Quebec production 2013

[Randy Brutkoski]

Good question spud. I could never really understand how they did that. Hopefully the almighty Cboyer can explain without shoving the Canadian flag down our throats.

[CBOYER]

A few weeks ago you made a comment about someone from Quebec selling their syrup on Craigslist. You said that was wrong and I said let him do whatever he wants with his syrup. You told me to respect the Quebec laws. Here your saying a person with 800-2000 taps can just sell their syrup at the farm. Is there a certain tap amount one can have or a certain syrup amount one can make without being a part of the Federation? Does a person have to belong to the federation or can they just branch out on their own? How much do you sell syrup for at the farm?

Spud

No theres no minimum or maximum taps to be under FPAQ. The base rule is if you want to sell bulk (container over 5 litres), or to sell elsewhere than at the farm, you need by law to have a quota from the FPAQ and in recent years, no new quotas ares avalaible; i read somewhere that they are at least 1200 producers on the waiting list for new quotas. having more than 2000 taps and selling only at the farm is very difficult, since youre not alone in this situation, and even those with quotas sells at their places.
Just here in Milan (350 peoples +/-), we have Lapierre sugar bush 145,000 taps, 2 others at or near 100,000 taps, and many from 20, 000 to 40,000 taps. theres a lot more maple tree than people in my area.
I tap for hobby only, i could tap 1000-1500 on my lot, but i will stay with my syrup...

In the example you refer, the producer want to sell syrup from QC to Usa; it is not a "farm" sale it is exportation, an this is regulated.

FPAQ is at first a farmer syndicate, that vote and ask for rules, and Government put laws for them. They give some "power" to FPAQ to applied thoses laws. FPAQ operations is entierly paid by producers.

Maple Syrup is mainly sell in 540 ml cans, 8 cans for a gallon and prices around here are $45 to $65. Most syrup sales are extra light, light and medium (all grade A for Usa grade)

[spud]

That is way too much government control for me. How long have the 1200 people been on the waiting list? I assume they are already sugaring and just want to add more taps. It appears that some are making a lot of money yet preventing others from doing the same. Why does Mr. Lapierre get 140,000 taps and Joe Blow down the road gets only 10,000 taps? Is it based on the amount of land you own?

Spud

[Flat Lander Sugaring]

ok Boyer I have the answer for you. Just like mexicans and the southern border, make a stainless(extra gas tank) paint it black fill it up with your syrup and drive down to highland. just saying

[Amber Gold]

The ribbing aside, this has been an informative thread. I always wondered how the federation worked and the numbers are interesting.

Overall, I think the federation's a good thing. If I understand things correctly, the market's stabilized considerably since the federation was incorporated...everyone benefits. Please correct me if I'm wrong. How's the federation socialist when it's run, and paid for, by the producers? The government enforces the rules the federation has, correct? I could see an issue where once you're in, you're one of the good ole boys. If there's a 1200 producer waiting list, it can't be all bad. Didn't the big producers get that big by buying up quotas from smaller producers? Really no different than the big farmers in the US buying up all the small farms.

[happy thoughts]

The ribbing aside, this has been an informative thread. I always wondered how the federation worked and the numbers are interesting.

I agree Josh and although no system is perfect it seems to me that prices set from the supply side have to be a lot more beneficial to producers than when set by the middle man- the bulk buyers and wholesale packagers as I assume is done here in the US. Which brings me to ask exactly how are bulk prices set here? Who determines the bulk rate?

[maple flats]

To some extent the federation prices guide the US prices. However, they rise and fall much more as the laws of supply and demand drive them. As the bulk market buyer needs more syrup to meet their commitments the price rises and vise versa. I think this is as it should be. Anytime prices are frozen artificially the producers are not guided to properly meet future demands, in either direction. If the price is held artificially high we expand and if artificially low we hold or some even reduce. When this is not in direct correlation to the world market producers are not ready to meet that demand by having responded properly. It can generate big surpluses if the set price was too high and shortages if it was set too low. For these reasons I want the prices to reflect the demand. Even with production swings a big factor like comparing last year and this year, the supply and demand still works pretty well.

[CBOYER]

i see lots of good understanding:
The government enforces the rules the federation has.... yes
How's the federation socialist when it's run, and paid for, by the producers...Because you madatory need to be with them...
where once you're in, you're one of the good ole boys... THATS is the main problem: they want to keep the group small, easyest to give new Quotas to existing member, they are the one that votes...
how are bulk prices set here...theres is negociation between FPAQ and Major approved Buyers each year or two. Prices are set there, and i could assure you that NO ONE Usa buyers will give you their buying prices before having this information.

Anytime prices are frozen artificially the producers are not guided to properly meet future demands, in either direction. If the price is held artificially high we expand and if artificially low we hold or some even reduce

Thats not true: with 30-40M lbs in inventory at the FPAQ, avalaible at a fixed price, that is what stabilised demand. Number of taps are also stabilised in Qc at 42-43M. Variation in Usa for 2013 is +0.8M taps. as i show you before, even if 2012 was a bad year in Usa, (low supply) prices rises only by 1% due to reserve.

at an lower base, compare to petrol:

Opep decide quotas of production to maintain prices.
Usa had a Strategic reserve to prevents bad news.
Distributors (raffiners) takes the big profits...

[Amber Gold]

CBOYER, how do yo have such a good knowledge of how all this stuff works?

So once a QC producer meets their quota, do they stop producing, or do the keep producing and stockpile in case they have a bad year and don't meet their quota.

What happens if a producer doesn't meet their quota?

The strategic reserve stabilizes prices in case there are bad years, or a sudden uptake in demand. If the reserve is being used, does next year's quotas increase to refill the reserve. I'm also guessing that if the demand seems long term that the quotas (at least in part) would be permanently increased?

A few years ago, the reserve was depleted by two consecutive bad years in QC and bulk prices skyrocketed as a result. Didn't the high prices actually hurt bulk sales to the market...syrup just cost too much so food companies found alternative sugar sources? If this were to happen again, would QC buy US syrup to re-stock the reserve? US producers have increased production significantly in recent years.

From a business running standpoint, aren't there incentives for QC producers to produce more syrup from fewer taps to meet their quotas? Less of a system to buy and maintain = more profit.

[CBOYER]

CBOYER, how do yo have such a good knowledge of how all this stuff works?

So once a QC producer meets their quota, do they stop producing, or do the keep producing and stockpile in case they have a bad year and don't meet their quota.

They do as they want: stop, or continue. if they continue, they have to send their syrup to the FPAQ reserve, and will be paid only when it would be sale, after any over years Quotas. could be 4- 5 years !!!!

What happens if a producer doesn't meet their quota?

in resume, FPAQ will reduce it after 2 years (very complex to explain details)

The strategic reserve stabilizes prices in case there are bad years, or a sudden uptake in demand. If the reserve is being used, does next year's quotas increase to refill the reserve. I'm also guessing that if the demand seems long term that the quotas (at least in part) would be permanently increased?

Thats happen in 2008, and now they set a bigger reserve, they had need a bigger warehouse, start building it and rent a temporary one that cause "the theft"

A few years ago, the reserve was depleted by two consecutive bad years in QC and bulk prices skyrocketed as a result. Didn't the high prices actually hurt bulk sales to the market...syrup just cost too much so food companies found alternative sugar sources? If this were to happen again, would QC buy US syrup to re-stock the reserve? US producers have increased production significantly in recent years.

Thats the main reason for the Reserve: Prevent Food company alternative to came on the market. someone had to assure those big customers for supply. Qc will never buy syrup from Us, since FPAQ is only an "intermediate" between Qc producers and approved buyers. If Usa increase production, it will be more competition, and price will surely go down.

From a business running standpoint, aren't there incentives for QC producers to produce more syrup from fewer taps to meet their quotas? Less of a system to buy and maintain = more profit.

Quotas are based on lbs produced, and related to a limited number of taps. they start at a base of 2.25 lbs/ taps when tuey were created. Like everyone Qc producers try to get the more syrup for less work/money.
The big difference is climate; Qc sugarbush are colder, give less but more constant.

Amber you had the goods questions !!!

I'm a retired Chemical industry mechanical/material corrosion designer. I always make syrup as an hobby. I'm involved in Forums to try keep some english. I'm French Mod at SBI, Mod in Les Sucriers, Qc french Maple forum, an Main mod in MonPanache, the Qc hunting forum.i like to search on the web to help fellows on forums.