demand to access production inputs and supplies at reduced costs to its members.
  • Establishment of farm gate prices/contracts that eliminate the year to year volatility and uncertainty of final crop sales prices after the production season.
  • Establishment of verified product standards or unique features that enhance the distinction of coop products from other similar products available to consumers
  • Coordinating large numbers of participants into a unified and powerful voice for political organizing and communications campaigns that promote the interests of the membership.

Examples of specialty crop  farmer coops in the US that are relevant to maple producers:  Hazelnut Growers of Oregon, Organic Valley (CROPP), Deep Root Organic Coop.

 

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!

Maple Markets: International Trade Snap-Shot

US-Canada

Update: On October 1st 2018 the new United States-Mexico-Canada Agreement (USMCA) was announced…details are still emerging (10/4/18) Original post written on 9/30/18. Canada placed a 10% tariff on US maple syrup exported into Canada in 2018. While some US syrup or US finished maple syrup goods do get sent to Canada the volume is small. This trade dispute retaliation from Canada is not expected to have huge impact on US maple syrup distribution. Canada exports far more syrup into the United States. The overall US-Canada trade situation that include steel, aluminum and other products  will have a more pronounced impact on maple equipment and manufactured goods crossing the US-Canada border.

Roughly 62% of Canadian export syrup reaches the United States. The result is that over half of maple syrup consumption in the United States is Canadian syrup. The UVM Extension Maple Business team ran a rough calculation on the 2017 value of Canadian syrup imported into the United States. The Canadian imports represent roughly 18 million maple taps at the prevailing US maple yield per tap.

A look at recent and defunct trade agreements…..

European Union

Comprehensive Economic and Trade Agreement (CETA) was approved in 2017. CETA includes Canada and the European Union.  The agreement removes tariffs on Canadian syrup imported into the European Union. The US is not part of this agreement and US syrup is subject to an ~8% tariff when imported into the EU.

Trans Pacific Partnership (TPP) Trade Agreement

This agreement between many nations was set to eliminate the 17.5% tariff on US (and Canadian) maple syrup entering Japan. Japan represents a significant existing export market for Canadian maple syrup and a possible growth area for US exports in the future. The United States pulled out of this trade agreement in 2017 and the tariffs on US maple remain in place.

The New Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) This agreement was made by the remaining TPP nations without the United States. Under that deal the tariffs on Canadian syrup imported into Pacific nations will be phased out in the next few years.

 

Dairy Summit and Industry Proposals

Posted by Betsy Miller, UVM Extension Farm Viability Coordinator

On August 13, 2018 Agri-Mark hosted a Dairy Summit in Albany, NY.  This was an opportunity for farmers and dairy industry representatives to discuss the current state of dairy pricing and to offer proposals for a new structure.

Proposals posted on the website share a common theme of supply management and price stabilization.  Many suggest a pro-active approach lead by co-ops.  Expansion of current farms and entry of new farms into the business are both areas that offer challenges to the idea of a quota system.   All seem to agree that this is a complex problem that doesn’t have an easy solution.

Proposals are available to read and comment on at this site:  https://dairyproposals2018.com

The UVM Extension Farm Viability program provides one on one business planning to farm owners in Vermont. For more information see the program summary page.

 

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.

Trade wars, price uncertainty and agricultural branding

Photo Credit: Mark Isselhardt

Escalating trade disputes are reverberating through US farm sectors and our US specialty products. Farming sectors could become minor bargaining chips or worse, collateral damage, as high impact manufacturing interests drive the policies. In Vermont the two primary ag drivers of dairy and maple may get caught up in the fuss. Ironically, our suffering US dairy economy and dairy families have been pitted against Canadian farm owners and a supply management system that has facilitated viable milk prices for smaller farm operations. The liquid gold of maple flows freely across the US/Canadian border. At least it did. In 2017, 62% of Canadian syrup exports came to the United States ( US Maple Statistics)

Have Canadian imports been flooding US markets with cheap syrup? Until recently most US bulk syrup was purchased on parity with Canadian market price after currency exchange adjustments. Again, Canada has a market management strategy to stabilize prices (for better or worse) and US producers received the benefits of price predictability.

Branding could be equally important in future trade policy. In Vermont we have enjoyed an explosion of artisan cheese in the past 20 years. Vermont makes darn good cheese. But we fall prey to a cultural delay on developing the necessary protections to promote or protect our regional foods. For years many award winning Vermont cheeses have been “cheddars” “tomme” “french alpine”. Now we are seeing regionally named products like Rupert . Will US producers organize themselves to adopt the legal process verification that European food-rich regions have mastered with Champagne (the legal process)  and Cheddar (the verb!)?

Dairy Financial News: Update on USDA’s Margin Protection Program for 2018

The sign-up period for MPP coverage in 2018 will close on June 1, 2018.

If you’re shipping milk you should check out how the USDA has revamped the Margin Protection Program (MPP) for 2018. Premiums have dropped, especially for Tier I pricing (less than 5 million lbs of milk). Here’s how it works.

The program makes payments when the monthly margin between the U.S. all-milk price and national average feed costs falls below the level of coverage chosen by the producer. Above the basic $5 margin level for the first 5 million pounds there are supplemental coverage options available for purchase in 50-cent increments. Supplemental coverage can extend up to $8/cwt. The program pays on one-twelfth of a producer’s annual production history, multiplied by the percentage of supplemental coverage chosen, from 25% up to 90%, plus the remaining coverage provided on the farm’s production history at the basic $5 level. Once a farm enrolls in the MPP it is committed to the program through 2018. Farmers must have an up-to-date Form 1026, signifying that they meet conservation requirements, in order to participate.

For example, if you use 3,000,000 lbs milk production history and the $8.00 MPP level and elect to insure 90% of that production you could receive an estimated $13,897 in total payments. At a premium cost of $4,196, that’s a net return of $9,701 for the whole year, after premiums are covered. The January, February and March margins are set, and in the above scenario, the payout so far in 2018 is $8,798, more than covering the $4,196 premium. This program is worth revisiting!

For more information, follow this link to the MPP Decision Tool  where you can make inputs specific to your farm. The sign-up period for coverage in 2018 opened on April 9 and will close on June 1, 2018. The U.S. Department of Agriculture is allowing farmers to opt out of coverage for 2018. For more information, contact your local USDA Farm Service Agency (FSA) and ask about MPP or read this MPP Factsheet.