1. Vermont Maple Conference
Maple Profitability: Managing for the Long Haul
Mark Cannella
University of Vermont Extension
Website: blog.uvm.edu/farmvia/

4. The Manager Critical Skills Production Marketing Management
“What you measure is what you promote”

5. Scale and Sweet Spots The profit points may be the painful points
Single owner
Partners
Partners plus Employees

6. Top Performers Low Depreciation High Income vs. Investments
No Single Marketing Strategy (different ways to get to profits)

7. Low Depreciation Depreciation: Average 20% of Gross Income
Range 5% - 36%

8. High Investment : $55 + per tap
One Way to Get There
High Investment : $55 + per tap
High Production:
5 lbs per tap
Low Labor:
7,000 + taps per person
Bulk Price
Whatever you do, know the business you are in and do it well

9. Average Investment : $35- $45 per tap
Another Way to Get There
Average Investment : $35- $45 per tap
Average Production: 3.85 lbs. per tap
Average Labor:
1 FTE per 3-4,000 taps
65 % Bulk 35% Direct Retail

10. Business Cycles 58 Year Old Owner: Needs to reinvest ?
Sell Sap
Initiate Transfer Plan
Capital Gains? Start Planning!

11. Business Cycles 58 Year Old Owner:
Needs to reinvest ?
Sell Sap
Initiate Transfer Plan
Capital Gains? Start Planning!
30 Year Old Prospective Owner seeks to get in.
Debt Service
Real Estate Costs

12. Thank you: Anonymous Producers Website: blog.uvm.edu/farmvia/
VT Maple Benchmark 2014
Thank you:
Anonymous Producers
Website: blog.uvm.edu/farmvia/

13. Objectives Information Based Decision Making
Cost Analysis for Producers
Public Benchmarks

15. Financial Methods Operating Income - Expenses
Accrual Adjustments on Inventory & A/P & A/R
Depreciation: Straight-line method on purchase price
Valuation of Owner Labor $18/hour…. Going to $22
No Real Estate Costs!!
THIS IS NOT CASH FLOW!!!!

16. 2014 Producers 17 Producers Taps < 5,000 Taps: 7 5,000 – 8,499: 4
5,000 – 8,499: 4
8,500 – 14,999: 3
15,000 + :
RO: Early Adopters
Markets:
9 Bulk Producers
8 Mixed Market

17. 2015 -2016 2015 Analysis to be finalized this winter
2016 Financial Collection started last week…. Stay tuned

18. Investment Good investments? They directly increase Gross Revenue
Decreases Labor input
Increase Production

19. So, at $50 per tap a 3,000 tap enterprise has spent at least $150,000 in intermediate assets (equip and improvements)…not including the purchase of forest land.
8,000 tap enterprise at $42 per tap = $336,000
12,000 taps at $38 per tap = $456,000

20. The average production level in 2014 was 0. 38 gallons per tap or 4
The average production level in 2014 was 0.38 gallons per tap or 4.3 lbs per tap

21. Expenses as a % of Income
Fuel (Evaporator Only) 3%
Labor (Paid) 7%
Supplies 6%
Electric

22. Expenses as a % of Income
Variable Cost Total
38%
Fixed Cost Total
(not including depreciation)
18%

23. Non-Cash Items
Unpaid Labor
19 %
Depreciation
20%

24. COP for Operations
Per Tap $
Per Gallon $
Per Pound $

25. COP for Operations: detail

26. COP with Depreciation Per Tap $ 12.04 Per Gallon $ 30.36 Per Pound$
Per Gallon $
Per Pound $

27. COP with Depreciation: detail

28. Full Economic Costs

29. Costs Per Tap

33. Adaptive Changes Buying Sap ! Seeking New Markets Direct Market:
A) Scaling-Up: COP should be competitive to embark on direct marketing (not the reverse).
B) “Preservation Mindset”

34. Adaptive Changes Is adding taps always the answer?
Increase yields from current taps
Invest time into more marketing