27,500 Taps for lease

[OldManMaple]

Saw this in our local paper, could not find anything online or on their web page Hope you can enlarge to read.

Randolph NH Forest Commission is inviting proposals for tapping 723 acres 27,500 trees 12"+ / 41,000 trees 10"-12"
For info call Randolph town hall monday thru thursday between 8 and noon @603-466-5771
b
Bids close 08 28 15

http://randolphforest.org/


11880

[AdirondackSap]

I just dont see how you make money off of lease

[tuckermtn]

John from Scarinza's Sugarhouse (member on trader) should know quite a bit about this issue. he lives in Randolph and was part of the group that put together the awesome town forest...

[unc23win]

I just dont see how you make money off of lease Which party doesn't make money?

[n8hutch]

Unless you have family land Its a pretty easy argument to lease vs own the land.
Mortgage payments on that land if you payed 1,000,000.00$ for it. Which timberland in this area is easily worth 1200 to 1500$ an acre or more is about 65,000.00$ a year.
If you leased those taps, say 30,000.00@ 1.25$ per tap ,your lease would be 37,500.00$

So when calculating your operating cost for the year you would have 27,500.00$ in your pocket just by leasing vs purchasing the property.
Over the period of 30 years you would save 825,000.00$
Now I don't know about the different tax breaks leasing vs owning but I think this show that a lease should definitely be considered.

Weather or not you could make enough money for the investment you would have to make at 2.40-2.50$ a pound is the real question.

[sjdoyon]

I just dont see how you make money off of lease

As we usually say, it depends on your situation. Would not make sense from a start up operation angle but for a local existing operation that could handle the capacity (which is a totally different situation due to trucking, holding, RO and boiling capacity), with a long term lease, it's feasible to be profitable. Then throw in the price per pound you get for the syrup which is trending down, not up.
It's a big investment which will take a number of years to be profitable.

[Parker]

Wow,,,,,,people are paying 1.25 a tap and you have to set up the system? Where? With bulk prices on the way down you face a diminishing return on your investment imho..........this oppertunity might be perfectfor someone under the correct conditions,,but,,the devil is in the details.. l am looking forward to see how this plays out.

[maple flats]

I guess the local tap rate is a major factor. I have 2 leases and the taps cost me $.80 ea. One lease is 9 yrs old and the other is 5 yrs old. Yes, it was a big investment to get set up and I still have more to add at the second lease (but having lost my help, expansion will be limited at my age) but except for the travel factor I see a lease as the lowest cost/tap. My lease cost is less than what the taxes are on the properties. However, after tapping just leased trees the last 4 seasons, I have finally bought a vacuum pump, releaser and moisture trap for the trees around the sugarhouse which have not been tapped since I got my second lease. I also bought a gooseneck trailer so I can haul all my sap in 1 load.
The trees around my sugarhouse will give me about 160-165 taps on sugars and up to maybe 100 on reds. Now I've got to hold on for 10 yrs. until my 6 yr old grandson is old enough to drive and then I can only hope he is as eager to work with grandpa as his cousin was (until he got a real job his senior yr. in college).

[n8hutch]

Parker, I don't honestly know if anyone is paying 1.25 in N.H. I was trying to put something together with the White mtn national Forest out here in Chatham and In the discussions I had with them they were talking about 1.00$ a tap, I just used 1.25 as an average thinking the price per tap might go up to say 1.50$ over 30 years and then you would have an average.

I too am curious if anyone will even bid on it, I guess If you had the equipment to process that much sap you could throw a low number in.

[Parker]

The problem with throwing numbers around is that people come on this site and see.1.25 per tap and they think that is an average.....for example 4? Years ago when the ownership of a lot i tap changed the new owners came on this site and saw in franklin county v.t. 80 cents a tap was being paid by some,,they in turn said they thought 80 cents a tap was fair..........now i had the system in and more trees to tap,,the lot is 5 miles from the sugarhouse on great roads and great access,,so after a great deal of thought and with high bulk prices i swallowed a bitter pill and paid up,,,,,the reality of the situation is i am the only person in the area that could invest the time money and effort into this lot,,,,if i did not tap it who would (i would have taken the system if i had left)... now in frankiln county there is compitition for all availabel taps with many bids,,,not around here..........but was i willing to take my tubing and have him look for bidders? No.......
Now as for $1per tap on national forest land and that going up over time to $1.30..........why would tap prices go up if bulk prices go down? With the mass exspanstion of taps and subsudised super efficiant processing equipment available and a weak candian dollar over supply at a low price will be the issue. Imho
If you retail your syrup its great (and i think you could afford to pay nore per tap) because retail prices are not going down. But its hard for landowners to understand if they are paying 15 a quart (60 a gallon) for syrup at the store why would you the producer sell your syrup in a bbl. For 25 a gallon,,,i have often been asked whos making that $35 in the middle......ha ha
It all depends on the situation..........every situation is unique

[n8hutch]

I can tell you for certain in 1994 we paid 50 cents a tap for that same bush that I was trying to lease again at 1.00$ pwr tap, the tank would be 2000' from my house. So it certainly is feasible. But they "the Forest service" is cutting some of the wood this winter and I am going to look at it again in a year or 2 to see what they left. That being said, I think it's a safe bet that inflation will continue.

In reality you were making my argument that leasing vs owning the property could be the way to go. If the per tap price were to be lower than that's even less of a reason to buy the land.

I really only want to sell retail syrup. So I won't be going over 1,000 taps unless I fall & hit my head again.

I

[BreezyHill]

I know of a friend that is paid $1/ tap on 200 trees. The operator will only put one tap per tree no mater if it is 30" or 18". He does not always tap every tree each year either for some reason. When the lad owner looked at logging the none maples off the producer flipped and said he could not as it was not stated he could in the lease.

For land owners looking at prices they should realize that prices are different in many areas and that a maple lease is only part of the year usage of the land and will often not cover the tax burden assessed on the property. Removal of fire wood will supplement to make the difference in part.

For me personnaly I know of some properties close buy that I would like to purchase to expand our operation but they will also be used for other parts of our farm operation. If it were just for the bushes then I would lease. But I would be hard presses to pay less than $1.00 straight thru the lease. An increase at 3-5 yr with an adjustment due to bulk price & production annually; is more my line of thinking so that the land owner is tied into the profit of the season. This way I can over come the initial cost of the system and the land owner is tied into the production more directly.

Last season a producer was removed from a bush for cheating on his agreement with the land owner to pay on sugar content. The land owner started checking the sap and found discrepancies in sugar content and gallons picked up. Moral there is to adhere to the agreement one makes.

Make a deal you can live with for your situation. Keep the land owner in the loop and they will be more happy than one left in the dark.

[WMF]

In the last few years $1.75 to $2.00 per tap is common on the left side of New York State and money is still supposedly being made.

[Parker]

Wow!!!! That would definantly sink me........i have been retailing alot more.......but ,,,,,,wow!!!

[Mark-NH]

If it didn't sink you Parker, it sure would take the fun right out of it.

[Mark-NH]

Nate,

One thing your calculations don't take into account is value of the land if you purchase it.

[n8hutch]

Nate,

One thing your calculations don't take into account is value of the land if you purchase it. yes I did not account for the value of the land. I was just showing how you could show more profit on a year to year basis buy leasing, It also doesn't show any Taxes or potential write offs.
Every situation is different. You can make money leasing if the situation is right. You could certainly loose money too

[Parker]

Well, i lease all my taps and believe it is the way to go unless you have familey land. My point is that with rapidly changing markets one has to be careful about how much they pay per tap. If you pay $2per tap and it takes 3 taps to make a gallon and you get say $28 per galon you are left with $22 per gallon.....if it costs $15 per tap to set up the system and you have a ten year lease thats $4.50 per gallon giving you $17.50 a gallon........to maintain, tap truck run pumps process.....i realize there are great savings in high production capaicty,,,,but with falling bulk prices ($2lb this year?) Seems like its cutting pretty close......agine, just my opinion and im often way off the mark,,,,,,,,,,,,i commend anyone with balls enough to try to make their dream a reality....and as stated befor every situation is diffrent......

[Parker]

I went up mt.adams yesterdayvia the "air line" trail. I believe it across the road from this sugarwoods to be leased,, ,,some very nice maple along the trail in that area and looking across the valley looks like the sugarwoods has a nice slope to it. I wanted to check out the sugarwoods, but, no time...but real nice maple around

[Jebediah]

I spoke about a year ago with a guy from New England Forestry Foundation (they have some enormous properties), and he told me--totally informally--that they lease taps for price far below those described here, maybe worth being aware of, or checking for accuracy. Also notable that they encourage hunting and fishing on their land, they are sensible folks I think.

[802maple]

And that isn't even considering taxes on said property

Unless you have family land Its a pretty easy argument to lease vs own the land.
Mortgage payments on that land if you payed 1,000,000.00$ for it. Which timberland in this area is easily worth 1200 to 1500$ an acre or more is about 65,000.00$ a year.
If you leased those taps, say 30,000.00@ 1.25$ per tap ,your lease would be 37,500.00$

So when calculating your operating cost for the year you would have 27,500.00$ in your pocket just by leasing vs purchasing the property.
Over the period of 30 years you would save 825,000.00$
Now I don't know about the different tax breaks leasing vs owning but I think this show that a lease should definitely be considered.

Weather or not you could make enough money for the investment you would have to make at 2.40-2.50$ a pound is the real question.

[n8hutch]

In case anyone is still curious I understand that they received Multiple Bids for this lease. I guess they haven't decided yet who they are going to go with. Hopefully A local Sugar maker gets it.

[tuckermtn]

i would think Dave Fuller would be very interested...

[n8hutch]

I think Dave was one of the bidders, and A company from NY. Depending on how you read the original post it sounds like there could be potential for 65-70000 taps. That would be something.

[OldManMaple]

So our friend from Lancaster got the bid, even though the company from NY was willing to pre pay 5 years of rent

[n8hutch]

Hard to Find Fault with that. You know with Fuller's the Money will stay Local. They Run a Nice operation

[Mark-NH]

I wonder if the NY company was Crown Maple? They are trucking concentrated sap from Manchester VT to their processing facility 100 miles north of NYC.

[OldManMaple]

Here's your answer.....http://randolphforest.org/fullers-sugarhouse-is-successful-bidder-for-maple-tapping-lease/

[derekp]

Supposedly the 27,000ish number is just for current stocking as well, that number is expected to double within a short amount of time as trees grow into tapable diameters. Gunna be a big project!Glad they kept it local..I'm tapping right next door in Gorham with a .60 cent lease rate, which is 2 cents more than what Division of Forest and Lands told me their current lease rate is. They also said they are expecting the state rate to increase within the next few years.

[Mark-NH]

I am so happy to hear a local company got the lease. Congratulations to the Fullers. Nice job by the commission choosing the right option for the community. NH trees, NH people, NH jobs and NH syrup.

[optionguru]

I get my supplies up at Fullers. A great group of people and an area of the state that can really use the jobs.

[OldManMaple]

Here's an update on the RCF/Dave Fuller & Co..........http://randolphforest.org/fullers-has-13000-plus-taps-on-randolph-community-forest/

[Mark-NH]

So good to see a local guy, employing local people working this lease. Nice job by the lease holders not chasing promises of riches.

[VTnewguy]

Here's an update on the RCF/Dave Fuller & Co..........http://randolphforest.org/fullers-has-13000-plus-taps-on-randolph-community-forest/ Sounds like a great operation.