Maple as a commodity?

[DaveB]

With the record high prices of syrup this year, has anyone thought what would happen if maple syrup was traded as a commodity like orange juice, coffee and any innumerable other products traded in Chicago and New York? It already kind of is as bulk buyers in different places offer different prices and sellers agree on a price, but we could have a commodity that is traded by others based on market factors and they could make (or lose) money as well.

I don't know where I stand, but I can see the pros and cons and wondered what others thought. I mean, what makes our agricultural product any different than others?

Dave

[markcasper]

I have traded commodities before and have the thought the same thing. The problem with syrup is that its not that large of a commodity. I traded milk one time just after the exchange started trading it. There was barley any volume being traded, which made it a hard one to call. There still is not much volume in some of the agricultural commodities. I am sure there will be some more insight into your question.

[sapman]

I feel the same way about syrup being not enough volume to be a safe trade, for a speculator anyway. Without liquidity, no one would touch it. It is an interesting thought, though. If it happened, the government would probably want to get involved, which can't be a good thing.

Tim

[gmcooper]

Interesting topic. I can see both side of the issue but my thought is that with most ag commodities the actual producer often gets the short end of the stick. Look at the money Hillery Clinton made trading beef while most of us beef producers were losing money big time. I believe that the actual price of syrup would be controlled by people who have absolutly nothing to do with maple. Thankfully maple is not a large enough commodity to even be considered. JMHO
Mark
Remember with any commodity when some one makes money some else lost an equal amount.

[sapman]

While I can understand what you're saying about who would be controlling the price, and it may be true in a thinly traded commodity like syrup, in most markets speculators are usually just along for the ride. The commercials, or industrial users and those hedging into positions, are the ones who are the price movers. They buy and sell hundreds or thousands of contracts at a time. At least this is what I was told when I used to keep track of the markets. But again, I'm in agreement that syrup is way too small to be considered.

All the best,
Tim

[markcasper]

The commodities trading was designed to balance the risk between buyer and seller. If the farmer sells 40,000 lbs. live cattle contract today at $.90/lb and then a week later the price goes to $1.10/lb, the farmer still made .90, and the speculater that bought the contract makes the extra if he gets out of the contract. They call it "risk management". The price could have went the other way, down, the farmer would be smelling like a rose, but the speculator would have lost his a%%, or at least gotten stopped out with a loss. The same goes for an ened user of a certain commodity.

This is the way its suppossed to work. Today however, with all of the corruption fraud going on and the goverment seemingly coming up with different data and numbers, its hard to get a hold on how these markets operate.
There is compelling eveidence that suggests the goverment manipulates and distorts all kinds of information which has a direct impact on how these markets move. There is tons of fund money in the commodites nowdays, so its hard to get a true picture of what the actual price should be. All I know, when they decide to get out of a certain commodity b/c of whatever reason, the money flows out much faster than it came in.

[Maple Hill Sugarhouse]

So what is the Federation in Quebec?? Got the bull by the honkers/yup they sure do.

US Maple Syrup Packers were used to buying all that $1.75 a Lb syrup and now there at $3.25 a Lb a few years later after the start up of the Federation. Looks like the packers are going to be getting a lot lighter in the pockets nowadays?.

[brookledge]

I'm happy the way it is. I set my own retail and if I want to make more than I need for my retail then I have to be ok with the wholesale prices. I'd just hate to see wholesale prices in the US like the dairy prices are. For the most part dairy is only a wholesale market and doesn't always favor the farmer.
I know commodities are different way of selling and I don't think there is enough volume to do it.
Another thing with syrup is it has a long shelf life if properly packed. There is nothing stopping me from sitting on it for a few years and then selling it. Where as milk where it has to go from the cow to consumer in about a week or so unless it is made into other products but even as cheese it won't last as long as syrup.
So a dairy farmer either has to take the price that is set or dump it on the ground. Even most vegtable or grain farmer have to move the product relitively soon after it is harvested
Keith