Is the ag senses accurate?

[beetree]

I am looking for some good hard numbers on syrup per tap that can be expected from a high vacuum system. The ag sense numbers are a lot smaller then what I see and hear from other producers. I get close to the .308 that they report from my gravity systems. I know these are just averages but I'm thinking that It will be a hard sell at the bank If I cant show more of an up side. Any help would be appreciated.

[spud]

I have a friend that gives farm loans here in Vermont. When it come to sugaring they use a .4 GPT average for high vacuum operations. It is very possible to get a .6 or higher if you have the right set-up and good trees. If you go to PMRC web site and print out their production numbers for the last 6-7 years you will find they have a .6+ average. If you could sell that to the bank you might walk out with a nice size loan.

Spud

[maple flats]

unfortunately many who complete their Ag Census don't use totally honest numbers. They think the IRS will come down on them if they do. This fear creates a huge error in the data. Another factor is having some who do report are short term producers (they might tap, process and then quit while the season is still ongoing, (they tire of it).
When you complete your Ag Census, be accurate and complete. If you have never received an Ag Census to complete, contact the US Ag Census and register. The more complete and accurate the better. It helps your state, state association and individual farms by opening up funds and getting grants to further expand, promote and grow the industry.

[GeneralStark]

Despite having produced more that .5 gpt with vacuum in two of the last three seasons, I use .4 gpt for all financial projections for my business. When it comes to income projections I prefer to be conservative as even with high vacuum, there are other factors that can limit production such as weather.

I think that .4 gpt is pretty safe if you are using a properly designed and installed tubing system and a correctly sized pump. Don't project .4 or .5 and then just hook an old dairy pump to your gravity tubing systems and expect to get there. I know several folks that did this and their production did not increase.

[beetree]

Thanks for the help! Unfortunately the lenders in my area are completely ignorant to our product and how it is produced so I feel that I will be doing allot of educating. I hate to even have to go to the bank but I think its time.

[markcasper]

One item that noone has mentioned yet is the ability to market your syrup. Its all dandy to talk about average production numbers in regards to securing a loan. But that is only part of the equation. Will you be able to market and sell your syrup along with getting paid to finance that loan? If a bank knows that there are many producers currently sitting on drums of syrup and not able to sell them, the bank probably is going to be more reluctant to lend even a dime. Just saying.

[GeneralStark]

One item that noone has mentioned yet is the ability to market your syrup. Its all dandy to talk about average production numbers in regards to securing a loan. But that is only part of the equation. Will you be able to market and sell your syrup along with getting paid to finance that loan? If a bank knows that there are many producers currently sitting on drums of syrup and not able to sell them, the bank probably is going to be more reluctant to lend even a dime. Just saying.

Good point. If you have already developed a retail or wholesale business and have numbers to back your projections it will be easier to secure funding than trying to get a loan with nothing to show.

[beetree]

Good advice. I like to think I am ahead of the pack on that one. I've been growing a wholesale distribution business with maple at its core for about 8 years now. Iv had a steady 40% growth for the last six.The problem is that i cant produce enough syrup to keep up without buying bulk and I hate the drop in my margins when i have to do that. Im selling over 500 gal a year now,witch is great on a year like this when i can make that much, but what I relay need is more production and efficiency. My neighbor just bought a 1000 tap woods a half mile from my house, and is very interested in leasing it to me. So, I think it's time to take this thing to the next level.

[beetree]

I have a friend that gives farm loans here in Vermont. When it come to sugaring they use a .4 GPT average for high vacuum operations. It is very possible to get a .6 or higher if you have the right set-up and good trees. If you go to PMRC web site and print out their production numbers for the last 6-7 years you will find they have a .6+ average. If you could sell that to the bank you might walk out with a nice size loan.

Spud

I cant seem to find this info on their web site. any suggestions?

[DrTimPerkins]

10 yr UVM PMRC average production is 0.60 gal/tap.

[500592]

Do you have many laterals with more then 2-3 taps or are they all around 5.

[unc23win]

Thanks for the help! Unfortunately the lenders in my area are completely ignorant to our product and how it is produced so I feel that I will be doing allot of educating. I hate to even have to go to the bank but I think its time.

I had this same problem in PA I tried getting a loan through Farm Credit considering Maple Syrup is Agricultural well they didn't seem to know anything about it they were not at all interested in how much syrup I made they were more concerned with refinancing and collateral. I worked with the agent for like a month they wanted tons of stuff. Then finally it was a no go.

About a week later I got an open line of credit loan for the full amount I wanted from my local bank for 10 years. Best part is anything I pay off I can then borrow again so depending on how good 2014 is I can keep expanding or use the loan for something else. Your local bank most likely won't be interested in potential profit either they will be more interested in how much loan you can afford.

Sounds like where Spud is it’s like a Dairy farmer getting a loan here they want to know how many cows you milk. I thought that would be the case here with Farm Credit not at all.

[Spanielslovesappin]

Farm Credit East in Batavia NY talks/gets maple but you still need either the maple biz or other situation to make the loan a good bet for them.
They are great to deal with, have low rates and the loans maple producers take out are pretty small for them; unless you are looking to finance a 70000 tap operation from scratch. Call them perhaps they can help educate your Farm Credit on Maple?

[BreezyHill]

Beetree, Be sure to do a business summary with your business plan. Talking to a bank and educating them is not so bad. I took a bank that was refusing to do loans into the ag industry and got a sizable loan approved in short order. The key is to be able to show you are educated and can invest wisely. Take your vacuum system for instance; the use of a $5K pump over a .5K pump is justifiable in some minds; but from an economics stand point, the use of a quality dairy pump at under $2/ day vs $35/ day; will get you approval. When it comes to investing, Farm Credit or banks like to see that a customer has crunched the numbers and is making sound expenditures. Be sure to show the high side off expense options production, and over head; and the reason you choose those used. Otherwise when they do their checking they will have questions that you will need to answer and explain your response; provided they don't just decline the request. The numbers are easy...if you are requesting a loan for equipment that exceeds the recoverable value of all the new items and the collateral by more than 2-3x, chances are slim. Also be sure to show the income that will be used to pay off the loan. I have a fair amount of experience in business plans so send a pm if you need assistance.

[GeneralStark]

Beetree, Be sure to do a business summary with your business plan. Talking to a bank and educating them is not so bad. I took a bank that was refusing to do loans into the ag industry and got a sizable loan approved in short order. The key is to be able to show you are educated and can invest wisely. Take your vacuum system for instance; the use of a $5K pump over a .5K pump is justifiable in some minds; but from an economics stand point, the use of a quality dairy pump at under $2/ day vs $35/ day; will get you approval. When it comes to investing, Farm Credit or banks like to see that a customer has crunched the numbers and is making sound expenditures. Be sure to show the high side off expense options production, and over head; and the reason you choose those used. Otherwise when they do their checking they will have questions that you will need to answer and explain your response; provided they don't just decline the request. The numbers are easy...if you are requesting a loan for equipment that exceeds the recoverable value of all the new items and the collateral by more than 2-3x, chances are slim. Also be sure to show the income that will be used to pay off the loan. I have a fair amount of experience in business plans so send a pm if you need assistance.

This is good advice though in my experience lenders aren't too interested in loaning money for used equipment. This is why it is important to determine how to best use the loan. High value items can be used a collateral, but a 500$ dairy pump off ebay won't cut it. Perhaps I am wrong and some lenders are ok with loaning for used equipment, but I haven't found any.

You could also make the case that using new equipment would look better to the bank as it has higher value and often will enable you to make more product.

[DrTimPerkins]

Do you have many laterals with more then 2-3 taps or are they all around 5.

The main bush has an average of 3 taps/lateral (this was how the dealers installed it....we didn't specify), all with dual-mainlines (4 sections). The other bush has an average of 4-5 taps/lateral, on single-pipe systems (26 total).

Our best year (the first year) was 0.73 gal/tap. Worst year (last year) was 0.46 gal/tap. Typically we stop when it turns buddy.

7929