Taps, labor, and product mix

I am interested to get a better understanding of what people are doing in terms of hired labor and how product is sold (sap v. bulk v. wholesale v. retail) at operations of different scales. My purpose is to get a better understanding of actual experience as I work on a business plan. If you are interested in sharing info, it would be great to know:

# of taps
Amount of annual labor (e.g., me and my brother and we hire one person for about 6 weeks)
How much (gals or %) you sold as sap, bulk, wholesale, retail, other (sugar, creme, etc)

Thanks so much.

Rand

best to look back a few years ago in our operation, as things like labor and taps were "cleaner" then. We buy sap now, and I am now disabled.

2011 - 1150 taps, 519 gallons produced (exceptional year for us)
Three workers, pretty much full time, 8-9 week season. (we truck all our sap, so quite labor intensive)
25% sold as bulk, 15% wholesale, 60% retail.

2012- 1350 taps, 270 gal produced.
same three workers
10% bulk, 20% wholesale, 70% retail.

no cream/candy until 2013.

I suspect selling a high percentage of syrup at retail would be harder in Vt. Where I am in NH there are fewer sugarhouses, so less competition. If you believe USDA ag statistics, over 50% of the syrup sold in NH is at retail.

Thanks Eric. This is helpful for me to inform my thinking.

Spud, I got your PM and tried to reply to it but the send failed,saying that you have no room left for Private messages and need to clear some space. I will try to resend later.

It is interesting for me to see the percentages on the sales. As far as labor goes, I do all of the woods work myself, my brother in law does 80% of the boiling (Free except for syrup)

2011 987 taps 470 gal syrup Retail 33% Wholesale 33% Bulk 34%

2012 935 taps 217 gal syrup Retail 35% Wholesale 39% Bulk 26%

2103 984 taps 508 gal syrup Retail 22% Wholesale 26% Bulk 52%

2014 3,040 taps 1,076 gal syrup Retail 10% Wholesale 17% Bulk 73% plus 38 hours of paid labor at sugar house by high school student

I put in a lot more hours hauling sap 4 1/2 miles from new sugarbush

And unfortunately, the percentage for the bulk sales go way up. The dollar volume for the retail sales in similar, just a lower percentage.

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Originally Posted by JoeJ

It is interesting for me to see the percentages on the sales. As far as labor goes, I do all of the woods work myself, my brother in law does 80% of the boiling (Free except for syrup)

2011 987 taps 470 gal syrup Retail 33% Wholesale 33% Bulk 34%

2012 935 taps 217 gal syrup Retail 35% Wholesale 39% Bulk 26%

2103 984 taps 508 gal syrup Retail 22% Wholesale 26% Bulk 52%

2014 3,040 taps 1,076 gal syrup Retail 10% Wholesale 17% Bulk 73% plus 38 hours of paid labor at sugar house by high school student

I put in a lot more hours hauling sap 4 1/2 miles from new sugarbush

And unfortunately, the percentage for the bulk sales go way up. The dollar volume for the retail sales in similar, just a lower percentage.

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Thanks Joe. Helpful info. How is the market for bulk in your area? Sufficient to accommodate your added capacity? Or approaching saturation?

The bulk market is OK as far as accepting syrup, just the price is receding.

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Originally Posted by JoeJ

The bulk market is OK as far as accepting syrup, just the price is receding.

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The syrup bulk price is falling, primarily not due to the excess production of syrup, but rather to a falling Canadian to U.S. dollar exchange rate. The Canadian $ currently is worth about $0.86 U.S.

Attachment 10171

Dr. Tim, is that backwards. Doesn't that mean that .86 US is worth 1 Canadian dollar?

Right 1 Canadian Dollar is .86 US right now.

The area I live In has a highly developed downtown area with many outlet malls & shopping, my wife is a 3rd grade teacher and she works part time in a gift shop in town, anyway last few years there was always bus loads of folks from Quebec & Ontario and there license plates everywhere , but with the Dollar sliding the other way again, the last 6+ months or so seems like there are a lot more Massachusetts & Connecticut plates again. Either way town is busy, but I guess its not so good for the Bulk syrup price. I wonder where the line is as far as large producers selling bulk & still being profitable? I'm sure it depends on each individuals situation but there has to be a ball park # where it might not be worth the effort to make say 5,000 gallons of syrup to make 20,000 in profit.

I was talking with the owner at bascoms last weekend and he has enough product to last til June. The amount of syrup on the market is abundant. The market is changing rapidly and many bulk producers will be scaling back soon as the break even point will be passed as prices drop.

Now more than ever it is imperative that producers use spreadsheets like Rand's.

Those that are in this for profit will need to analyze their operations to keep above the red ink line.

Another good season will damage the market for some time; while a poor season, will be good for the market; but will damage many producers that are leveraged.

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Originally Posted by BreezyHill

I was talking with the owner at bascoms last weekend and he has enough product to last til June.

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That's not surprising since they buy most of their syrup in late April and into May maybe even June for more northern folks. If I am not mistaken they were still buying in the fall and bought C grade just the other day. So if they have enough to go until June then they have approximately 1 months worth extra which is about 8%. Most producers of crops would plan to have 10-20% more than what they figure they need.

Quote:

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Originally Posted by BreezyHill

Another good season will damage the market for some time; while a poor season, will be good for the market; but will damage many producers that are leveraged.

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I'm not so sure about this. Supply and demand is already totally out of whack in the maple industry due to the Federation's policy of maintaining the Maple Syrup Strategic Reserve. Now I'm not saying that the reserve is entirely a bad thing, as it has led to reasonably high and stable prices, however it doesn't allow the normal supply-demand economics to work, on either side of the border. The question is how long the Federation will continue to buy syrup (or more correctly, how long the producers will pay the Federation to store their syrup in warehouses without their being paid for it). There are relatively few options (re-institute the quota, drop the price of syrup, sell off a bunch of syrup at a highly reduced price) -- none of them are especially good. Right now the packers have the best of both worlds. There is plenty of syrup in the U.S. for them to buy, and there is plenty in Canada just in case. The prices are stable and known, so it is largely a matter of efficiency for them, as well as keeping track of the currency exchange rate. Again, this isn't a hit on the packers at all, they are as vital to the maple industry as the producers are, but right now they (and U.S. producers) have it pretty sweet (pun intended).

What is really affecting the price of syrup in the U.S. currently is NOT the supply (at least for those producers reasonably close to the eastern packing facilities), but is the U.S. to Canadian currency exchange rate. The Canadian $ has fallen to about $0.86 U.S., which means that with syrup at C$2.90, U.S. producers only get paid U.S.$2.49 for that same lb of syrup. That drop in price has NOTHING to do with supply at all.

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Those that are in this for profit will need to analyze their operations to keep above the red ink line.

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Completely agreed. Whether the price of syrup falls due to the exchange rate or to oversupply, the overall result is that the profit margin on bulk syrup for U.S. producers is lower, and those that are most efficient (and/or least leveraged) will succeed.

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Originally Posted by optionguru

Dr. Tim, is that backwards. Doesn't that mean that .86 US is worth 1 Canadian dollar?

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Yes, you are correct....it is reversed. Thanks for catching that error. I've corrected it in the initial post.

we are pretty close to selling out for this year, so I have our sales % breakdown for 2014.

777 gal produced (with a lot of purchased sap), plus 80 gallons of bulk purchased.

265 gal. (31%) sold as bulk
130 gal. (15%) sold wholesale
412 gal (48%) sold as retail
50 gal (6%) donated to fundraisers (ALS associations, snowmobile club, public TV auction)

just about inline with the NH state average for % of retail sales.

About 1000 taps
Me, myself, and I.
About 200 gallons this year, 100% sold at retail(85% syrup, 15% cream, sugar, candy)
Down to final 10 gallons so we will buy bulk to fill orders until season starts in April.