World Maple Production and Maple Pricing

By Dave Folino, Hillsboro Sugarworks
The recent relatively high and stable maple syrup prices have been caused by three major factors---the weather, expanding global demand and a supply management system in Quebec. Quebec is by far the largest producer of maple syrup. Quebec usually produces about 80% of the world crop. Vermont usually makes 10-15% as much as Quebec, every other state or province makes far less. At the same time, while Quebec is the major producer of maple syrup, the U.S. is the major consumer---with most syrup being funneled through the U.S. syrup packers such as Butternut Mountain, Maple Grove, Highland Sugarworks, or (Coombs, Brown Family Farm) Bascom Maple. These packers also source their syrup from throughout the U.S, from Indiana to Maine.

To a large extent, maple syrup production is influenced by weather conditions during the spring harvest period. If it’s too warm or too cold, production can drop substantially. This happened in Quebec from 2006-2008. This would be the equivalent of bad weather hurting oil production in Saudi Arabia.
At the same time (pre-recession) global markets for maple syrup were growing at double-digit rates. Asian demand grew rapidly, U.S. demand broadened as syrup became generally available throughout the country in chain and specialty stores.

Quebec is culturally unlike the free-trade U.S.  They have universal health care, cheap colleges, and both dairy and maple supply management. Quebec maple farmers are assured a fair price if they limit production to a quota. They are required to join the “Federation.” All syrup is sold to the Federation at an agreed upon price. The system works as a bank and attempts to establish fair prices and adequate supply. It tries to maintain a surplus to act as a market-buffer. The system works well at guaranteeing prices, but it is not rapidly flexible at expanding supply.

By spring 2008, there was almost no syrup in Quebec or the rest of the world. For the first time in memory, tractor trailer loads of syrup headed from Vermont to Quebec in early 2009. Prices climbed and have remained relatively high throughout 2009. The Federation is still trying to rebuild their surplus.

My expectation is that prices should moderate following the 2010 season. There is rapid production expansion occurring in the U.S. and moderate expansion in Quebec, while production techniques and yields are improving each year.

Demand has slowed slightly—although demand seems to be less elastic than I feared it might be. I would estimate that pricing might drop in the 10% range if adequate supplies are in place after the next season.

An additional factor is beginning to come into play. The Canadian dollar has become roughly equal to the U.S. dollar---and since most syrup is Canadian, this could work to keep U.S. syrup prices relatively high. The stronger the Loonie, the higher the price.

That’s my crystal ball. There are plenty of other variables that could influence supply and price, but that’s a semi-informed snapshot of the maple market as of now