Sap Buying prices

[briduhunt]

I am a small time operation with a drop flue 2x6 all my taps are on buckets. I purchase some sap from a local guy who attended this years Maple Conference in Verona this year. he sat in on the sap buying/selling class. According to him the presenter told everyone that all of the sap buyers should be paying the suppliers a 50/50 split on what is produced from his sap. The presenter said that even with the 50/50 split the producer was still making good money.
I do not know where the presenter was coming from but it might be good for the sap buyer to do the 50/50 split if he had RO, large evaporator and cheap fuel.
So after this session my supplier now wants the 50/50 split on his sap, I can not afford that deal and I might not have the sap supplier any more but I can not afford the split he wants. I tried to explain that my cost for making the syrup was not just the cost during boiling season as everyone else has.
All that considered I offered him .25 per 1 point of sugar per gallon. I believe this price is above last years printed prices on the Journal. has anyone seen the 2011 prices set yet? This may or may not affect my purchase price for buying.
My supplier informed me that the cost and labor for buying the sap verses boiling the sap are about the same. I beg to differ, I know what it takes to collect 150 taps all on buckets and cost of taping and material and what the 150 gal of sap is going to take to boil down which is about 5-6 hours with my equipment. I wish I took that class this year then I might have been able to better understand where this guy is coming from.
Any input on how to address this any better would be greatly appreciated. I would like to still buy this guys sap but I still have to make it worth my wild to do so at a fair price to all.

thanks

[Dave Y]

50/50 split is completly unreasonably. I dont know what that presenter was smoking but that is not true what he was telling him. I bought sap from a guy last year that was singing the same song. He bought a new rig and set him self up to boil this year I'll bet he will have a different view after this coming season!

[Dill]

I doubt he'll find a person to give him a 50/50 split.
The price you offered is way higher than what I've seen quoted. Does he have an evaporator?

[Monster Maples]

I agree with Dave. I would tell the guy to come and help split the wood and cut the wood. Spend all night every night in the sugarhouse with you when you are boiling. Show him the receipts for the filters, filter aid, and the jugs. Some people overlook alot of the details and the work that goes into making syrup. To some all we do is put sap in a pan and boil it. I wish it were that easy, if it were the girl scouts would be doing it!!:)

[wiam]

50/50 is pretty standard in this part of VT. I have heard of guys in Franklin county paying more than that. I would like to buy sap for 50/50!!

Will

[maplwrks]

I buy a lot of sap---I figure that a 50/50 split is very fair. I dion't have of the labor in gathering buckets, tubing, gas for vehicles, etc... I don't know how you guys figure your sap rate, but this is how I do it--

1. check sugar content of sap let's say 2% for easy figuring
2. what is the bulk price of syrup? Let's say $2.80 a pound -- 2.80 x 11 =$30.80
let's do the math--@2% it takes 43 gallons to make a gallon of syrup
30.80 / 43=.71 a gallon. Divide this # by 2 and you get .35-.36 cents a gallon.

These #s are realistic given that syrup prices thuis year should be around the $2.80 mark

[jmayerl]

going rate here last year was .28/gal at 2%, can't remember what the other prices/gallon were at higher percents but I hope its about the same this year. I'm in the same situation where I will need a little more sap than I can get but with syrup going for $10/qt I can't afford to pay any more than that. not to mention any higher and I think i would be past the break even point.

[DrTimPerkins]

According to him the presenter told everyone that all of the sap buyers should be paying the suppliers a 50/50 split on what is produced from his sap. The presenter said that even with the 50/50 split the producer was still making good money.

There is a fairly lengthy article on this subject in the latest "Maple News" and the Cornell Univ Maple Program has a prominent link on their website about this subject http://maple.dnr.cornell.edu/sapbuying.htm I'd guess the author of this was likely to be the person who presented it at Verona. If I were you, I'd look over that article as well as the info on the website to see what the points were that were being made. If you still have questions at that point, contact the author and discuss it with him.

[Monster Maples]

I think that is a good article, and should answer the question of the original poster. Because he falls under the "hobby producer" it is not worth his time or profitable at a 50/50 split, based on the time it takes to make one gallon.

[maple flats]

I attended that seminar and the presenter made a very good case for paying well, but he did not say everyone should pay any specific price. Try the interactive tool that is linked in Dr Perkins post.
The presentation spelled out what you could make buying sap. The examples were all geared to RO's and boil rates, but the seller should not get less because you have low processing ability. On the other hand, your suggested price from post 1 of .25 per point per gal is more generous than the 50/50 you mentioned. A 50/50 will work out to about $.35-.40 per gal @ 2% sap, your $.25 per point is $.50 @ 2%. The split is based on the % of bulk price you would get. The faster your process rate the more you make /hr. This is where faster equipment comes in. When buying sap you make your money in the sugarhouse, when processing your own sap you make your money in the Sugar Bush. Try the table and fill in your numbers. You will see that 50/50 is good. In fact, those with very good processing speed will often pay more than 50/50 just to lure more sap sellers to them. If you really want to buy sap you want the seller to make enough money that they want to expand, if they don't make a profit how long do you think they will do all of the labor and collection equipment investments? Grow your ability and lure as many sap sellers as you can get! The equipment you have or get only makes money when it is working, setting idle makes nothing.

[jfroe939]

The article does acknowledge the profit margin of a large producer versus small producer and the limits of a small producer's less efficient equipment (therefore, the small guy making less syrup in the same available time as a large producer with more efficient equipment). The writer of the article seems to pose the concept that because the larger producer's fixed costs (drop flue pan, filtering stuff, new fandangled equipment, etc) have been paid for with past seasons' syrup, that the bigger producer is now raking in cash left and right and that because of this they should be obliged to fork over half of their revenue for some sort of good faith and social welfare program to the sap seller, quote, "making it a win-win" for the sap seller and the syrup producer. ?? So, if I, the large syrup producer (which I'm not in reality- only 250 taps) stick my neck out and throw a bunch of cash into expensive evaporators and other equipment not to mention my buildings which I use for processing (which aren't exactly tax-free) and then am supposed to jump on the band wagon of doling out half the cost of sap to the sap seller all while incurring the overhead of labor and my own time I spend boiling sap til the clock says "__":00 a.m.?! This isn't charity! I don't see Bill Gates slapping 50% off his Windows software licenses or Exxon pushing 89 octane back to $1.49 just because they managed to corner the market!? Why should anyone pay a penny more than they have to to sap sellers? Until the sap seller says he's not going to sell, then I would never consider paying more than I have to for the sap just because my pockets were lookin' fairly green. I made the investment and put the time in to make it purr. If syrup producers are going to overpay for sap before they have to, it won't take long before sap sellers not only HOPE to get 50/50, but expect it,- or more! This article seems to promote the concept of sap inflation. Seems the writer wants to see $100/gallon syrup. That's fine for the sap seller and the maple producer, but bad for the 30 year-old mother of two who works at the countrystore for minimum who without doubt can no longer even consider buying pure maple syrup for her kids' waffles on Sunday morning after church. Isn't capitalism great! Listen, I get it - you want to grease your sap sellers' pockets a little. You don't want to bite the hand that feeds ya. But at the same time, I don't think it's a great concept to come close to overpaying for sap until it's downright crunchtime and necessary and as long as I can legitimately buy sap for 14-15 cents a point in dairyland I'll consider buying it for that and not alot more. Jason

[Dave Y]

Jason,
Well put! My thoughts exactly.

[nam elpam]

I agree money in my pocket is better than theirs but i also like that i don't foot the bill for the tubing or have to maintain/ dig it out cut the trees off it shoot the squirrells that bite it or even tap it. It just shows up at my door i work 7:00 to 5:00 and spend the rest of the time tending to my tubing nor do i have to worry about losing the investment. besides i thought we did this "hobby" to buy next years shiny cool gadgets. profit???

[maple flats]

good luck buying sap at 14-15 cents a point. You might not get much, but more power to you. The seller will only be there this season because they will lose so much money that they'll not continue. But you just keep all of the money, that is your option.
I do not favor over paying, but if the sap supplier does not come close to paying for their input costs, how much do you think they will want to continue. Remember, your sugarhouse makes nothing with an idle evaporator. Would you rather buy all of the new tubing and expansion supplies and equipment with no outside supply, OK.

[dschultz]

maple flats
14 to 15 cents is the going price in this part of sap country.
The reason for that is we don't get the price for syrup you's do out east

[Flat Lander Sugaring]

A friend of mine has been kicking around tapping out about 315 taps. I sat down and with my very novice level of intelligence of running main lines, lats and all the fittings. I came upto about $3,950.00. So if he gets .32 a gal that is approx. 700 gal sap on a good run (gravity)? thats $224.00. On avaerage I heard we approx. have 12 good runs a year let say. So just over a 1.5yr's he will pay off his tubing, this doesn't include professional help to pay set up it up right the first time. Then every year after that you have new spouts to buy at 122.95. Minor repairs each year. So on a total year would gross $2688.00 at 2%. Now this doesn't include gas for truck or maintenance.
Now if we buy a vacuum system for it thats another 2000 to 3000 I'm guessing. I'm feeling thats a pretty fair price for just gathering and dropping off product
Well love to keep running on but 1 cord wood is waiting to be stacked, I'll be calling soon JT probably tomorrow.

[Thad Blaisdell]

A friend of mine has been kicking around tapping out about 315 taps. I sat down and with my very novice level of intelligence of running main lines, lats and all the fittings. I came upto about $3,950.00. So if he gets .32 a gal that is approx. 700 gal sap on a good run (gravity)? thats $224.00. On avaerage I heard we approx. have 12 good runs a year let say.


These figures are a little misplaced. You are assuming that you are going to get more than 28 gallons of 2% sap per tree.... good luck. The best systems out there with vacuum dont pull that much. You would be making over .5 gal per tap. You need to cut your numbers more than in half as a quart per tap is about what gravity will run.

[Flat Lander Sugaring]

These figures are a little misplaced. You are assuming that you are going to get more than 28 gallons of 2% sap per tree.... good luck. The best systems out there with vacuum dont pull that much. You would be making over .5 gal per tap. You need to cut your numbers more than in half as a quart per tap is about what gravity will run.

ok
I just remember from years ago if you put out 100 taps you need a 200gal bulk tank so that where i was getting my numbers

When I first started sugaring I remember 16qt buckets over running and a lot of them so that is also where I am getting my sap yield from

[maple flats]

Any published charts never give a price/point. The charts are always a sliding scale because 2% is more than 2x as valuable as 1%, and 3% even more so. If you could always buy 4% don't you see the advantage? The price values should be graduated because of reduced processing time. The changes are at each 1/10 point. Of course you don't need to follow any published chart and suce charts always specify that, but take some time to at please follow the price relationships in the charts and understand why they are there.

[briduhunt]

Let me clairfy some things. My sap supplier was supplied all the buckets, taps and drop lines along with 2- 55 gal barrels and 50 taps by me. This year he has collected another 100 or so buckets, purchased a roll of 5/16 tubbing and 100 new taps. The tubbing cost $55 (per 500 ft) and the 100 taps cost $39.00 and he got the buckets free from the local food store bakery. (which I turned him on to) So his total money investment is $94.00.
He is just running the tubing from a tap or two to a bucket on the ground. No real tubing systems at this time. Other then the $94.00 cash investment he just has his labor to collect and gas cost to deliver the sap to my house. The total distance round trip might be 30 miles.
That being said the price of a gallon of gas around here is $3.29 and say his truck gets 15 miles per gallon his gas cost would be $6.58 per trip. If you use the federal gov rate for paying milage they are paying $.505 per mile, then 30 miles x .505 = 15.50 and this would include wear and tear on his truck. So this all being said he could deliver 150 gal of sap to my house for say $15.50 plus his labor of collecting.
I offered him $.50 per gal of 2 point sap, 150 gal of 2 point sap x $.50 = $75.00
Now you deduct the $15.50 cost from trucking from the 75.00 you still have $59.50 total left per 150 gal of sap, of course you have the 1-2 hours of collecting and say that is worth $10.00 per hour that still leave him $39.50.
The key to all of the major discussion I see is that the faster we all can boil it down the more we can produce and at a lower cost per gallon of syrup.
I have older and small equipment (2x6 drop flue) and my cost per gal of syrup compaired to a larger producer is much higher.
I have access to more than I need trees for next to nothing cost, I was trying to reduce my total labor time and cost so I can produce more syrup. I can only make syrup by boiling. I am only a hobbiest but I still look at this as as business in a way. All of the money I make each year I put right back into the hobby, so I am not depending on making a living off this at this point. My new toys I want next are large ticket items, ro, tubing system
and in the future a larger evaporator.
So as I still see it I have offered him a very fair price for his sap all things considered.

[maple flats]

maple flats
14 to 15 cents is the going price in this part of sap country.
The reason for that is we don't get the price for syrup you's do out east

I do not want to start any friction between regions, but my belief is that your region is lower because no one wants to raise the standard. My prices have always been at the upper third of local prices and I sell out every year. Even the year I made my best volume ever (2008) (186 gal on 525 taps gravity) I sold out completely by September. That year I got $49.00/gal and $14/qt, higher per oz as sizes got smaller.
Since I have raised my price to $52 in 2009 and sold out in June and then $54 in 2010 and sold out in April. Prices around me were in that range or less, for example just 12 miles away a guy sold gal at $35 in 2008. I like to think my syrup is better, but I likely have similar quality to most others. I do no advertising except I put a sign out roadside during the season. My belief is that your part of sap country will do the same or fairly similar if you just start charging closer to us Easterners. Do not jump all at once, the biggest gal price climb I ever had was $45 to $49 in 2008, and that did not slow sales, in fact I sold out earlier than 07 even though I grew from 410 taps to 525 taps that year and had a fairly average season in 07 (approx 1 qt/tap.)
Back to the sap price question, pay a little more and spend more time boiling, you will end up with more cash to show for it.
I urge everyone to go to the price calculation tables in the link at the top and really study what is in there and how much it translates to for cash in your pocket after you sell it all. Mike Farrel (the author), of Cornell and director of the Ueilhen (spelling?) maple research facility in NY, was right on the money. Which would you rather do, work tubing or make syrup?

[DrTimPerkins]

My general thinking is that in some places the price paid for sap is too low, and the correlary to that is that very often the price charged for syrup is also too low.

However....being that this is a business transaction, the bottom line is that the amount you wish to pay for sap and the amount the seller wants to get is something that is negotiated beween the two parties based upon how much you want it and how much they want to sell it. No chart in the Maple Digest or Maple News, or an Excel spreadsheet is going to fit every possible situation....but they do make a good starting point for discussion.

[mlf36]

I haven’t posted on mapletrader before but I was told there was a lengthy discussion about this topic, so as the author of the article in the Maple News and the presenter at Verona, I’d like to clarify a few things. First of all, the spreadsheet that folks can download from the Cornell Maple website is meant to be a guide that sap sellers and buyers can use to determine the price of sap. I have never and will never tell anyone what they should do in a particular situation. I am an economist by training and have been working on developing better tools for sugarmakers to use in order to assess the economic aspects of their sugaring operations. I developed this after noticing that the prices listed in the Digest only take into account the sap sugar concentration and do not factor in the price of bulk syrup or the percentage of the syrup (or bulk price of that syrup) that the sap seller receives. We all know bulk prices fluctuate and while many people simply go with a 50/50 split on the syrup that is produced, obviously that is not always the case. This spreadsheet is designed to provide a price of sap based on the percentage of the syrup that the person selling the sap would receive, the bulk price of the syrup produced from delivered sap, and the sugar content of that sap. The only value that folks have to change for their situation is the percentage of the syrup that the person boiling the sap retains, or the percentage of the syrup that the sap seller receives, whichever way you want to look at it.

Let’s consider an example of a situation where John has a sugarhouse and boils sap and Tim has a woodlot and gathers/delivers sap to John. If Tim brings John 4,000 gallons of sap over the course of a sugaring season, that would allow John to make about 100 gallons more syrup that he otherwise would have been able to make. The question that John and Tim need to answer together is how many of those 100 gallons John gets to keep and how many Tim receives. Often times this is done on an even split so John would keep 50 gallons and Tim would keep 50 gallons. If both Tim and John are happy with that arrangement, then it is a win-win situation. If Tim would rather have money instead of the 50 gallons of syrup, then the spreadsheet calculates the payment from John to Tim based on the bulk price of syrup. Since no sugarmaker can control what the bulk price of syrup is and the trees produce whatever sugar content they are able to, the only negotiable factor is what percentage of the syrup (or price of the syrup) each of the parties receive. This will vary from situation to situation and I am not advocating any specific value. The spreadsheet only defaults to a 50/50 split because that is the most common arrangement that I hear of. As I mention in the article, sugarmakers with small equipment that cannot process sap efficiently may not be able to offer someone 50% of the syrup and make any sort of profit from this transaction. On the other hand, large sugarmakers who can rapidly process sap into syrup with energy efficient ROs and evaporators might be able to offer even more than 50% of the syrup to someone who delivers them sap and still make a profit. Furthermore, since the large sugarmakers have invested so much money in their equipment and it doesn’t make any money when sitting idle, these sugarmakers have a large financial incentive to purchase sap in order to make the most of their equipment and pay off any loans they may have taken out to purchase their ROs, evaporators, etc. The “hourly wage calculator” shows the amount of money a sugaring operation is making on an hourly basis when purchasing sap, and you can use this as a guide for your own situation by simply plugging in your values. I would encourage anyone who is buying sap to go to www.cornellmaple.info download the spreadsheet and read the article that is posted on the website. By understanding the particular economics of your situation, you will be better able to determine if buying sap makes sense for you, and if so, what percentage of the syrup (or bulk syrup revenues) you can afford to give to someone who delivers sap to you. If you have any questions, please feel free to send me an email at mlf36@cornell.edu or post on this forum. Thank you.

[WESTVIRGINIAMAPLER]

Thank you for your post and it is good to have you one board here and we look to hear more of your opinions and expertise!!! Like everything else, no matter what you do or say, you can't make everyone happy! :)