The market adjusts: Bulk maple syrup prices are expected to drop
Photo Gallery | PHOTOS: Robb Family Farm
BRATTLEBORO — Hedge funds are moving in on the maple syrup gold mine, which may change the market for other sugar makers.
A total of $5.5 million was spent last year to acquire 7,000 acres of maple forest in the Northeast Kingdom by Connecticut-based Sweet Tree Holdings 1, LLC. This included the purchase of the former Ethan Allen furniture plant in Island Pond. Instead of being fixated in someone's back yard, this operation is held in a factory, and local sugar makers can see its threat.
"Island Pond is able to produce 55 gallons of syrup every two minutes; with an operation like mine, I'm lucky if I get that done in one day," said Charlie Robb Jr. of Robb Family Farm in Brattleboro.
Bulk syrup prices are expected to be lower when crops go to be sold this spring, according to the Maple News. Typically prices are associated with the size of a harvest. If there is a shortage, prices rise and if there is a surplus then they will fall. Some local sugar makers, such as Robb, feel they already lost a sense of identify when they were lumped together with other states and the grading system changed.
"Prices are falling and the production cycle is not over yet," said Read Miller of Dwight Miller Orchard in Dummerston.
Miller feels the price on retail will not change much for local farmers who are selling to their neighborhood, but it is the bulk market that it going to "take it on the chin." He also stated he was unsure if all syrup will be sold in North America given the expansion.
"I used to get $3.60 and I just got paid $2.20. They all say it has to do with the Canadian Exchange rate, and I believe it's true to an extent, but you can't add those million taps without it affecting the price of syrup," said Robb.
The minimum pricing that will be paid by packers in advance of the season and pricing for the industry as a whole is dictated by The Federation of Maple Syrup Producers of Quebec. There is a good chance that the Canadian dollar will be around 70 percent of the U.S. dollar this spring. Syrup prices may be about $2.10 to $2.20 per pound for the top grades this upcoming season.
For just a glimpse of Sweet Tree's operations, the company tapped 92,000 trees and that sap was pumped down 1,400 miles of tubes. The company expanded this year to what some say is about 150,000 taps.
"I would like to see Vermont step away from the whole thing and become a real table syrup producer, where it would distinguish us from the crowd," said Robb. "I don't see how it has happened."
U.S. packers have to compete with Canadian packers in the market and all of the large syrup accounts are extremely price sensitive, according to Maple News.
"We need to find a niche market, we need to find retail so we don't have to wholesale," said Robb. "That's what I was doing today, I was trying to sell syrup through a winery so we don't have to sell through wholesale. We also have our own bottles."
Robb and other sugar makers take pride in their family-run businesses and their logos that make them unique. Miller says he agrees with Robb, that once everyone had to sign on with the new International Standard for Grading Maple Syrup, they felt they lost a sense of their identity, especially when they forfeited the "fancy" grade,
"Although having the name 'Vermont' on a bottle still bears weight, Vermont still needs to keep itself front and center," said Miller.
With a change in the market, it's almost a given that other sugar makers are forced to adjust their business plans.
Maddi Shaw can be reached at 802-254-2311 ext 275
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