Lease Agreement

[Amber Gold]

What are people using for lease agreements? I found one that Vermont uses and there's one in the Producers manual which is the same thing. Are there other forms that are in use?

Thanks

[tuckermtn]

that is what I've been using, with a few minor tweeks...

-Eric

[220 maple]

Lease Agreement,
I asked my favorite attorney about my lease and he told me it was just like a rental lease and did not need to be recorded in the court records. He said as long as both parties were in agreement and both had signed the lease then everything is ok. I'm sure my lease is different than any other maple lease. I have a five year lease with the option to renew yearly after the five year period. My lease made the landowners smile this past season and I hope the next four years I can put a bigger smile on their face. The reason being is I pay them on the shares, This season their share was 45 gallons of syrup that was sold wholesale when I sold my wholesale syrup. They kept a gallon for themselves, they were allowed by the lease to keep all of their share if they wanted. After we sold our syrup I presented them with a check over $1300 dollars. I had 864 taps this season on their property, If it would have made more syrup I would gladly paid them more. They understand I don't control the wholesale price of syrup. They also understand that if I lose they lose. The first year they won, and I won too. I feel if you keep the landowners informed they will trust you with their trees. My lease requires me to show them anytime during the season the amount of water that their trees have produced. Keep them involved as much as possible. After they discovered this season what detailed records are being kept on sap gathering they felt at ease they would be paid fairly.

Mark 220 Maple

[Amber Gold]

I did see the Vermont agreement required that it be filed with the town clerk. I wasn't sure if that was necessary or not.

How does your share system work?

[jgrenier]

I would also be interested in hearing more details about your lease agreement. Such as the agreed percentage of syrup and if the lines are yours or the landowners THANKS

[lew]

220,

I am interested in how your share system is set up. at the amount you paid them this year, it works out to $1.50 per tap. That's extremely high for our area. I understand keeping landowners happy, I have rented woods for over 20 years. But you have to make enough money to not only cover your current expenses but also the replacement cost of equipment, taxes, LOSSES FROM PREVIOUS YEARS, etc. In a good year, this sounds great to share the wealth. But when a bad year comes, no one is there to share in the loss but you. Just my 2 cents, but i am interested in how your share system works.

[maple flats]

More power to you if you are happy paying $1.50 a tap. I don't see any profit if you pay that. I paid $.50 this year and the landowner thought I was paying too much. They also said the same last year. I pay it first in syrup at retail and after they have as much syrup as they think they want, I pay the bal by check. Every landowner I ever leased from was paid that way (syrup then check, not always $.50/tap) and I never had an unsatisfied landowner. The only landowners I no longer tap were dropped by my choice, as I found bigger and/or closer bushes. I set the price too, not them but I try to keep it fair for both. My formula is take the gal price I will be selling syrup for and devide by 100 and round to nearest .05. This year I sold gal at $52 average, ($54 grade A and $50 for B) I averaged 52/100 rounded =$.50. Next season if the 2 grades average from $53-57 I'll pay $.55 and so forth. This has worked since 04 when I first leased any trees. I have never based price paid on actual syrup produced. I have done the same damage to the tree if I have a real bad year or a record high.

[220 maple]

Every six gallons of syrup I get 5 they get 1. I sell their share wholesale. I sell wholesale to the same person every year. He always pays me 5 cent more on the pound because I deliver it to him. What ever the set price is each year is determined by what he has to pay per pound for syrup, last year he bought over 100,000 dollars worth of syrup. I don't have to sell any of my share wholesale, I only need to pay them the wholesale price of syrup. I could keep their share amd sell it retail it I needed. I paid them 1.50 per tap, if their trees would have produced more I would have been happy to pay them 2.50 per tap or more. I paid them over 1300 dollars my share is 5 times that number wholesale 6500 dollars. Making syrup is my hobby, I have a real job printing books for the world largest printing company.

Mark 220 Maple

[Thompson's Tree Farm]

Mark,
No disrespect intended, but maple is not my hobby, it is my "real" job. I have been a farmer all my life and have had to live in a market economy where I have to compete with others. I have had competition from others who saw having a loss on their farming operations as a tax advantage. I know a person who uses his company labor force to fix his fences and do maintainance in his sugar bush. He routinely prices his syrup well under local market prices. He enjoys his hobby and fully understands all the headaches and labor involved and I am glad for that. Unfortunately, his willingness to "break even" on his syrup makes my ability to make a living more difficult. In his "real" job, he would not dream of only breaking even. I don't disagree with your lease payment method and having it linked to prices each year makes a lot of sense. If I remember correctly, this bush has the possibility of a large expansion and abuts your own so I am thinking that what you paid may not be too out of line.
I don't mean to rant and I hope I am not opening a can of worms here but when hobby producers give away or severely undercut market prices with their "excess" production (be it vegetables, meat,hay,syrup, firewood or whatever) it can and does influence the ability of those who are dependent on producing those items to make a living. Influencing the cost of inputs can have the same results.
Doug

[220 maple]

Doug,
I understand were you are coming from. I have know of and seen many a Doctor with a farm, they are not good for the guy that is a true farmer. As far as the price of the syrup that I sell I feel I'm not to far below market value. Gallons 42, 1/2 gallon 22, quart 12, pint 7, 1/2 pint 4. I have seen and heard of other producers in my area charging a lot more for their product. One producer has their syrup in a local tourist trap at 74 dollars a gallon. I understand they have a mark-up, but mine after the mark-up at the tourist trap I supply is 52 dollars a gallon. Your are correct the bush I leased is beside my land that I tap. I probably can add another 400 plus taps on their land. The other advantage is they have electric on there land and I can run a vacuum line to my hollow and vac. my trees that have always been on gravity. The potential increase from vacuum of my trees maybe unmanagable.

MArk 220 Maple

[Amber Gold]

In my area, building lots go for ~$60k and large tracts of open land aren't very common. At $0.50 per tap, I don't know if that'd be enough money for a property owner to deal with having someone else on their property. Also large stands of maples that justify tubing aren't common.

If the property owner was to selectively harvest the wood off his lot every 10-20 years, wouldn't that be worth more to him than getting a yearly check at $0.50/tap?

Even though it cuts into your profits, you also need to make it worthwhile for the property owner, I think more so in my area than in others...say upstate NY or northern VT.

I'm still in talks with the property owner(s) and I don't know what rate will be agreed on. I emailed the owner of the sugar maple orchard the lease agreement and told him to take a look at it and we can go from there.

[220 maple]

Lease Agreement
Even though their land was already farm exempt, taxes cut 75%. I helped them meet the gross annual income. They usually get farm exemption by selling hay. This years hay crop might not have covered the amount but their sugar trees saved them. My lease allowed me to build a modern tubing system. I turned their woods awful blue. Before I put any lines in last fall I decided to put some black main lines near their tree stands, I didn't have to but did it as a good will thing. I don't think it hurt my production. I would have perfered blue but black keeps the landlord happy.

Mark 220 Maple

[maple flats]

My lease also helps the land owner qualify for Ag exemption because he can use my sales. That tax savings becomes a big figure for the land owner. I encouraged them to apply and between another farmer who rents hay fields and my tap rent he now gets the exemption.

[WESTVIRGINIAMAPLER]

Main thing is do what works best for both parties involved. Some of my bushes I tap, they may get $ 1.00 per tap or more in free syrup basing it on what I retail all my syrup for and the syrup is bottled in quart jugs for the owners. I am happy and they are happy and that is what matters.

I am like Mark in that if I didn't have any trees, I couldn't make any syrup as I don't own any trees of my own, so I try to keep the landowners happy. Overall, I average about 50 to 60 cents per tap in free syrup vs retail price of syrup.

[halfast tapper]

The state of vermont opened up state land for leasing last year. Their formula for figuring price per tap is as follows: They take the market price per pound for commercial syrup and the market price per pound for fancy, take the average of the two prices ,now subtract 25percent. The amount that is subtracted is the price per tap for that year.

example
commercial 2.20 per pound
fancy 2.90 per pound

2.20+2.90= 5.10
5.10 divided by 2 = 2.55
2.55 minus 25 percent=0.6375 rounded up .64

So the cost per tap is 64 cents per tap. This way when market drops so does your cost per tap.

hope this helps.

[maple flats]

It looks like you are mulitplying by 25% and not deviding by 25%. That price is real close to but slightly over what I pay. It does sound like a realistic price. At what point are the market prices set and whose price is official?

[maple flats]

I think I may start to use that formula on my own. Thinking I will go with Bascom's price as of his open house in May to establish the season's rate for the season just ended each year. It is straight forward. Market price average between light amber and commercial divided by 4 (same as times 25%).

[maple flats]

You might note, the price has no relationship to how much syrup you made, just a per tap price. This is as I think it should be. We may suffer poor seasons and sometimes experience great seasons but the price remains a per tap price. From there it is up to the producer to maximise the syrup per tap by doing everything in their control to get as much syrup as possible to keep their profitability higher.

[Amber Gold]

I agree, the landowner should be paid on a per tap basis. Every year the trees still experiance the same wound and they still have to deal with the tubing being left up year round. It's up to the producer to maximize production.

What about paying a different amount for gravity and vacuum setups? Just wondering if there's a situation where a property owner doesn't want vacuum on his trees, or if their isn't enough trees to justify vacuum. Wondering why the producer should pay the same for each setup when vacuum will vastly outproduce gravity.

[maple flats]

I think it should pay the same unless you are creating noise or using their power. Same reason, the effect on the tree is the same if you have vac or gravity.

[brookledge]

I know some pay more when they have vac. but I pay .50 per tap with either syrup or money. And I have vac.
Keith