Canadian quotas sweeten profits for U.S. maple syrup farmers
By Jason McLure
(Reuters) - For Vermont farmers Cecile and Tom Branon, the decade-long maple syrup boom allowed them to sell their 150 dairy cows and convert a team of working horses to pets while they focused on expanding their lucrative sugaring operation.
Hundreds of nearby farmers in northern New England have experienced similar windfalls, with U.S. producers, aided by favorable weather, increasing this year's output by 70 percent, to 3.3 million gallons this year. Yet while American farmers cash in, production quotas in the cross-border province of Quebec limit the profits reaped by their Canadian counterparts even as they keep prices high for those unfettered by any restrictions.
Bulk syrup prices have risen 89 percent since 2000, to $2.82 (Canadian dollars) per pound this year, largely the result of the influence of the Federation des Producteurs Acericoles du Quebec (FPAQ), a cartel that controls production in Quebec. The Canadian province, where Native Americans introduced French settlers to the sweet treat more than 400 years ago, is now home to about 75 percent of the world crop.
In Quebec, each sugarmaker is assigned a production limit. Excess syrup is stored in the FPAQ's Global Strategic Maple Reserve in several giant warehouses, to be sold on consignment in years when production falls. The reserve made international headlines last year after police arrested several suspects for stealing $18 million of syrup from one of its storage facilities.
To keep prices up during a record crop, FPAQ expects to increase the reserve this year from 3.3 million gallons to about 6 million gallons — nearly double U.S. output. Quebec sugarmakers don't get paid for their excess production until FPAQ decides to sell it from the reserve, sometimes three or more years later.
Helped by a strong Canadian dollar and FPAQ's quotas, U.S. producers in the Northeast and upper Midwest have added nearly 2 million taps over the past four years, while the number in Quebec has declined by 400,000 over the same period, according to FPAQ and U.S. Department of Agriculture statistics. "We are a victim of our own success," says Paul Rouillard, deputy director of Longueil, Quebec-based FPAQ.
The Branons are among those who have benefited from FPAQ policies. The couple has expanded their operation to 66,000 taps, connected by plastic tubing to the sugar house for boiling. This year they produced maple syrup with a market value of more than $1 million. Already in July, six months before the sap will begin flowing again, they have four staff in the woods adding new 5,000 new taps and repairing existing lines. Each tree can support between one and four taps.
"We had an exceptional year," said Cecile Branon, 55, in an interview. "If you're a property owner and you have maple trees you're not doing something with, then someone is knocking at your door asking to tap the trees." Continued...