Buying sap

[batsofbedlam]

Has anyone used Mike Farrell's spreadsheet to price sap? My figure have me paying double what the Sap Prices listing in the Maple Digest shows.

[GeneralStark]

I am planning on using his spreadsheet this year. I have not seen the latest maple digest prices, but when I was selling sap I was never too impressed. I think basing sap prices on a percentage of bulk syrup price makes sense.

[unc23win]

I agree with GeneralStark having sold sap in the past I wasn't impressed either and I think the price should be related to bulk price. If the buyer has all of the means to necessary to make syrup efficiently then any sap they buy may not be as profitable if they pay more for it, but it is definitely less labor intensive and both parties will be happier.

[BreezyHill]

Having farmed all my life to one extent or another I can say even from an age of 10 when I sold my first steer and used that money towards buying my first Registered Angus Heifer. I was not satisfied one what I was paid for the steer and the heifer seemed high priced.

It is just part of the reality of farming. We never get enough when selling and it is always to much when buying. LOL!

you can always adjust the share for the sap producer and the buyer can make less if both parties would agree to that.

We will be buying in syrup and sap in 2015 at the rate we are growing now. I think that a person should look at rand's spread sheet to really get a good grasp on what the replacement costs of an operation are, any one always needs to figure in the taxes paid on you property and sugar house. I know our taxes don't seem to be going down at all.

Both parties need to make something or the agreement will not last.

[DrTimPerkins]

Both parties need to make something or the agreement will not last.

That's the bottom line (both literally and figuratively) right there.

Any sort of pricing arrangement will be determined by some degree to how much of a market there is for the sap and how far you need to go to reach that market. If you have few buyers around, the price might be lower. If the market is more competitive, and especially if there is a larger producer in the area who is set up to accept sap deliveries simply, then the price can be higher. Sap sellers also help themselves by delivering fresh, high-quality sap to the buyer. A load of crappy sap will not only make poor syrup from that sap, but can negatively impact the entire days production (or more) for the buyer.

[GeneralStark]

That's all well and good but the topic of the thread is pretty specific. Here is an article written by Mike Farrell on the subject: http://maple.dnr.cornell.edu/SapBuying2010_files/ShouldYouBuySap.pdf

In the text there is a link to the spreadsheet the OP is referring to. There are several speadsheets included in the package.

The "sample" and "blank" spreadsheets enable the producer to change several variables including price of bulk syrup and percentage of bulk price paid to the sap seller. The percentage of bulk price would be determined by the producer depending upon their costs and potential revenue.

Perhaps we can keep it on topic. Rand's spreadsheet is helpful but not really related.

[unc23win]

Thanks General for providing the other links I was looking for after your first post today. I have them somewhere from before. Anyhow for me the one with the wages really nails it on how a producer can be fair to the sap seller and still make a GOOD profit depending on efficiency. Just messing around with the numbers you can easily see the potential profit. I use to sell mine to a guy who burned Natural Gas man did he make out good on the deal, but with todays high efficiency (fuel prices dropping I paid $2.64 the other day awesome) there is room for profit with any fuel. To me its all very interesting and it definitely might be variable by the region you are in to an extent, however it is worth noting that the bulk price is relatively the same.

[BreezyHill]

Perhaps we can keep it on topic. Rand's spreadsheet is helpful but not really related.

The relation is simple...there may be a reason for a person to feel that the price is unfair. Thus one should know the full costs involved in the operation of producing sap to realize the break even point of a sap harvesting operation and the same for a boiling operation. Rand's spread sheet helps one to realize these costs.

If you read Mike's comments on the spread sheets you will find that you can adjust the % of syrup retention for the boiling operation to reflect an agreement other than 50:50.

Understanding and figuring in, all the cost of an operation, makes one better suited to understand if a price is: realistic, below break even or you can profit on your investment.

Further more Rand goes on to show the life expectancy of equipment that is often not factored in. When we spend $10 to install a new tap on a mainline system we often don't figure in, that much of the expense, will last for 10-20 years. When this is shared with a sap producer a buyer can better show reason for the price offered.

[bowtie]

I realize this off topic but the bottom line is, it like most other commodities, is a supply and demand ratio. You can say that your sap is worth what every you want but the market dictates the price, regardless of what you think you should get paid for it and the costs involved. Remember there is always someone out there that will bring a product to a market, if there is a demand. Regardless of how much a person has into their sap collection process the act of turning that raw product into syrup and bringing it to market is more costly. Sap collection is the grunt or laborer work while the syrup making is the skilled or craftsmen work. I say this not offend anyone but the facts are the facts.

[southfork]

Agree with bowtie!

[tuckermtn]

I have used the cornell spreadsheet for the last two years, and will use it again this upcoming season. We bought about 8000 gals. of sap with it in 2013 and 20,000+ gallons of sap with it in 2014.

it is transparent and the options to adjust for changes in the bulk market is a plus for me.

the one tweak this year is that we are going to use the same bulk prices from last year because my seller is worried that with a good season, the bulk price is going to decline this season. we agreed to this.

the macros involved in the cornell spreadsheet means that most every possible option i.e. value of sap per gallon, value of entire load, value of syrup produced (bulk), is produced in one easy to read spreadsheet.

5 stars in my book...

[GeneralStark]

I also like how different variables can easily be adjusted.

Eric - What have you been using for bulk prices, and what percentage of bulk price have you been using?

[unc23win]

Thanks Eric for sharing I like hearing how you used the spreadsheet.

[tuckermtn]

Stark- i use the 50% that is the default on the spreadsheet.

I used the Bascoms buy price, starting at 2.80, down to 2.00 a lb for C.

[GeneralStark]

Thanks Eric! I'm not sure yet if I will use 40 or 50% of bulk. Will depend on a few factors. Just curious why you are using 2.80 for bulk light. According the the bulk price thread Bascom is paying 2.60 for light down to 2.00 for commercial.

[batsofbedlam]

Re-reading Mike Farrell's chapter on selling and buying sap and playing with the spread sheet has cleared up all of my concerns and thanks for all of the input form you all. He has done the industry a great favor in putting this all together.
I suspect bulk prices will not vary much from last year.

[unc23win]

Just curious why you are using 2.80 for bulk light.

I was wondering the same thing.

[maple flats]

There is currently a surplus in storage of syrup, unless we have a short year the prices will likely slip some from current levels. Another factor likely holding prices down is the Federation price setting and the exchange rate.

[BreezyHill]

Flats is right, there will likely be a bear loose in the maple pricing in a couple of weeks for this seasons pricing and if expansion continues at the same pace you will see large producers scale back production if they are selling in bulk

A close eye on costs and break even point will keep producers in the black on the ledgers.

Seems so odd that maple producers are having the same market challenges as dairy farmers.

[tuckermtn]

the $2.80 for light was what we used last season, based on their pricing at the beginning of the 2014 season.

[Rand]

That's all well and good but the topic of the thread is pretty specific. Here is an article written by Mike Farrell on the subject: http://maple.dnr.cornell.edu/SapBuying2010_files/ShouldYouBuySap.pdf

In the text there is a link to the spreadsheet the OP is referring to. There are several spreadsheets included in the package.

The "sample" and "blank" spreadsheets enable the producer to change several variables including price of bulk syrup and percentage of bulk price paid to the sap seller. The percentage of bulk price would be determined by the producer depending upon their costs and potential revenue.

Perhaps we can keep it on topic. Rand's spreadsheet is helpful but not really related.

Agreed. The sap buying worksheet from Cornell looks pretty useful. The only applicability of the spreadsheet I developed in this context would be if you were evaluating buying new equipment to allow more/faster sap processing. Even then, my spreadsheet would have to be modified to allow for sap purchase, which wouldn't be too difficult to do.

Rand

[wiam]

There is currently a surplus in storage of syrup, unless we have a short year the prices will likely slip some from current levels. Another factor likely holding prices down is the Federation price setting and the exchange rate.

Head of production for Maple Grove spoke at our county meeting last night. He said there was basically no surplus syrup in the states and they expect to be paying in the $2.45-$2.50 range depending on exchange rate.

[DrTimPerkins]

He said there was basically no surplus syrup in the states and they expect to be paying ....

This is what I have heard as well. The price paid will basically be the Federation price with the exchange factored in, plus any premiums (organic, large bulk producer, etc.). For areas further away from the packers, prices might be a bit lower (as usual) due to transportation costs. Apparently syrup sales are fairly strong.

[unc23win]

Head of production for Maple Grove spoke at our county meeting last night. He said there was basically no surplus syrup in the states and they expect to be paying in the $2.45-$2.50 range depending on exchange rate.

That's pretty much goes with what Bruce Bascom said (he said it would be strong, but slightly lower) which would be 2.45-$2.50 in his letter in the new catalog. In my opinion still plenty of room for both parties (buyer and seller) to make money.

[Moser's Maple]

There is currently a surplus in storage of syrup, unless we have a short year the prices will likely slip some from current levels. Another factor likely holding prices down is the Federation price setting and the exchange rate.
Yeah that 65 million the federation is sitting on when the ideal carry over is 40 million could play a factor in price

[SWEETER CREATIONS]

according to " farming " magazine I thought I read 83 million pounds ?

[DrTimPerkins]

Yeah that 65 million the federation is sitting on when the ideal carry over is 40 million could play a factor in price

Probably not as much as you think. About 20%+ of that syrup (~13M lbs) has flavor defects of some sort, and is therefore good only for certain purposes, thus the actual surplus amount is somewhat lower. The 40 M lbs is a target value. Sometimes it will be more, sometimes it will be less. In addition, some of that surplus may be over-quota syrup, for which the producer is not paid until it sells. Quebec had two very large crops back-to-back (2013 and 2014). Probably what happens this year will be more important that what has happened before now.


That's pretty much goes with what Bruce Bascom said (he said it would be strong, but slightly lower) which would be 2.45-$2.50 in his letter in the new catalog. In my opinion still plenty of room for both parties (buyer and seller) to make money.

Yes, Bruce was quite (uncharacteristically) bullish in what he had to say in the presentation at Verona last week.

[markcasper]

If there is anything more than an average crop, I think anything grade A is going to be down around $2.00 and very likely below. One US dollar is equal to $1.20 for one Canadian and that will no doubt push this price down if that trend continues. A year ago the exchange rate was closer to even, .20 on the dollar is a big deal and a big change from last year.

[GeneralStark]

Agreed. The sap buying worksheet from Cornell looks pretty useful. The only applicability of the spreadsheet I developed in this context would be if you were evaluating buying new equipment to allow more/faster sap processing. Even then, my spreadsheet would have to be modified to allow for sap purchase, which wouldn't be too difficult to do.

Rand

Just to be clear, I think your spreadsheet is interesting and useful and a valuable tool. The original question in the thread was related to the sap buying spreadsheet, so I thought it useful to keep the discussion related to that.

[GeneralStark]

If there is anything more than an average crop, I think anything grade A is going to be down around $2.00 and very likely below. One US dollar is equal to $1.20 for one Canadian and that will no doubt push this price down if that trend continues. A year ago the exchange rate was closer to even, .20 on the dollar is a big deal and a big change from last year.

Perhaps we should start a thread related to bulk prices in 2015. Done.

[GeneralStark]

I did start a new thread on bulk pricing. For those of us hoping to use Mike Farrell's sap buying spreadsheet, it would be great to keep this thread related to that. I suspect bulk price will be an active topic.

[highlandcattle]

Ok,well I'm confused. What should pricing be for sap this year? Does it go by sugar content? This will be a year we may be selling sap ,so all new to us. Thanks

[tuckermtn]

download and open the Cornell spreadsheet. it asks for bulk syrup pricing. enter those prices. then determine what percentage is fair. we use 50%. then sell/buy sap based on volume and sugar content. pretty easy to use spreadsheet.

[unc23win]

Ok,well I'm confused. What should pricing be for sap this year? Does it go by sugar content? This will be a year we may be selling sap ,so all new to us. Thanks

Yes by sugar content using the Cornell Spreadsheet for 2015 sap prices in the Maple Syrup Almanac and available online. I can e-mail you one if you need it. Anyhow using the spreadsheet you can choose a bulk price to use for buying sap, and then it lists sap prices by sugar content. The bulk price is not actual bulk price it is merely what you are willing to sell or buy sap for.

[GeneralStark]

Ok,well I'm confused. What should pricing be for sap this year? Does it go by sugar content? This will be a year we may be selling sap ,so all new to us. Thanks

Well if you are selling then you may not have much ability to set the price. It will depend on the buyer's equipment and how competitive sap selling is in your region. Generally the value of sap is based on sugar content. Here are the 2009 maple digest prices. I couldn't find anything cheaper with a quick search.

http://www.wismaple.org/sap_guide.htm

Here is another online calculator that appears to use a similar metric as Mike Farrell's spreadsheet being discussed in this thread.

http://www.ohiomaple.org/sap-app.html

This system is based on sugar content and the bulk price of the syrup produced. The big question is what percentage of the bulk syrup value will the seller and buyer agree to.

If I were you I would advocate for using the Cornell (Mike Farrell) system.

[Jmsmithy]

I'll be looking to buy sap in the Herkimer County NY region (within hour or so). I want to buy the sap outright, with no syrup split as my syrup all sold out of state. I need more property, which we'll be shopping for after this season hence the need to buy sap. Given that, I'm sure I'll pay a bit more than I would with a syrup split.

Is the syrup split the norm? How much more would one expect to pay for sap with no syrup split?

[maple flats]

For charts on sap pricing you have at least 2, The Maple Digest and The Maple News, Maple Syrup Almanac both publish a sap price chart. I think they are both based on 50% to seller. If you want to use any other rate, you need to use Mike Ferrel's formula, available thru Cornell Maple and likely others.