Demand for syrup

[jfroe939]

I'm just thinking out loud, sort of...
It seems like every year the guy with 25 spouts goes to 50, the guy with 200 goes to 350 and the guy with 800 surpasses 1000. I get that from the tag at the bottom of everyone's replies and comments. Rarely do you see a tag that says 2010 - 500 taps; 2011 - 400 taps, 2012 - 350. The trend is usually up. Part of it is desire to generate more income the other is just that doing more taps is kinda like doing more reps lifting weights - it's considered a greater achievement amongst maple breathern.

While more taps are going out across the U.S. and Canada every year, the price stays solid or goes up incrementally for the finished product. I'm probably answering my own question, but is demand for syrup that strong? Can we see increasing prices for the next 10 years and demand strong enough to overcome increasing tap counts and the doubling effect of vacuum? I'm sure if demand were wavering we'd see that hit the price sooner or later. Somebody out there has the statistics, but where is the increasing demand coming from? I don't doubt the demand. I'm asking more out of curiosity because I'd like to know where the demand has grown strongest in the last 10 years. I'll assume the largest growth used to be domestic, but is switching to some overseas country like China. I'd also like to know if the tap count is catching up to demand and if it isn't, where are we likely to see prices head in the next 5+ years. Anyone care to comment?

[500592]

I can say that every year we go into the season with no enough syrup that is why they buy bulk

[maple maniac65]

Someone is thinking ahead and that is probably why Canada now has a qouta and no new expansion. The dairy business experienced this and I am wondering if maple is headed down that road. If you have a chance and get Bascom's catolog read Bruce's comments. Right now maple is a good investment in the USA. The only thing holding the production back is one thing we cannot control and that is good old mother nature.

[Flat Lander Sugaring]

i think bulk has dropped like 30 cents a pound in last month, why not sure, what I "heard" a lot of syrup supposedly goes to the UK and because of their economy they aren't buying so price dropped. for retail I hear a lot of guys sold out waiting for this crop.

[CTfarm]

I have 2 natural food stores in Texas and have seen the demand skyrocket over the last two years. There is a diet plan that calls for grade b maple syrup, cayenne, and lemon juice. Women come in and buy two or three bottles at a time.

[SDdave]

I am sure the "eat local" thing helps demand a little, well maybe a fraction overall. Just my $0.02.

SDdave

[500592]

Also china buys a lot of syrup

[twitch]

just herd on the radio that the price of syrup is going to be high this year do to the winter we didn't have

[DrTimPerkins]

As bad as too much syrup can be, the same type of danger exists when there is too little. Prices spike upward = happy maple producers, sugarmakers add lots of taps, bulk market (those who use syrup as an ingredient) demand plummets due to high prices, prices contract = unhappy maple producers. It is VERY hard to regain those industrial markets once they're lost. That is why the Federation instituted a quota system and maintains a strategic reserve of syrup (35-50 million pounds)....to keep supply and demand somewhat balanced. Current expansion in the U.S. is, in a way, riding on the back of the Federation and Canadian producers to some degree. Then again...the Canadian Government subsidized the maple industry for many decades, which seriously impacted U.S. production for a long time. It's a very complicated and interesting system we have. Given that there are no real accurate crystal balls out there forecasting the future (supply, demand, economy in the U.S. and elsewhere, costs, regulation, etc.), so take advantage of the good prices while you can.

[twitch]

lots of veriables thought it was kind of funny the local radio station is pridicting the syrup price for the season. Maybe they have got the crystal ball!!



As bad as too much syrup can be, the same type of danger exists when there is too little. Prices spike upward = happy maple producers, sugarmakers add lots of taps, bulk market (those who use syrup as an ingredient) demand plummets due to high prices, prices contract = unhappy maple producers. It is VERY hard to regain those industrial markets once they're lost. That is why the Federation instituted a quota system and maintains a strategic reserve of syrup (35-50 million pounds)....to keep supply and demand somewhat balanced. Current expansion in the U.S. is, in a way, riding on the back of the Federation and Canadian producers to some degree. Then again...the Canadian Government subsidized the maple industry for many decades, which seriously impacted U.S. production for a long time. It's a very complicated and interesting system we have. Given that there are no real accurate crystal balls out there forecasting the future (supply, demand, economy in the U.S. and elsewhere, costs, regulation, etc.), so take advantage of the good prices while you can.

[markcasper]

While the bulk syrup price has remained "stable" the past few years, the rate of real inflation has been between 11-14% per year the past two years. So using those numbers, syrup really has gone down in price about 25%, but no one sees it until you go to buy inputs and put gas in your vehicle to deliver syrup. I am dumbfounded that with as much production currently taking place that prices have not slid lower. There have been many reports of extra syrup sitting around and people being unable to move it. If this year is a good one I think I know where prices will go.

[ennismaple]

IMHO maple is going the same direction as beef, dairy and other forms of farming. Technological advances are allowing us to get more yield from less land which helps offset the declining number of producers. Those of us making syrup simply have to make more of it by adding taps, CV's, high vacuum etc... to keep the total yield the same.

[DrTimPerkins]

While the bulk syrup price has remained "stable" the past few years, the rate of real inflation has been between 11-14% per year the past two years.....

2009 inflation rate = -0.34%,
2010 inflation rate = 1.64%,
2011 inflation rate = 3.16%

An annual rate of 2.5-4% has been typical over the past 10 years, with an average of just under 4% since the end of WWII. At the same time, syrup prices have gone up slightly each year (as long as we don't include the "crazy" $4.00 per pound prices for a brief period, 2008 I think).

The Federation (Federation of Quebec Maple Syrup Producers) is sitting on a strategic reserve of about 30-35 million pounds right now. It'll probably be about 25-30 million pounds by the time they start taking in syrup after this season. This reserve was built up over the past 2 years....most of it from the 2011 crop, which by all accounts was HUGE in all maple-producing regions. That is not a terribly common thing to have happen. Typically some regions do poorly, most do OK, and some do well. So if we assume that everybody in every state and province has another HUGE crop this year (2012), then the Federation puts another 30 million pound surplus into their strategic reserve, which brings them up to their full target level of 60 million pounds. Although it could happen, I doubt we'll see another crop as big as the 2011 crop. At the same time, syrup is selling pretty well, and markets are expanding. Again, no crystal ball here, and I could well be wrong (lots of factors involved), but I don't see syrup prices really tanking anytime soon. If we all have a HUGE crop (again, that is fairly unlikely), syrup prices may stop going up, or may even go down a little, but I don't think it is terribly likely in the short-term that prices will drop quickly. Furthermore, the Federation recently announced their 2012 crop prices....all grades went up by the consumer price index of 3%. Then if we want to get really nuts...we have to start thinking about how the U.S. to Canadian dollar exchange rate has affected all this.

[Ecnerwal]

I'm just thinking out loud, sort of...
It seems like every year the guy with 25 spouts goes to 50, the guy with 200 goes to 350 and the guy with 800 surpasses 1000. I get that from the tag at the bottom of everyone's replies and comments. Rarely do you see a tag that says 2010 - 500 taps; 2011 - 400 taps, 2012 - 350. The trend is usually up....<snip>
Anyone care to comment?

Probably very few of the folks that throw in the towel are hanging around here to post about it. But folks do throw in the towel. Local paper did a piece a few years ago, and something like 1 out of 5 farms that used to make syrup still were. Of course, quite a few were also giving up on farming at all, and nobody taking them over to farm, so...housing developments don't make much syrup.

[DrTimPerkins]

Probably very few of the folks that throw in the towel are hanging around here to post about it. But folks do throw in the towel. Local paper did a piece a few years ago, and something like 1 out of 5 farms that used to make syrup still were. Of course, quite a few were also giving up on farming at all, and nobody taking them over to farm, so...housing developments don't make much syrup.

Agreed. And like most things in agriculture, it's get bigger or get out (economy of scale)....if you're in it to make a living at least. Most of those producers were probably bucket operations. Not a lot of those left around here on a commercial scale anyhow.

[500592]

At the same time I think there has been an increase of small or hobby maple producers now that I am involved there are a lot of decent operations nearby that before I had never thought were there.

[bowtie]

i agree it seems like most everybody on this site is trying to get bigger, i started two years ago with 15-20 buckets and an open pan on a fire pit, this year i will have 160 ish buckets and in 3-5 years would like to be at at least 500. i really enjoy the time outside and if i can make a little money to offset the cost why not. my others hobbies hunting,fishing and gardening cost me thousands each year so my wife is ok with this one. i also think that are many producers that are either scaling back or getting out altogether but they are not going to announce it or be active on this or any other site. the one variable i did not see mentioned was the fact the the population is growing quite rapidly and there are no signs it will ever slow down. also with urban sprawl think of all the land lost to farming and sugaring that were available before. we may saturate the market for a little while but i doubt it would last long because of all the reasonsstated in the posts

[Starting Small]

I think there is one more piece to this equation. All of us little producers with 100 or less taps are like guerilla marketers. We hit up people for sales that might never have thought to purchase syrup. We are in a way creating a market by introducing people to something they may never have experienced. They in turn increase the demand because now it may be a part of their family kitchen and then expose friends/relatives and the market grows. I sell honey and I sell out in 4-6 weeks every year. Every year people are clamoring for more and more. Many of these people started by just buying one jar and now they cannot imagine a cup of tea without it. Also with honey, and I am sure it is the same with syrup, people love to give jars as gifts. As the little guys we are the ones bringing the syrup to the public instead of the public coming to us. Since we do not have a store front we have no other choice. Grass roots marketing at its best! Everyone benefits because the demand we cannot fill because of our size the larger outfits get the extra customers. I guess the little guys might whet the customers appetite and the big guys satisfy their growing need/want for syrup. Everybody wins.

[West Mountain Maple]

We hit up people for sales that might never have thought to purchase syrup. We are in a way creating a market by introducing people to something they may never have experienced.
Exactly, I think the maple industry needs to fight for its place in the national market and it would gladly be accepted. There is so much untapped potential demand its crazy. Do you know how many people literary do not even realize that these national brands of corn syrup are not maple at all. Cant we get it to be THE sweetener of choice, available at every coffee shop coast to coast, or see some real pure maple candies in the candy bar shelf at the store. What Do you think the percentage of the U.S population that has even had the pleasure of tasting pure maple candy is? Id bet less than 10%. And how many would be hooked after trying it? Got milk? Incredible edible egg? How bout a national maple campaign!

[Redmaple]

Food is going up in price PERIOD. If Bascoms doesn't want to pay more for bulk the local guys will and you save on gas. :o

[Dill]

There is a move to expand beyond the traditional market and the industry is helping us. I believe this is why we are seeing things like the new international grading standards. Why are all the packers getting bigger? Why are the big guys expanding? I don't see the industry dropping off anytime soon.

[markcasper]

2009 inflation rate = -0.34%,
2010 inflation rate = 1.64%,
2011 inflation rate = 3.16%

An annual rate of 2.5-4% has been typical over the past 10 years, with an average of just under 4% since the end of WWII. At the same time, syrup prices have gone up slightly each year (as long as we don't include the "crazy" $4.00 per pound prices for a brief period, 2008 I think).

I am not sure where the above numbers were sourced from, but REAL inflation is much higher than what is stated. If CPI numbers were used they are extremely bogus and are more less a lie, just as the unemployment numbers in America are. Food and energy prices are not included in those numbers and is absolutely silly because nobody I know can live without either. To not include food and energy inflation would be like telling a syrup producer not to include the cost of the sugarbush and sugarhouse on their expense sheet.

Things are ok in the syrup business as long as prices do not fall much below current levels. The increased production from improved vacumm systems has helped in sustaining many operations. In my area syrup prices have basically doubled since the early 90's whether bulk or retail, along with most of the equipment.

[Greenwich Maple Man]

I think alot of truth is in this thread. Doctor Perkins is right in that being a larger expanding producer you either need to grow and use the new modern ways or stay small. Vacuum, R.O. etc. is and has changed everything in the larger scale operations. One thing that I think all producers need to be watching for is over pricing there product. Remember that syrup to the everyday person right now, is not a must on there food bill. If the price goes crazy people will start to shy away. I've seen some crazy prices on syrup and wonder how much higher it can go without losing a consumers. Overall I think the industrie is growing and in a very healthy direction. There is alot of large producers making staggering amounts of syrup, but how many young people of today do you know that are going to want to do the work to make 1000 gals. a year?

[DrTimPerkins]

....Got milk? Incredible edible egg? How bout a national maple campaign!

Both of those commodity groups have a national market order, which allows the collection of a small fee to be used for local and national marketing efforts. Maple in the U.S. doesn't have this. In Canada, it is part of what the Federation does (and charges the producer for).

[Dill]

[QUOTE=Greenwich Maple Man;175927 Remember that syrup to the everyday person right now, is not a must on there food bill. If the price goes crazy people will start to shy away. I've seen some crazy prices on syrup and wonder how much higher it can go without losing a consumers.[/QUOTE]
I don't know, I always have subscribed to the don't over price model. But I look at some of my clients selling local farm stuff around here and I'm more and more convinced that if you can sell the idea, people will pay darn near anything. 6 and 7 lb chicken, 6/dozen eggs, 10/hamburger, and so on. Lets not sell ourselves short.

[DrTimPerkins]

I am not sure where the above numbers were sourced from, but REAL inflation is much higher than what is stated. If CPI numbers were used they are extremely bogus and are more less a lie, just as the unemployment numbers in America are.....

None of these statistics are lies. They are simply indicators of what they measure, which are typically pretty well defined, and are generally well accepted by economists as having a standard meaning. You may not necessarily agree with what is being measured, or how it is being measured, and that is certainly within your rights.

The source I cited for annual inflation rate is ftp://ftp.bls.gov/pub/special.requests/cpi/cpiai.txt which are the U.S. CPI-U (which covers about 90% of the U.S. population) as calculated by the U.S. Labor Dept, and is THE benchmark source for what is commonly referred to as the "inflation rate." Although gasoline and food are not included in some derivative forms of CPI calculations (those variants seek to reduce the effect of short-term volatility on the indicator), gasoline, food, and fuel oil all are most certainly are included in the "market basket" which serves as the basis for CPI-U calculations, and are reflected in the inflation measures I stated in the earlier post.

The term "Real Inflation Rate" on the other hand does not have a standard source (or a standard accepted meaning among economists) or definition, but is used by a handful of sources....most of which are seemingly trying to sell you their books or publications, get you to go to their lectures, or get you to vote a certain way. Anyone who wanted could probably come up with an algorithm that showed that their inflation rate was going up, down, sideways or whatever you liked. Calling it "real" doesn't make it any more meaningful. That is the reason that the U.S. Government calculates CPI (and the derivatives) based upon a set of standard, well-defined and accepted methods that are published and verifiable.

Having lived through the inflationary period in the late-1970s and early-1980s, what we experiencing now is nowhere close to high inflation. My first car loan was 17.5% (now that is "real"), mortgages were running 10-20% at the time. An annual inflation rate of 10-11% would be quite noticeable, especially when compounded over even 5-10 years. A few years ago when the economy was in a real deep hole, the concern was not inflation, but deflation.

I would like to respectfully suggest that if you'd like to continue this conversation, that we start a new thread in the "off-topic" section of this site. If you wish to do so, just send me a PM to alert me to the thread.

[English River Maple]

I'm just thinking out loud, sort of...
It seems like every year the guy with 25 spouts goes to 50, the guy with 200 goes to 350 and the guy with 800 surpasses 1000. I get that from the tag at the bottom of everyone's replies and comments. Rarely do you see a tag that says 2010 - 500 taps; 2011 - 400 taps, 2012 - 350. The trend is usually up. Anyone care to comment?


We also don't see many people writing in to Maple Trader talking about their situations in how they're "getting out" of maple sugaring all together any various reasons...most who are with Maple Trader are passionate about making maple products, which means you'll only hear the "I'm adding more taps" stories.

[Red-bellied Woodpecker]

I would say that we will never meet the true demand for syrup. It seems to me that most only look at the local demand for syrup and not at the whole US (or world for that matter)...I will be spending a 2 weeks on the road this year hitting farmers markets out of the syrup belt ( and doing some elk hunting) and what I found out last year is that the demand for syrup in those areas are through the roof and that I wont be able to fit enough syrup in my trailer for the trip. Also found out that even though farmers markets normally are for local goods the people are more then happy to have someone come and offer a product that they cant get in their state and get at a price they will never see other wise.