1 00:00:00,070 --> 00:00:03,210 - All right, a few more people have just joined. 2 00:00:03,210 --> 00:00:04,620 Thanks again for joining us tonight. 3 00:00:04,620 --> 00:00:08,070 UVM Extension Maple Webinar Series here, 4 00:00:08,070 --> 00:00:10,460 we are gonna hang out for one more minute 5 00:00:10,460 --> 00:00:12,810 and get a few more attendees through the lobby, 6 00:00:14,799 --> 00:00:17,013 and then we'll start the program with Chris Lindgren. 7 00:00:18,680 --> 00:00:19,513 All right, everyone. 8 00:00:19,513 --> 00:00:20,346 Hello, this is Mark Cannella, 9 00:00:20,346 --> 00:00:22,400 University of Vermont Extension. 10 00:00:22,400 --> 00:00:23,780 I'm really glad to have you with us tonight. 11 00:00:23,780 --> 00:00:26,350 We have this maple webinar series 12 00:00:26,350 --> 00:00:27,670 that's been running for several weeks 13 00:00:27,670 --> 00:00:30,090 and still some more sessions to go. 14 00:00:30,090 --> 00:00:31,450 We've got Chris Lindgren here tonight, 15 00:00:31,450 --> 00:00:33,183 I'll introduce him in a moment. 16 00:00:34,490 --> 00:00:36,280 Looking forward to a terrific session 17 00:00:36,280 --> 00:00:38,513 on the business of sap. 18 00:00:40,390 --> 00:00:45,260 A couple items on housekeeping before we get going. 19 00:00:45,260 --> 00:00:46,920 We have disabled everyone's camera 20 00:00:46,920 --> 00:00:49,850 and everyone's audio for the near term. 21 00:00:49,850 --> 00:00:51,310 The way we've run these programs 22 00:00:51,310 --> 00:00:53,830 is we'll give our presenter a chance to talk, 23 00:00:53,830 --> 00:00:55,220 start to present. 24 00:00:55,220 --> 00:00:58,610 Chris can offer a couple of Q and A slots 25 00:00:58,610 --> 00:00:59,980 over the course of the hour. 26 00:00:59,980 --> 00:01:01,650 So there'll be at least one 27 00:01:01,650 --> 00:01:06,290 or two points within the session where I'll click a box 28 00:01:06,290 --> 00:01:07,860 it'll allow you to unmute yourself 29 00:01:07,860 --> 00:01:09,110 when Chris gets to questions. 30 00:01:09,110 --> 00:01:11,240 And if you wanna speak out with a question, 31 00:01:11,240 --> 00:01:13,160 you'll have that option, 32 00:01:13,160 --> 00:01:15,660 you'll also have the option to use the chat bubble. 33 00:01:15,660 --> 00:01:17,780 If you're new to Microsoft teams, 34 00:01:17,780 --> 00:01:20,200 you should have a top ribbon with controls, 35 00:01:20,200 --> 00:01:22,110 and there's a little bit of a cartoon bubble there 36 00:01:22,110 --> 00:01:24,240 for the chat box, you can click that, 37 00:01:24,240 --> 00:01:27,970 and welcome you to type in questions at any point. 38 00:01:27,970 --> 00:01:30,120 I'll moderate questions either during the breaks 39 00:01:30,120 --> 00:01:32,120 or we'll save some for the end 40 00:01:32,120 --> 00:01:33,893 depending on how the timing goes. 41 00:01:35,240 --> 00:01:37,310 I'd like to let you know that in that chat bubble, 42 00:01:37,310 --> 00:01:39,310 there is a closed captioning link. 43 00:01:39,310 --> 00:01:42,520 If any of you find that helpful you can click that link. 44 00:01:42,520 --> 00:01:45,880 And we do have a closed captioner working behind the scenes 45 00:01:45,880 --> 00:01:49,040 that is typing out everything we say. 46 00:01:49,040 --> 00:01:50,650 That's an option in the chat bubble, 47 00:01:50,650 --> 00:01:52,770 and I always like to invite people. 48 00:01:52,770 --> 00:01:54,130 You're more than welcome to send a note, 49 00:01:54,130 --> 00:01:55,580 we don't have time in these groups 50 00:01:55,580 --> 00:01:57,590 to go through personal introductions, 51 00:01:57,590 --> 00:01:59,020 but if you wanna send a note and say, 52 00:01:59,020 --> 00:02:01,720 hey, where are you from, anything about your business, 53 00:02:03,840 --> 00:02:04,700 we always welcome that, 54 00:02:04,700 --> 00:02:06,543 and it's always fun to see where people are, 55 00:02:06,543 --> 00:02:08,960 and you mention your state as well. 56 00:02:08,960 --> 00:02:10,670 We've been getting people from all over the country 57 00:02:10,670 --> 00:02:13,330 and have folks from Ontario, Quebec, 58 00:02:13,330 --> 00:02:16,383 and other Canadian provinces as well. 59 00:02:17,220 --> 00:02:19,256 So I've covered close captioning. 60 00:02:19,256 --> 00:02:20,400 Another point to mention, 61 00:02:20,400 --> 00:02:22,870 several of you have indicated that you'd like a certificate 62 00:02:22,870 --> 00:02:25,870 or you may be looking for certifications, 63 00:02:25,870 --> 00:02:27,400 we do have confirmation 64 00:02:27,400 --> 00:02:30,060 that we have credits available for this program. 65 00:02:30,060 --> 00:02:34,240 If you're a member of the Society of American Foresters, 66 00:02:34,240 --> 00:02:35,730 we've got your email contact, 67 00:02:35,730 --> 00:02:38,230 so a few weeks into the future, 68 00:02:38,230 --> 00:02:40,680 we'll be sending follow up emails to attendees 69 00:02:40,680 --> 00:02:44,520 and just confirming the best ways to transfer certificates 70 00:02:44,520 --> 00:02:47,293 or records of your participation. 71 00:02:48,930 --> 00:02:51,420 I believe I've covered most of the housekeeping. 72 00:02:51,420 --> 00:02:53,400 Oh, last thing, Chris will introduced himself. 73 00:02:53,400 --> 00:02:55,610 We do have potential of some spotty connections 74 00:02:55,610 --> 00:02:58,120 with thunderstorm moving through the areas 75 00:02:58,120 --> 00:02:59,080 in Vermont right now. 76 00:02:59,080 --> 00:03:00,920 So if we have any interruptions, 77 00:03:00,920 --> 00:03:02,570 we're gonna just do the best we can, 78 00:03:02,570 --> 00:03:04,880 and we'll go with the flow. 79 00:03:04,880 --> 00:03:06,980 Chris and I have a couple of backup plans. 80 00:03:08,840 --> 00:03:09,673 So I'll stop there. 81 00:03:09,673 --> 00:03:10,540 I'm gonna introduce Chris Lindgren. 82 00:03:10,540 --> 00:03:12,320 Chris is our forest business coordinator 83 00:03:12,320 --> 00:03:14,140 with the University of Vermont Extension. 84 00:03:14,140 --> 00:03:17,160 He runs a variety of programs doing business coaching 85 00:03:17,160 --> 00:03:18,580 with forest products owners, 86 00:03:18,580 --> 00:03:20,510 and Chris and I have worked closely 87 00:03:20,510 --> 00:03:23,300 on a number of our maple economics projects 88 00:03:23,300 --> 00:03:25,030 over the past several years. 89 00:03:25,030 --> 00:03:28,010 Chris can tell you more about projects he's got himself, 90 00:03:28,010 --> 00:03:29,570 but tonight we're gonna settle in, 91 00:03:29,570 --> 00:03:32,123 and Chris is gonna present on the business of sap. 92 00:03:33,090 --> 00:03:34,890 Chris I'm gonna hand it over to you. 93 00:03:35,820 --> 00:03:38,490 - Okay, excellent. Thanks, Mark. 94 00:03:38,490 --> 00:03:40,083 How's my sound still good? 95 00:03:41,750 --> 00:03:43,883 - Yep, you're coming through fine. 96 00:03:44,970 --> 00:03:45,803 - Okay. 97 00:03:47,800 --> 00:03:48,633 Let's see. 98 00:03:48,633 --> 00:03:50,220 I wanted to turn my video off 99 00:03:52,730 --> 00:03:55,213 to help with a band with issues. 100 00:03:57,341 --> 00:03:58,393 So I'll do that now. 101 00:03:59,470 --> 00:04:04,423 Here's a slide with a couple of upcoming webinars, 102 00:04:09,400 --> 00:04:12,640 next month or so one on contracts and legal agreements, 103 00:04:12,640 --> 00:04:13,890 which is actually pretty relevant 104 00:04:13,890 --> 00:04:17,740 to what we're talking about tonight as well. 105 00:04:17,740 --> 00:04:22,740 And then something on maple forest and carbon on the 13th, 106 00:04:23,070 --> 00:04:25,450 and then Northeast forest land taxes 107 00:04:25,450 --> 00:04:29,130 and programs towards the end of October. 108 00:04:29,130 --> 00:04:32,123 And you can register for these at maple manager. 109 00:04:34,420 --> 00:04:36,030 So good evening, everybody. 110 00:04:36,030 --> 00:04:38,420 Thanks for tuning in tonight. 111 00:04:38,420 --> 00:04:39,950 My name's Chris Lindgren. 112 00:04:39,950 --> 00:04:42,000 I work with UVM Extension as Mark said, 113 00:04:42,000 --> 00:04:43,560 and I split my time 114 00:04:43,560 --> 00:04:45,980 between managing Forest Business program, 115 00:04:45,980 --> 00:04:47,310 working one-on-one with forest 116 00:04:47,310 --> 00:04:48,880 and wood products business owners, 117 00:04:48,880 --> 00:04:51,467 to improve profitability and working with Mark Cannella 118 00:04:51,467 --> 00:04:54,090 and the maple team on economic research 119 00:04:54,090 --> 00:04:55,443 and development projects. 120 00:04:56,850 --> 00:04:59,420 I started investigating sap business economics 121 00:04:59,420 --> 00:05:02,820 about 15 years ago in Western Vermont where I live, 122 00:05:02,820 --> 00:05:05,090 and I harvest that from about 700 taps 123 00:05:05,090 --> 00:05:07,560 in three nearby sugarbushes. 124 00:05:07,560 --> 00:05:09,420 I'll be stopping a couple of times along the way, 125 00:05:09,420 --> 00:05:10,500 as Mark mentioned, 126 00:05:10,500 --> 00:05:13,400 during this presentation to address questions, 127 00:05:13,400 --> 00:05:14,570 so please hold your questions 128 00:05:14,570 --> 00:05:16,280 or enter them into the chat box 129 00:05:16,280 --> 00:05:18,480 and we can address them during these breaks. 130 00:05:20,050 --> 00:05:21,610 Today's presentation is gonna share 131 00:05:21,610 --> 00:05:24,870 some of what we've learned about the business of sap. 132 00:05:24,870 --> 00:05:27,310 sap selling has always been part of the industry. 133 00:05:27,310 --> 00:05:29,780 The little research that we're aware of has been done 134 00:05:29,780 --> 00:05:31,100 on economic viability 135 00:05:31,100 --> 00:05:34,010 or cost of production of the sap business. 136 00:05:34,010 --> 00:05:37,030 This work is a start but surely not the end. 137 00:05:37,030 --> 00:05:37,900 As a matter of fact, 138 00:05:37,900 --> 00:05:40,120 this year we have several sap only businesses 139 00:05:40,120 --> 00:05:43,350 enrolled in our maple business benchmark project, 140 00:05:43,350 --> 00:05:45,260 and we're looking for some more. 141 00:05:45,260 --> 00:05:47,660 So contact me if you're interested in participating 142 00:05:47,660 --> 00:05:48,670 in costs of production 143 00:05:48,670 --> 00:05:51,160 and benchmarking work for sap business, 144 00:05:51,160 --> 00:05:52,910 or if you're a landowner interested 145 00:05:53,926 --> 00:05:56,050 in considering a sap business. 146 00:05:56,050 --> 00:05:57,900 We have some new programming up 147 00:05:57,900 --> 00:05:59,450 that you will be interested in. 148 00:06:00,370 --> 00:06:01,650 But this presentation 149 00:06:01,650 --> 00:06:05,270 we have not specifically researched sap businesses. 150 00:06:05,270 --> 00:06:06,640 What we've done is mine 151 00:06:06,640 --> 00:06:09,663 and analyze existing data for sap businesses. 152 00:06:11,130 --> 00:06:13,070 We've worked with 50 plus maple businesses 153 00:06:13,070 --> 00:06:16,610 in the benchmark project and gleaned data from 21, 154 00:06:16,610 --> 00:06:19,000 sap on the business responses 155 00:06:19,000 --> 00:06:21,760 to the Northeast producers survey. 156 00:06:21,760 --> 00:06:26,210 This analysis indicates opportunity in sap businesses. 157 00:06:26,210 --> 00:06:28,730 As a producer said to me just last week, 158 00:06:28,730 --> 00:06:31,023 I think that sap is a viable business. 159 00:06:32,180 --> 00:06:34,750 This presentation will include a quick review 160 00:06:34,750 --> 00:06:37,050 to get us all on the same page. 161 00:06:37,050 --> 00:06:39,120 A taste of research on sap business 162 00:06:39,120 --> 00:06:40,950 and the cost of woods activities 163 00:06:40,950 --> 00:06:43,310 from UVM Extension maple team, 164 00:06:43,310 --> 00:06:44,660 and a look at planning tools 165 00:06:44,660 --> 00:06:46,650 and other useful resources for starting 166 00:06:46,650 --> 00:06:48,970 or running a maple sap business. 167 00:06:48,970 --> 00:06:49,803 We're gonna end up 168 00:06:49,803 --> 00:06:52,533 looking at a couple of sap business models. 169 00:06:53,490 --> 00:06:55,300 So what is a sap business? 170 00:06:55,300 --> 00:06:56,670 In the Northeast producer survey, 171 00:06:56,670 --> 00:06:59,790 we identified these businesses as sap only. 172 00:06:59,790 --> 00:07:03,180 A sap business harvest maple sap from the forest 173 00:07:03,180 --> 00:07:05,910 and sells the sap or trades the sap for syrup. 174 00:07:05,910 --> 00:07:07,810 The sap business is the woods part 175 00:07:07,810 --> 00:07:09,253 of maple syrup production. 176 00:07:11,190 --> 00:07:13,270 Why would 10,000 maple farms 177 00:07:13,270 --> 00:07:15,610 do we need more sap businesses? 178 00:07:15,610 --> 00:07:17,430 Well, the big picture is, 179 00:07:17,430 --> 00:07:19,950 sugaring is a driver of economic development, 180 00:07:19,950 --> 00:07:23,050 a growth industry for rural areas that provides jobs 181 00:07:23,050 --> 00:07:25,750 and supports keeping forests as forests. 182 00:07:25,750 --> 00:07:28,460 It's estimated that only 3% of Maples are tapped. 183 00:07:28,460 --> 00:07:31,050 There is substantial growth potential here. 184 00:07:31,050 --> 00:07:34,110 On a personal level why would you start 185 00:07:34,110 --> 00:07:36,000 or have a sap business? 186 00:07:36,000 --> 00:07:37,560 Some producers prefer to structure 187 00:07:37,560 --> 00:07:38,680 their businesses to gather 188 00:07:38,680 --> 00:07:40,640 and sell sap to maple syrup producers 189 00:07:40,640 --> 00:07:44,260 based on certain skills, lower investment requirements, 190 00:07:44,260 --> 00:07:46,690 efficiencies of specialization, 191 00:07:46,690 --> 00:07:49,650 focus on business to business relationships, 192 00:07:49,650 --> 00:07:52,333 preference for forests amongst many factors. 193 00:07:53,250 --> 00:07:56,290 This why is a core question to business planning? 194 00:07:56,290 --> 00:07:58,920 We each have our own answer to this question. 195 00:07:58,920 --> 00:08:01,190 I got started because I had maple trees 196 00:08:01,190 --> 00:08:02,450 and I love being out in the woods 197 00:08:02,450 --> 00:08:04,200 doing something productive. 198 00:08:04,200 --> 00:08:06,300 Gathering and selling sap is a way to begin 199 00:08:06,300 --> 00:08:10,540 the investment and reinvestment growth cycle for sap 200 00:08:10,540 --> 00:08:12,170 or a syrup business. 201 00:08:12,170 --> 00:08:14,250 Gathering selling sap is the easiest 202 00:08:14,250 --> 00:08:17,760 and lowest cost way to get started in the maple business. 203 00:08:17,760 --> 00:08:19,850 Tonight, we'll be talking about identifying, 204 00:08:19,850 --> 00:08:22,763 establishing and growing sap businesses. 205 00:08:26,036 --> 00:08:28,870 But first a quick review of the relationship between sap 206 00:08:28,870 --> 00:08:33,030 and syrup and the methods for valuing or pricing sap. 207 00:08:33,030 --> 00:08:35,380 We all likely know that sap from the maple trees 208 00:08:35,380 --> 00:08:36,870 is collected and processed, 209 00:08:36,870 --> 00:08:39,270 de-watered via reverse osmosis 210 00:08:39,270 --> 00:08:43,100 and or evaporation to produce maple syrup. 211 00:08:43,100 --> 00:08:45,200 Hence the price of sap is directly connected 212 00:08:45,200 --> 00:08:46,990 to the price of syrup. 213 00:08:46,990 --> 00:08:49,950 And the bulk price of syrup is generally used 214 00:08:49,950 --> 00:08:51,730 to determine the value of sap. 215 00:08:51,730 --> 00:08:55,660 Currently bulk prices in Vermont are up a bit from last year 216 00:08:55,660 --> 00:08:58,819 ranging from about 210 to 240 per pound, 217 00:08:58,819 --> 00:09:03,123 which is an equivalent of 23, 27$ per gallon. 218 00:09:04,400 --> 00:09:07,730 sap varies in quality over the course of the season. 219 00:09:07,730 --> 00:09:09,730 Quality is also affected by freshness 220 00:09:09,730 --> 00:09:12,000 and sap handling and storage. 221 00:09:12,000 --> 00:09:13,400 Quality affects grade, 222 00:09:13,400 --> 00:09:15,210 which in turn impacts the value 223 00:09:15,210 --> 00:09:17,860 or price paid to the sap producer. 224 00:09:17,860 --> 00:09:21,880 The other values or the other variables impacting 225 00:09:21,880 --> 00:09:24,320 sap value is sweetness. 226 00:09:24,320 --> 00:09:27,720 Sweeter sap requires less energy inputs to concentrate. 227 00:09:27,720 --> 00:09:30,760 This makes sweeter sap worth more per gallon. 228 00:09:30,760 --> 00:09:35,573 2.4% sap is worth more than 2% sap per gallon. 229 00:09:36,950 --> 00:09:39,723 Now we'll do a quick research review. 230 00:09:41,820 --> 00:09:43,350 Our survey work hints 231 00:09:43,350 --> 00:09:46,253 that there's underutilized processor capacity. 232 00:09:47,340 --> 00:09:49,550 As producers you know how much more sap 233 00:09:49,550 --> 00:09:53,290 they could process without adding new processing equipment. 234 00:09:53,290 --> 00:09:57,110 With 67% of processors using reverse osmosis, 235 00:09:57,110 --> 00:09:59,420 sap handling and processing has increased 236 00:09:59,420 --> 00:10:01,080 at the company level. 237 00:10:01,080 --> 00:10:04,220 In part, this is driving expansion in the woods. 238 00:10:04,220 --> 00:10:06,590 For every buyer there must be a seller. 239 00:10:06,590 --> 00:10:11,590 Our survey work reported 130 business says buying sap. 240 00:10:12,530 --> 00:10:15,930 This sample purchased over 2 million gallons of sap annually 241 00:10:15,930 --> 00:10:19,590 with the average producer buying 15,000 gallons of sap 242 00:10:19,590 --> 00:10:21,180 and large business processing 243 00:10:23,520 --> 00:10:27,910 over 800,000 gallons of purchase sap annually. 244 00:10:27,910 --> 00:10:31,723 This seemed to me to be a demand opportunity. 245 00:10:32,780 --> 00:10:34,310 As mentioned, we did not 246 00:10:34,310 --> 00:10:37,490 specifically researched sap business. 247 00:10:37,490 --> 00:10:39,060 We have mined the existing data 248 00:10:39,060 --> 00:10:40,823 for sap business information. 249 00:10:41,990 --> 00:10:44,760 We have for sap businesses in the benchmark project. 250 00:10:44,760 --> 00:10:49,070 and 7%, which is 21 responses to the Northeast survey 251 00:10:49,070 --> 00:10:51,160 identified as sap businesses. 252 00:10:51,160 --> 00:10:53,130 What did the survey say? 253 00:10:53,130 --> 00:10:55,310 The survey showed significant opportunity 254 00:10:55,310 --> 00:11:00,010 and this slide shows that 95% of sap businesses 255 00:11:00,010 --> 00:11:03,320 reported that they are sustainable or viable. 256 00:11:03,320 --> 00:11:05,920 Where sustainable indicates a going concern 257 00:11:05,920 --> 00:11:08,110 despite weak profitability 258 00:11:08,110 --> 00:11:10,670 and viability indicates a profitable business 259 00:11:10,670 --> 00:11:14,490 with the ability to operate profitably indefinitely. 260 00:11:14,490 --> 00:11:17,610 When comparing sap businesses to integrated operations, 261 00:11:17,610 --> 00:11:20,730 which you see here on the left, sap on the left, 262 00:11:20,730 --> 00:11:24,330 and the integrated operations on the right, 263 00:11:24,330 --> 00:11:27,270 our survey data suggests that sap businesses 264 00:11:27,270 --> 00:11:30,050 as industry participants are more profitable 265 00:11:30,050 --> 00:11:32,370 than combined syrup processing operations 266 00:11:32,370 --> 00:11:35,530 with 55% of sap businesses able to operate 267 00:11:35,530 --> 00:11:38,340 as viable, profitable businesses, 268 00:11:38,340 --> 00:11:41,670 as compared to 25% of the integrated operations. 269 00:11:41,670 --> 00:11:45,340 And again, if you add together economic viability 270 00:11:45,340 --> 00:11:49,290 and sustainability, you have 95% of sap businesses 271 00:11:50,320 --> 00:11:52,610 who are economically viable or sustainable 272 00:11:52,610 --> 00:11:57,610 and closer to 85% of the integrated operations. 273 00:11:59,140 --> 00:12:01,960 So when I saw this information from the survey, 274 00:12:01,960 --> 00:12:03,563 I got pretty excited. 275 00:12:04,930 --> 00:12:06,090 So after that quick review, 276 00:12:06,090 --> 00:12:08,440 I just wanted to take a couple of questions. 277 00:12:08,440 --> 00:12:10,560 Mark, if there was any questions 278 00:12:10,560 --> 00:12:11,970 that people wanted to give me live 279 00:12:11,970 --> 00:12:14,760 or if there were any questions in the chat box. 280 00:12:14,760 --> 00:12:17,810 - Yeah, I'm gonna read them off right now, Chris. 281 00:12:17,810 --> 00:12:20,020 There's got one, and I'm gonna encourage folks 282 00:12:20,020 --> 00:12:24,030 to type in if you can and I'll work on the mic. 283 00:12:24,030 --> 00:12:26,130 Chris, one question from Ross is, 284 00:12:26,130 --> 00:12:28,210 is the sap program you mentioned at the beginning, 285 00:12:28,210 --> 00:12:30,603 is that available only to Vermont residents? 286 00:12:32,500 --> 00:12:35,290 - No, but it's gonna be primarily 287 00:12:35,290 --> 00:12:37,010 initially for Vermont residents 288 00:12:37,010 --> 00:12:38,620 and then throughout the Northeast. 289 00:12:38,620 --> 00:12:42,010 And I'll talk a little bit more about that at the end, 290 00:12:42,010 --> 00:12:45,220 but definitely welcome anyone who's interested 291 00:12:45,220 --> 00:12:46,563 to follow up with me. 292 00:12:47,410 --> 00:12:49,420 - Great, and I'm not seeing anything else in the chat box, 293 00:12:49,420 --> 00:12:51,780 Chris, I'll suggest you keep going 294 00:12:51,780 --> 00:12:55,250 and we'll keep an eye on the chat box. 295 00:12:55,250 --> 00:12:57,980 - Okay, so if you're sold on the idea 296 00:12:57,980 --> 00:13:00,260 and you wanna get into the sap business, 297 00:13:00,260 --> 00:13:04,090 you need two things, sap and buyers. 298 00:13:04,090 --> 00:13:05,970 And so it starts your planning process. 299 00:13:05,970 --> 00:13:07,690 I encourage business planning, 300 00:13:07,690 --> 00:13:10,810 and maplemanager.org there's numerous resources 301 00:13:10,810 --> 00:13:12,380 on business planning. 302 00:13:12,380 --> 00:13:14,296 Find and use the one-page plan, 303 00:13:14,296 --> 00:13:17,720 I'll work your way through the online planning module. 304 00:13:17,720 --> 00:13:20,700 Research indicates that business planning increases chances 305 00:13:20,700 --> 00:13:22,883 of business success and profitability. 306 00:13:24,590 --> 00:13:28,150 Once you have your sap sourced and you have buyers, 307 00:13:28,150 --> 00:13:29,780 you wanna establish a business 308 00:13:29,780 --> 00:13:31,500 by opening up a checking account, 309 00:13:31,500 --> 00:13:34,040 setting up systems to track sales and expenses 310 00:13:34,040 --> 00:13:36,390 and formalizing any lease agreements 311 00:13:36,390 --> 00:13:38,700 and or purchase and sales arrangements. 312 00:13:38,700 --> 00:13:40,410 But I am getting ahead of myself. 313 00:13:40,410 --> 00:13:42,180 So first things first, 314 00:13:42,180 --> 00:13:43,430 we need to locate a sugarbush 315 00:13:43,430 --> 00:13:46,893 and secure access to maple trees. 316 00:13:47,760 --> 00:13:49,790 The place to start is with an assessment 317 00:13:49,790 --> 00:13:52,570 of your potential sap source, 318 00:13:52,570 --> 00:13:54,940 whether your land or your neighbors lands, 319 00:13:54,940 --> 00:13:58,110 this tool was developed to aid perspective sappers 320 00:13:58,110 --> 00:14:00,690 in analyzing opportunity. 321 00:14:00,690 --> 00:14:03,050 Let's look briefly at this assessment tool. 322 00:14:03,050 --> 00:14:06,733 Also send information on this to everybody 323 00:14:06,733 --> 00:14:09,603 after this presentation. 324 00:14:11,440 --> 00:14:16,440 Let's click into here and make it a little bigger. 325 00:14:18,190 --> 00:14:19,390 So this two page assessment 326 00:14:19,390 --> 00:14:21,190 first looks at important attributes 327 00:14:21,190 --> 00:14:22,703 of a productive sugarbush. 328 00:14:23,740 --> 00:14:24,690 And then we're gonna look 329 00:14:24,690 --> 00:14:27,163 at essential business planning considerations. 330 00:14:28,350 --> 00:14:33,120 I developed this with some scoring criteria 331 00:14:33,120 --> 00:14:34,780 to help you rate the sugarbush 332 00:14:34,780 --> 00:14:37,133 that you might be looking to analyze. 333 00:14:40,010 --> 00:14:44,490 We've got 10 sugarbush attributes here 334 00:14:44,490 --> 00:14:46,029 that are important to assess 335 00:14:46,029 --> 00:14:48,580 when you're thinking about tapping out 336 00:14:49,820 --> 00:14:53,730 or leasing taps. 337 00:14:53,730 --> 00:14:56,023 First one of course is your tapping density. 338 00:14:58,180 --> 00:15:00,010 Here's our ranges. 339 00:15:00,010 --> 00:15:05,010 And you find a capping density by doing some sampling 340 00:15:05,440 --> 00:15:06,273 in your sugarbush. 341 00:15:06,273 --> 00:15:09,170 If it's small enough, you can walk through and count them. 342 00:15:09,170 --> 00:15:12,150 I've used a clicker and some of mine, smaller sugarbushes, 343 00:15:12,150 --> 00:15:14,650 I got four acres and I walked through 344 00:15:14,650 --> 00:15:17,840 and count them with a clicker. 345 00:15:17,840 --> 00:15:19,320 Of course, that brings us to the next thing 346 00:15:19,320 --> 00:15:22,050 is to how many acres you have available. 347 00:15:22,050 --> 00:15:25,210 The amount of acres that you can potentially tap 348 00:15:25,210 --> 00:15:29,410 times the estimated number of taps per acre 349 00:15:29,410 --> 00:15:30,730 will give you your total 350 00:15:30,730 --> 00:15:34,770 potential taps for that sugarbush, 351 00:15:34,770 --> 00:15:37,820 which is gonna be needed to feed into your assessment 352 00:15:37,820 --> 00:15:39,223 to look at profitability. 353 00:15:40,400 --> 00:15:43,690 These other other attributes here are important 354 00:15:45,290 --> 00:15:49,000 when it comes to soils, moving around in the sugarbush, 355 00:15:49,000 --> 00:15:51,920 or developing roads that matters, 356 00:15:51,920 --> 00:15:53,473 the type of soils you have. 357 00:15:54,461 --> 00:15:56,800 You wanna see what kind of sugarbush you have. 358 00:15:56,800 --> 00:15:58,390 There's not only the number of taps, 359 00:15:58,390 --> 00:16:02,780 but are they older trees that are on decline 360 00:16:02,780 --> 00:16:04,470 or is it a younger sugarbush? 361 00:16:04,470 --> 00:16:06,970 What's the health that you have there? 362 00:16:06,970 --> 00:16:08,660 Down here we look at management, 363 00:16:08,660 --> 00:16:12,330 is there a significant work that needs to be done? 364 00:16:12,330 --> 00:16:16,590 Managing the sugarbush, stuff that needs to be trimmed out, 365 00:16:16,590 --> 00:16:17,993 encourage new growth. 366 00:16:20,290 --> 00:16:21,880 Access to your sugarbush 367 00:16:21,880 --> 00:16:24,523 as well as within your sugarbush is very important. 368 00:16:26,000 --> 00:16:27,410 And each one of these, 369 00:16:27,410 --> 00:16:31,020 you can give it a score of one to three, 370 00:16:31,020 --> 00:16:35,410 looking at these various descriptions in these cells. 371 00:16:35,410 --> 00:16:36,860 And then another important thing 372 00:16:36,860 --> 00:16:40,090 to pay attention to is your estimated costs. 373 00:16:40,090 --> 00:16:41,490 Here when it comes to, 374 00:16:41,490 --> 00:16:43,350 say you're looking at your tapping density, 375 00:16:43,350 --> 00:16:45,460 you might need to hire a forester 376 00:16:45,460 --> 00:16:47,140 or you might do it yourself. 377 00:16:47,140 --> 00:16:48,810 You might wanna consider how much time 378 00:16:48,810 --> 00:16:50,420 that's gonna take you, 379 00:16:50,420 --> 00:16:53,173 incorporate that into some of your startup costs. 380 00:16:54,150 --> 00:16:55,180 Other things it's important 381 00:16:55,180 --> 00:16:58,500 to pay attention to our availability of utilities. 382 00:16:58,500 --> 00:17:02,020 Are you gonna be looking to put in a vacuum pumps? 383 00:17:02,020 --> 00:17:04,900 Do you have electricity at the road? 384 00:17:04,900 --> 00:17:07,130 How far might you need to bring it in? 385 00:17:07,130 --> 00:17:11,000 Do you have a good site where you could put up a sap shack 386 00:17:11,000 --> 00:17:13,983 to house, your tanks, your pumps? 387 00:17:15,670 --> 00:17:16,940 Are you gonna have to pay a lot of money 388 00:17:16,940 --> 00:17:18,770 to bring electricity in? 389 00:17:18,770 --> 00:17:21,290 You can add those costs in. 390 00:17:21,290 --> 00:17:23,480 Grade of site is really important 391 00:17:23,480 --> 00:17:25,110 for moving around in the site 392 00:17:25,110 --> 00:17:28,460 as well as for helping transport your sap, 393 00:17:28,460 --> 00:17:30,300 which way does a grade flow, 394 00:17:30,300 --> 00:17:33,303 does it flow towards the road or away from the road? 395 00:17:34,400 --> 00:17:36,310 Getting a sense of the management history 396 00:17:36,310 --> 00:17:37,913 and the sugarbushes important. 397 00:17:38,930 --> 00:17:41,470 The composition of your forests, 398 00:17:41,470 --> 00:17:46,470 you kind of aim for that 80% is the best practice 399 00:17:46,530 --> 00:17:50,450 these days no more than 80% in sugar maples 400 00:17:50,450 --> 00:17:54,070 in order to keep from having a monoculture, 401 00:17:54,070 --> 00:17:57,880 keeps your forest a much healthier and much more resilient. 402 00:17:57,880 --> 00:17:59,930 And then we start looking at the distance 403 00:17:59,930 --> 00:18:02,120 to your potential customers. 404 00:18:02,120 --> 00:18:06,550 So if you have a sugarbush where are the sugar makers, 405 00:18:06,550 --> 00:18:10,200 the syrup makers who you're gonna sell sap to? 406 00:18:10,200 --> 00:18:12,980 Are they far away? Are they close by? 407 00:18:12,980 --> 00:18:15,003 What kind of roads do you need to drive? 408 00:18:15,840 --> 00:18:20,570 I've got two different producers that I sell to. 409 00:18:20,570 --> 00:18:22,460 One of them is really close, 410 00:18:22,460 --> 00:18:26,740 but it's on a dirt road that gets really bad 411 00:18:26,740 --> 00:18:27,900 in the spring time. 412 00:18:27,900 --> 00:18:30,730 And sometimes it takes me longer to drive those four miles 413 00:18:30,730 --> 00:18:34,990 than it does the 12 miles down the paved road 414 00:18:34,990 --> 00:18:39,653 to the sugar producer that I sell to in the next town. 415 00:18:40,490 --> 00:18:43,210 Those are important things to consider. 416 00:18:43,210 --> 00:18:45,520 Finally, looking at expansion. 417 00:18:45,520 --> 00:18:47,060 We all dream of getting bigger 418 00:18:47,060 --> 00:18:49,650 when we start our sugaring operation. 419 00:18:49,650 --> 00:18:54,623 So how much expansion ability is there close by? 420 00:18:56,924 --> 00:18:58,910 So those are important sort of resource 421 00:18:59,960 --> 00:19:01,393 attributes to look at. 422 00:19:02,230 --> 00:19:03,170 And then it's important 423 00:19:03,170 --> 00:19:07,033 to couple that with a business assessment. 424 00:19:07,980 --> 00:19:12,130 This is getting at what I was talking about with how close 425 00:19:12,130 --> 00:19:15,780 or far away potential buyers are, where are the markets? 426 00:19:15,780 --> 00:19:18,273 And what's the competition for sap? 427 00:19:19,480 --> 00:19:22,270 What kind of labor and management needs you're gonna have? 428 00:19:22,270 --> 00:19:25,900 This will match up with how many taps do you have? 429 00:19:25,900 --> 00:19:28,860 How many acres? So how many people are you going to need? 430 00:19:28,860 --> 00:19:33,500 What are the experience of the folks you're working with? 431 00:19:33,500 --> 00:19:37,610 What's your experience both in the sugarbush, 432 00:19:37,610 --> 00:19:40,010 but also as importantly, 433 00:19:40,010 --> 00:19:43,370 what's your business knowledge and your business skills 434 00:19:43,370 --> 00:19:46,140 and which of these areas might you need 435 00:19:46,140 --> 00:19:50,260 to get some education and improve your skills in? 436 00:19:50,260 --> 00:19:51,230 It's important to make sure 437 00:19:51,230 --> 00:19:54,100 you have a good record keeping system. 438 00:19:54,100 --> 00:19:55,070 When you're selling sap, 439 00:19:55,070 --> 00:19:57,810 it's important to keep track of all the sap 440 00:19:57,810 --> 00:20:00,333 that you're delivering and the sugar content. 441 00:20:01,210 --> 00:20:03,440 It's always good to start your business with an idea 442 00:20:03,440 --> 00:20:05,150 of what type of business entity 443 00:20:05,150 --> 00:20:07,590 you might wanna be from the get-go 444 00:20:07,590 --> 00:20:09,483 rather than deciding later, 445 00:20:11,490 --> 00:20:14,400 as well as putting together a business strategy, 446 00:20:14,400 --> 00:20:18,250 simple mission, vision, goals here. 447 00:20:18,250 --> 00:20:21,060 Why are you in business? 448 00:20:21,060 --> 00:20:22,810 I alluded to that a little earlier. 449 00:20:24,970 --> 00:20:25,803 What's your thoughts 450 00:20:25,803 --> 00:20:28,260 of where you want your business to be in the future? 451 00:20:29,730 --> 00:20:31,890 And what are your more immediate goals 452 00:20:31,890 --> 00:20:36,890 as far as how many taps, how many acres. 453 00:20:36,970 --> 00:20:40,640 And then this leads to various metrics 454 00:20:40,640 --> 00:20:42,400 or business benchmarks. 455 00:20:42,400 --> 00:20:45,853 What's your target production rates? 456 00:20:47,350 --> 00:20:50,000 Production rates and the benchmark project 457 00:20:50,000 --> 00:20:52,670 that we're working on range from about a quarter per tap, 458 00:20:52,670 --> 00:20:55,070 which would be around 10 gallons of sap per tap 459 00:20:55,070 --> 00:20:59,393 up to over a half a gallon, which is 20 gallons. 460 00:21:00,390 --> 00:21:04,190 So looking at targets that you want to achieve 461 00:21:04,190 --> 00:21:08,410 and that are possible to achieve with your given resource. 462 00:21:08,410 --> 00:21:11,320 What's the forest diversity currently? 463 00:21:11,320 --> 00:21:13,450 What's a target goal for that diversity 464 00:21:13,450 --> 00:21:15,300 as you manage your forest? 465 00:21:15,300 --> 00:21:18,080 What other types of business metrics might you have? 466 00:21:18,080 --> 00:21:22,800 Profitability metrics, revenue amounts, 467 00:21:22,800 --> 00:21:24,390 wide variety of metrics like that, 468 00:21:24,390 --> 00:21:27,883 you wanna get some of those sorted out. 469 00:21:28,880 --> 00:21:31,130 And then finally although this is something 470 00:21:31,130 --> 00:21:35,140 to look at sooner not last is mapping 471 00:21:35,140 --> 00:21:36,730 and finding maps of the sugarbush. 472 00:21:36,730 --> 00:21:39,672 You wanna make sure that the bush that you're assessing 473 00:21:39,672 --> 00:21:43,100 has well-defined boundaries, 474 00:21:43,100 --> 00:21:45,350 or at least that you know how to define them 475 00:21:45,350 --> 00:21:48,620 to get started when you're doing maybe a desktop analysis, 476 00:21:48,620 --> 00:21:53,593 sometimes you can find tax maps online or at town offices. 477 00:21:55,140 --> 00:21:56,260 If you are in Vermont, 478 00:21:56,260 --> 00:22:00,010 Vermont has the Vermont Agency of Natural Resources Atlas. 479 00:22:00,010 --> 00:22:04,390 Other site states might have similar resources 480 00:22:04,390 --> 00:22:07,623 there you can get a lot of information about your land, 481 00:22:08,810 --> 00:22:13,210 tax maps at least in Vermont are notoriously inaccurate. 482 00:22:13,210 --> 00:22:15,790 So I wouldn't use them for boundaries specifically, 483 00:22:15,790 --> 00:22:20,110 but it can give you a sense of what the land 484 00:22:20,110 --> 00:22:23,773 you're looking at the parcel size is. 485 00:22:24,648 --> 00:22:26,820 And eventually you're gonna want to find surveys, 486 00:22:26,820 --> 00:22:29,065 and you're gonna really want to find out 487 00:22:29,065 --> 00:22:32,960 where your boundaries are when you start to get serious 488 00:22:32,960 --> 00:22:36,620 about the sugarbush and laying out your lines. 489 00:22:36,620 --> 00:22:38,763 So I know that was kind of kind of quick, 490 00:22:40,980 --> 00:22:43,770 but we'll send this out to you 491 00:22:43,770 --> 00:22:48,770 and I'm happy to answer any questions on this as well. 492 00:22:49,530 --> 00:22:53,170 Okay, we were able to get back here pretty easily. 493 00:22:53,170 --> 00:22:56,090 Okay, so, it said that business 494 00:22:56,090 --> 00:22:58,580 is all about relationships and it is. 495 00:22:58,580 --> 00:23:01,050 As a business owner, you manage employees 496 00:23:01,050 --> 00:23:04,610 or oftentimes in the maple business volunteers, 497 00:23:04,610 --> 00:23:06,660 you interact with customers. 498 00:23:06,660 --> 00:23:08,820 sap businesses are built on 499 00:23:08,820 --> 00:23:10,930 business to business relationships, 500 00:23:10,930 --> 00:23:13,400 relationships with sap buyers, with suppliers, 501 00:23:13,400 --> 00:23:15,610 with equipment dealers and all these relationships 502 00:23:15,610 --> 00:23:18,193 must be established and maintained. 503 00:23:19,360 --> 00:23:21,780 There are tools that maplemanager.org 504 00:23:21,780 --> 00:23:23,650 to understand the important consideration 505 00:23:23,650 --> 00:23:26,960 of these relationships and to formalize these relationships. 506 00:23:26,960 --> 00:23:29,533 Size of your operation is a consideration. 507 00:23:30,650 --> 00:23:32,790 Smaller operations with less at stake 508 00:23:32,790 --> 00:23:34,700 may operate more on handshake deals 509 00:23:34,700 --> 00:23:36,960 whereas larger businesses may want the security 510 00:23:36,960 --> 00:23:40,200 of more formal contractual relationships. 511 00:23:40,200 --> 00:23:42,510 I sell all my sap on a handshake 512 00:23:43,670 --> 00:23:46,823 and I try to negotiate prices before the season starts. 513 00:23:48,350 --> 00:23:52,440 So once we found some trees and we have assessed them, 514 00:23:52,440 --> 00:23:55,993 now we've need to find and develop our markets. 515 00:23:58,450 --> 00:24:00,920 As mentioned, selling sap is a B2B business, 516 00:24:00,920 --> 00:24:03,410 meaning that your buyers or other businesses. 517 00:24:03,410 --> 00:24:04,450 Finding these buyers, 518 00:24:04,450 --> 00:24:07,860 developing market access is of primary importance. 519 00:24:07,860 --> 00:24:10,230 As identified on our assessment tool, 520 00:24:10,230 --> 00:24:12,360 you start by contacting all processors 521 00:24:12,360 --> 00:24:14,860 within trucking distance of your sugarbush, 522 00:24:14,860 --> 00:24:16,280 likely these are the most important 523 00:24:16,280 --> 00:24:18,660 relationships to maintain. 524 00:24:18,660 --> 00:24:20,010 Buyers are going to wanna know 525 00:24:20,010 --> 00:24:21,490 that you can produce good sap 526 00:24:21,490 --> 00:24:23,270 and they may reject poor quality 527 00:24:23,270 --> 00:24:26,260 or low sugar content sap. 528 00:24:26,260 --> 00:24:29,420 Look for processors who utilize reverse osmosis. 529 00:24:29,420 --> 00:24:31,757 They're going to be able to process more sap 530 00:24:31,757 --> 00:24:33,923 and sap with lower sugar content. 531 00:24:34,780 --> 00:24:36,280 Once buyers are identified, 532 00:24:36,280 --> 00:24:39,630 negotiating sales is paramount because when the sap flows, 533 00:24:39,630 --> 00:24:40,920 you need to have it delivered 534 00:24:40,920 --> 00:24:44,860 or picked up timely before quality degrades. 535 00:24:44,860 --> 00:24:49,040 Pricing needs to consider who is transporting the sap. 536 00:24:49,040 --> 00:24:51,633 There are many resources on pricing sap. 537 00:24:53,390 --> 00:24:55,170 From the Bascom's price sheet. 538 00:24:55,170 --> 00:24:58,480 Bascom is a big purchaser here in new England, 539 00:24:58,480 --> 00:25:03,480 they're in New Hampshire, to the Ohio calculator 540 00:25:03,830 --> 00:25:06,310 lots of info on pricing sap is available, 541 00:25:06,310 --> 00:25:07,230 and this is great. 542 00:25:07,230 --> 00:25:10,580 And it highlights the most important factor in pricing, 543 00:25:10,580 --> 00:25:12,970 and that's that there is no set price for sap. 544 00:25:12,970 --> 00:25:14,940 You must agree on pricing with your buyer 545 00:25:14,940 --> 00:25:16,860 based on both of your needs, 546 00:25:16,860 --> 00:25:20,340 therefore it's essential that you know your costs. 547 00:25:20,340 --> 00:25:24,060 And I came across a great quote from Mike Farrell here, 548 00:25:24,060 --> 00:25:27,783 who was a researcher with Cornell. 549 00:25:29,493 --> 00:25:30,640 And he says, 550 00:25:30,640 --> 00:25:33,260 the person selling sap will have a greater incentive 551 00:25:33,260 --> 00:25:34,787 to gather and deliver more sap, 552 00:25:34,787 --> 00:25:36,460 and more people will be enticed 553 00:25:36,460 --> 00:25:38,740 to get into the sap selling business 554 00:25:38,740 --> 00:25:41,050 when both the person selling sap 555 00:25:41,050 --> 00:25:44,010 and the person buying or processing sap can earn 556 00:25:44,010 --> 00:25:47,240 a reasonable return by collaborating. 557 00:25:47,240 --> 00:25:49,163 This is a win-win for everyone. 558 00:25:50,390 --> 00:25:53,900 And that points to the importance of knowing your costs, 559 00:25:53,900 --> 00:25:56,030 because you wanna make enough money 560 00:25:56,900 --> 00:25:58,370 and know where your costs are, 561 00:25:58,370 --> 00:26:03,020 so that you can negotiate those prices reasonably 562 00:26:03,020 --> 00:26:05,490 and fairly with your buyers. 563 00:26:05,490 --> 00:26:07,340 Another important element of pricing 564 00:26:07,340 --> 00:26:09,413 and selling is delivery costs. 565 00:26:10,270 --> 00:26:14,310 To assist in analyzing these costs on a per load basis, 566 00:26:14,310 --> 00:26:18,500 we developed the sap haul profit calculator. 567 00:26:18,500 --> 00:26:21,380 This tool is useful on a micro level, 568 00:26:21,380 --> 00:26:22,840 looking at the potential profit 569 00:26:22,840 --> 00:26:25,810 of selling sap on a load by load basis. 570 00:26:25,810 --> 00:26:26,990 And it can help you decide 571 00:26:26,990 --> 00:26:29,383 when delivery is no longer profitable. 572 00:26:30,410 --> 00:26:33,930 This calculator is found at maple manager, 573 00:26:33,930 --> 00:26:35,710 and I'm gonna go in here 574 00:26:36,580 --> 00:26:40,350 and we're gonna look at this as well. 575 00:26:40,350 --> 00:26:42,140 So it's a pretty simple calculator here. 576 00:26:42,140 --> 00:26:44,800 We've got four steps. 577 00:26:44,800 --> 00:26:48,940 First off, put the name of your operation in there. 578 00:26:48,940 --> 00:26:52,030 I live on the side of terrible mountain 579 00:26:52,030 --> 00:26:54,100 and all my trees are on terrible mountains, 580 00:26:54,100 --> 00:26:57,660 so I call it terrible mountain maple. 581 00:26:57,660 --> 00:27:00,030 Here's the price received per gallon. 582 00:27:00,030 --> 00:27:01,623 We talked about this, 583 00:27:03,060 --> 00:27:05,400 we've got two sap pricing guides linked here 584 00:27:05,400 --> 00:27:07,010 to help you out. 585 00:27:07,010 --> 00:27:11,953 The first one here that we'll look at are these cards, 586 00:27:12,870 --> 00:27:16,540 and we have bulk prices of syrup across the top 587 00:27:16,540 --> 00:27:19,100 on this card, and then sugar content 588 00:27:19,100 --> 00:27:21,320 here down the left hand side. 589 00:27:21,320 --> 00:27:24,680 This is kind of earlier, not super early in the season, 590 00:27:24,680 --> 00:27:28,423 but early enough that we're still getting nice sweet sap, 591 00:27:29,330 --> 00:27:34,330 and we negotiated our bulk price for this sap is at 230. 592 00:27:37,640 --> 00:27:41,600 And I think that says 36 cents. I got to get my glasses. 593 00:27:41,600 --> 00:27:46,210 Yeah, 36 cents, a gallon for that sap. 594 00:27:46,210 --> 00:27:48,780 So we're gonna go back here, 595 00:27:48,780 --> 00:27:53,780 we're gonna put in 36 cents. 596 00:27:54,380 --> 00:27:56,630 And then the size of the tank you're hauling with, 597 00:27:56,630 --> 00:28:00,500 my tank is not as big as the one on the truck on the slide 598 00:28:00,500 --> 00:28:01,900 that we were looking at. 599 00:28:01,900 --> 00:28:06,900 I've only got 320 gallons that I can haul. 600 00:28:07,120 --> 00:28:08,920 So that's a full load. 601 00:28:08,920 --> 00:28:13,530 The second step is putting in the price of your equipment 602 00:28:13,530 --> 00:28:15,550 that's involved in transporting sap. 603 00:28:15,550 --> 00:28:20,360 I've got a truck costs to be $25,000. 604 00:28:20,360 --> 00:28:21,993 I did have a loan on it. 605 00:28:23,180 --> 00:28:25,893 So I've got some interests that I need to pay. 606 00:28:26,980 --> 00:28:29,423 There's insurance costs for the truck. 607 00:28:31,830 --> 00:28:35,313 There's various fees, registration, inspection, 608 00:28:36,550 --> 00:28:39,770 repair costs, $2,500, 609 00:28:39,770 --> 00:28:44,770 and then annual maintenance say 1000 bucks 610 00:28:44,810 --> 00:28:46,863 for brakes and tires. 611 00:28:48,070 --> 00:28:49,260 And then I use the pump. 612 00:28:49,260 --> 00:28:50,620 If you have a pump or two, 613 00:28:50,620 --> 00:28:53,310 you could put those prices in here. 614 00:28:53,310 --> 00:28:55,950 I got this pump for 500. 615 00:28:55,950 --> 00:28:59,600 There's no interest and there's no insurance 616 00:28:59,600 --> 00:29:00,800 and there's no fees. 617 00:29:00,800 --> 00:29:05,340 It does require some repair work 618 00:29:05,340 --> 00:29:10,140 and or purchasing of fittings every year, 619 00:29:10,140 --> 00:29:11,810 and it's a gas powered pump, 620 00:29:11,810 --> 00:29:13,963 so it needs some oil changes. 621 00:29:14,880 --> 00:29:17,400 And then of course you need a tank. 622 00:29:17,400 --> 00:29:21,480 My 320 gallon tank costs 600 bucks, I believe, 623 00:29:21,480 --> 00:29:22,887 and I didn't borrow money for it 624 00:29:22,887 --> 00:29:27,887 and I don't insure it, no fees associated. 625 00:29:29,120 --> 00:29:30,280 It doesn't usually break, 626 00:29:30,280 --> 00:29:33,010 but I do use a number of sap filters. 627 00:29:33,010 --> 00:29:35,480 So I just put that here in the repair 628 00:29:36,540 --> 00:29:38,490 and then maintenance again, 629 00:29:38,490 --> 00:29:40,830 there seems there's always a fitting 630 00:29:40,830 --> 00:29:45,830 or to either for the tank or for some of the hoses. 631 00:29:47,370 --> 00:29:48,460 And then there's an option here 632 00:29:48,460 --> 00:29:51,190 if you have other equipment that you want to include, 633 00:29:51,190 --> 00:29:54,580 you click on this and you can enter other equipment, 634 00:29:54,580 --> 00:29:58,763 but I don't have that, so we won't use that. 635 00:29:59,790 --> 00:30:02,203 Next page is the delivery. 636 00:30:03,890 --> 00:30:05,547 So here last year when I was doing this, 637 00:30:05,547 --> 00:30:09,580 the gas prices were down under $2 a gallon. 638 00:30:09,580 --> 00:30:14,003 Now they're right around three bucks a gallon, 639 00:30:15,770 --> 00:30:17,323 roundtrip mileage, 640 00:30:18,300 --> 00:30:21,480 20 miles here gets me to Londonderry and back, 641 00:30:21,480 --> 00:30:25,483 which is Jim and Josie's sugar house where I deliver sap. 642 00:30:26,630 --> 00:30:29,380 My truck gets, oh, I guess, on a good day 643 00:30:29,380 --> 00:30:34,380 we can get 10 miles per gallon, especially with it loaded. 644 00:30:37,140 --> 00:30:40,393 I drive about 5,000 miles a year. 645 00:30:41,600 --> 00:30:44,853 And of those about 1000 of them are maple miles. 646 00:30:45,750 --> 00:30:47,320 And what this is figuring out 647 00:30:47,320 --> 00:30:49,630 is all the costs associated with the truck 648 00:30:49,630 --> 00:30:53,150 and the equipment and then the specific trip. 649 00:30:53,150 --> 00:30:57,613 And then our final step here is to look at labor. 650 00:30:59,000 --> 00:31:00,960 I put 22 bucks in here, 651 00:31:00,960 --> 00:31:04,460 if you're paying taxes or any benefits 652 00:31:04,460 --> 00:31:05,530 or anything like that, 653 00:31:05,530 --> 00:31:08,400 that's equal somewhere around maybe 16 bucks an hour 654 00:31:08,400 --> 00:31:12,450 to the employee and or yourself. 655 00:31:12,450 --> 00:31:16,250 And even if you're doing this driving yourself, which I do, 656 00:31:16,250 --> 00:31:18,400 you wanna have a value in here 657 00:31:18,400 --> 00:31:20,670 'cause you wanna value your time. 658 00:31:20,670 --> 00:31:23,530 And then I can load the truck pretty quickly. 659 00:31:23,530 --> 00:31:25,800 It takes about 15 minutes to load it, 660 00:31:25,800 --> 00:31:27,490 sometimes a little quicker 661 00:31:27,490 --> 00:31:30,140 depending on how the pump is working. 662 00:31:30,140 --> 00:31:33,393 It's 10 minutes to Londonderry, 663 00:31:35,860 --> 00:31:37,800 takes about 10 minutes to unload 664 00:31:39,230 --> 00:31:43,333 and then another 10 minutes or so to get home. 665 00:31:44,840 --> 00:31:49,250 There, submit the information and we get a nice report here. 666 00:31:49,250 --> 00:31:53,030 And this lists out your fixed expenses 667 00:31:53,030 --> 00:31:55,020 and your variable expenses. 668 00:31:55,020 --> 00:31:57,940 It takes out the part that's just for maple. 669 00:31:57,940 --> 00:32:00,200 These are your equipment expenses, 670 00:32:00,200 --> 00:32:03,763 but you don't use the truck entirely for maple. 671 00:32:05,160 --> 00:32:06,910 And so it splits that out 672 00:32:06,910 --> 00:32:10,350 and then it can give you a fixed cost per load. 673 00:32:10,350 --> 00:32:11,520 And you can also get a sense 674 00:32:11,520 --> 00:32:13,623 of how much it's costing per mile. 675 00:32:14,840 --> 00:32:17,823 And then similar thing here with your variable expenses, 676 00:32:18,940 --> 00:32:22,520 your equipment, the part that is associated with maple 677 00:32:24,789 --> 00:32:26,530 and at the bottom it nets it all out. 678 00:32:26,530 --> 00:32:30,790 Here's the value of this load, $115. 679 00:32:30,790 --> 00:32:33,160 Typically for me a tank of sap 680 00:32:33,160 --> 00:32:37,140 is worth something like 100 bucks. 681 00:32:37,140 --> 00:32:41,220 So the costs of 57 and you got 57 profit. 682 00:32:41,220 --> 00:32:42,543 So that's a good load. 683 00:32:43,380 --> 00:32:46,100 Now I wanna go back and we'll do a revision on this 684 00:32:46,100 --> 00:32:48,480 and see how this can help you 685 00:32:48,480 --> 00:32:51,990 decide when maybe you shouldn't be delivering a load. 686 00:32:51,990 --> 00:32:56,990 Now let's say that the season is towards the end, 687 00:32:57,590 --> 00:32:59,570 the sap isn't as good, 688 00:32:59,570 --> 00:33:03,710 and we're getting 20 cents a gallon for it 689 00:33:03,710 --> 00:33:08,710 after we looked on our sap pricing guide, 690 00:33:08,860 --> 00:33:11,231 and I can't collect together a whole load, 691 00:33:11,231 --> 00:33:14,523 the trees don't always give me a whole tank full of sap. 692 00:33:15,661 --> 00:33:19,980 And so this load only has 200 gallons in it 693 00:33:20,820 --> 00:33:22,440 and we'll just change those things. 694 00:33:22,440 --> 00:33:26,480 Everything else is staying the same, 695 00:33:26,480 --> 00:33:27,923 and we'll submit that. 696 00:33:29,190 --> 00:33:32,090 And we can see that suddenly 697 00:33:32,090 --> 00:33:34,810 we're looking at losing money on that load. 698 00:33:34,810 --> 00:33:38,140 And even if we were paying ourselves this 16 bucks 699 00:33:39,580 --> 00:33:41,050 and thinking we're making a little money there, 700 00:33:41,050 --> 00:33:42,850 'cause we're selling, paying ourselves, 701 00:33:42,850 --> 00:33:44,183 we're still losing money. 702 00:33:45,490 --> 00:33:48,820 So that's how this tool can help you decide 703 00:33:48,820 --> 00:33:51,820 when it makes sense to deliver sap 704 00:33:51,820 --> 00:33:53,240 and when you should can stop. 705 00:33:53,240 --> 00:33:56,950 It also can help you estimate how many loads you might have 706 00:33:56,950 --> 00:34:01,343 and what your ultimate productive potential is. 707 00:34:02,330 --> 00:34:06,610 So that's over there at maplemanagement.org. 708 00:34:06,610 --> 00:34:09,410 It's a great resource 709 00:34:10,430 --> 00:34:14,410 and I've got a little computer glitch here. 710 00:34:14,410 --> 00:34:15,810 Okay, I just solved it. 711 00:34:15,810 --> 00:34:18,580 All right, so now I can take some more questions 712 00:34:18,580 --> 00:34:23,580 if we had any on that material that we just covered 713 00:34:23,710 --> 00:34:24,760 - [Mark Cannella] Yeah, Chris, this is Mark. 714 00:34:24,760 --> 00:34:28,250 I'm gonna read a couple off the chat box here 715 00:34:28,250 --> 00:34:29,790 and folks feel free to type in more, 716 00:34:29,790 --> 00:34:32,520 I think for ease of IT here, 717 00:34:32,520 --> 00:34:34,180 I'm not gonna unlock people's microphones 718 00:34:34,180 --> 00:34:37,310 until we get to the end. 719 00:34:37,310 --> 00:34:38,610 I think they'll be smoother that way. 720 00:34:38,610 --> 00:34:40,020 So type of them in if you've got them 721 00:34:40,020 --> 00:34:42,750 and then we will open up mics later. 722 00:34:42,750 --> 00:34:43,940 Chris, here's a question. 723 00:34:43,940 --> 00:34:46,930 Can you go over some methods use to estimate capacity 724 00:34:46,930 --> 00:34:49,420 or volume of a lot? 725 00:34:49,420 --> 00:34:51,780 I'm assuming that's a woodlot or sugarbush. 726 00:34:51,780 --> 00:34:54,980 - [Chris Lindgren] Yeah, and so that's where the assessment 727 00:34:54,980 --> 00:34:55,813 I was getting at. 728 00:34:55,813 --> 00:34:57,690 And we're gonna look at that in a little detail next, 729 00:34:57,690 --> 00:35:00,763 so that's a good leading question. 730 00:35:01,740 --> 00:35:05,760 But once you determine the average number of taps 731 00:35:05,760 --> 00:35:08,320 that you have per acre in your lot, 732 00:35:08,320 --> 00:35:11,793 and then the number of acres in that lot, 733 00:35:12,800 --> 00:35:15,550 you can get a sense of the total taps. 734 00:35:15,550 --> 00:35:19,590 And then based on that, as I mentioned, kind of quickly, 735 00:35:19,590 --> 00:35:21,820 and we're gonna look at it in a little more detail, 736 00:35:21,820 --> 00:35:23,390 you can kind of expect somewhere 737 00:35:23,390 --> 00:35:28,390 between 10 gallons to 20 gallons of sap per tap annually. 738 00:35:31,680 --> 00:35:34,270 And that ends up to be a syrup equivalent 739 00:35:34,270 --> 00:35:39,270 of around a quarter per tap to a half a gallon per tap, 740 00:35:39,290 --> 00:35:42,770 which is the range that we see in the benchmark. 741 00:35:42,770 --> 00:35:43,830 Does that answer the question? 742 00:35:43,830 --> 00:35:47,950 That's kind of a quick dirty way to get an estimation 743 00:35:47,950 --> 00:35:52,950 of how much sap that sugarbush can potentially produce. 744 00:35:53,970 --> 00:35:55,700 And there's a lot of factors in there. 745 00:35:55,700 --> 00:36:00,670 Not every sugarbush can reach that top number 746 00:36:00,670 --> 00:36:04,340 of a half a gallon per tap. 747 00:36:04,340 --> 00:36:06,780 - [Mark Cannella] Yeah, and Chris, I'll just put a plug in 748 00:36:06,780 --> 00:36:08,370 before I read this next question. 749 00:36:08,370 --> 00:36:10,060 That is a, I think, a reasonable way 750 00:36:10,060 --> 00:36:11,340 to approach it quick and dirty. 751 00:36:11,340 --> 00:36:14,290 And for folks that are interested, 752 00:36:14,290 --> 00:36:15,770 two weeks ago, Mark Isselhardt, 753 00:36:15,770 --> 00:36:19,060 our extension specialist here did a webinar just like this 754 00:36:19,060 --> 00:36:22,070 on the specific sugarbush inventory methods, 755 00:36:22,070 --> 00:36:24,771 forestry methods for assessing the lot. 756 00:36:24,771 --> 00:36:28,260 Our video will be posted probably the next week 757 00:36:28,260 --> 00:36:31,320 or two on that session if you go back to the website, 758 00:36:31,320 --> 00:36:32,550 and then as Chris said, 759 00:36:32,550 --> 00:36:33,920 and once you get your task per acre 760 00:36:33,920 --> 00:36:37,380 and you can come up with a kind of a basic yield estimate, 761 00:36:37,380 --> 00:36:39,790 you can do those factors. 762 00:36:39,790 --> 00:36:41,840 Chris, I'm gonna read one more here. 763 00:36:41,840 --> 00:36:46,390 Dave asks, on average what is the maximum number of taps 764 00:36:46,390 --> 00:36:50,330 one person could handle in a sap selling business? 765 00:36:50,330 --> 00:36:51,562 - [Chris Lindgren] Well, that's a great question. 766 00:36:51,562 --> 00:36:53,533 It depends on how energetic you are, 767 00:36:55,720 --> 00:36:58,110 and how much time that you have to devote to it. 768 00:36:58,110 --> 00:37:00,210 So I do this part-time, 769 00:37:00,210 --> 00:37:05,210 I can pretty easily handle the 700 taps that I have. 770 00:37:06,960 --> 00:37:10,380 I can get out there and tap them pretty lazily 771 00:37:10,380 --> 00:37:12,220 in a couple of days. 772 00:37:12,220 --> 00:37:15,590 I'm looking to try to expand up to around 1000 taps. 773 00:37:15,590 --> 00:37:17,000 I think I'll be able to handle that. 774 00:37:17,000 --> 00:37:22,000 I think that if you were working at it full time 775 00:37:22,830 --> 00:37:27,830 at least during the season, you could handle, no, 776 00:37:27,870 --> 00:37:30,040 I guess I'm gonna kind of throw a number out there 777 00:37:30,040 --> 00:37:31,470 that seems good. 778 00:37:31,470 --> 00:37:32,880 And I'm curious if anyone, Mark, 779 00:37:32,880 --> 00:37:34,600 if you or anyone else has any thoughts, 780 00:37:34,600 --> 00:37:38,490 but I think you could probably handle four or 5,000 taps. 781 00:37:38,490 --> 00:37:41,190 Now, again, the reason for that assessment sheet 782 00:37:41,190 --> 00:37:44,130 is it's gonna depend on so many factors. 783 00:37:44,130 --> 00:37:47,670 What's the lay of the land. Is it really steep? 784 00:37:47,670 --> 00:37:50,870 Can you get motorized equipment in there, 785 00:37:50,870 --> 00:37:54,560 like tracked four wheelers to help you or not? 786 00:37:54,560 --> 00:37:57,450 Is it wet? How easy is the move around? 787 00:37:57,450 --> 00:37:59,370 What's your trail network like? 788 00:37:59,370 --> 00:38:02,750 So there's a lot of things that will influence that 789 00:38:02,750 --> 00:38:07,302 and make it easier to handle more taps or fewer taps. 790 00:38:07,302 --> 00:38:12,302 And they're also, you can invest in better trail networks. 791 00:38:12,440 --> 00:38:16,170 You can invest in better collection systems as well. 792 00:38:16,170 --> 00:38:18,430 Once you have your system set up, 793 00:38:18,430 --> 00:38:20,150 if all things are working good 794 00:38:20,150 --> 00:38:22,810 and your sap can come to a central location, 795 00:38:22,810 --> 00:38:24,460 it's easier to handle, 796 00:38:24,460 --> 00:38:26,040 but you still need to be able to get out there 797 00:38:26,040 --> 00:38:30,480 and fix things that go wrong because that's what happens 798 00:38:30,480 --> 00:38:32,380 things always go wrong. 799 00:38:32,380 --> 00:38:33,690 Lines are always breaking. 800 00:38:33,690 --> 00:38:34,970 You gotta find leaks 801 00:38:36,160 --> 00:38:38,270 and you need to be able to get throughout the sugarbush. 802 00:38:38,270 --> 00:38:39,490 So I think four 803 00:38:39,490 --> 00:38:42,383 or 5,000 taps could be handled pretty easily. 804 00:38:43,979 --> 00:38:45,010 - [Mark Cannella] Chris, I'll just chime in. 805 00:38:45,010 --> 00:38:46,640 We got up and we got a comment from Brian here 806 00:38:46,640 --> 00:38:49,050 in the chat box also mentioning, saying, 807 00:38:49,050 --> 00:38:54,010 he does 8,500 taps, and I do 8,500 myself 808 00:38:54,010 --> 00:38:55,780 and it works pretty well. 809 00:38:55,780 --> 00:38:57,930 And while you keep presenting, 810 00:38:57,930 --> 00:38:59,160 I'll go back to those numbers 811 00:38:59,160 --> 00:39:00,690 'cause you did a presentation in Middlebury 812 00:39:00,690 --> 00:39:02,150 a couple of years ago 813 00:39:02,150 --> 00:39:04,700 where we had actually broken down some hourlies, 814 00:39:04,700 --> 00:39:07,290 and if I can find them 815 00:39:07,290 --> 00:39:10,944 I'll try to gather them before the session closes out. 816 00:39:10,944 --> 00:39:11,883 - Chris Lindgren] Yeah, we're gonna look at that 817 00:39:11,883 --> 00:39:12,965 a little bit next. 818 00:39:12,965 --> 00:39:14,980 I don't know if we have right the same detail 819 00:39:14,980 --> 00:39:15,813 or not, but that. 820 00:39:15,813 --> 00:39:17,130 - [Mark Cannella] Okay, I'll hold on that. 821 00:39:17,130 --> 00:39:18,910 And so I'll let you keep going, Chris, 822 00:39:18,910 --> 00:39:20,090 that's it for the chat box 823 00:39:20,090 --> 00:39:23,940 and just about 7:45 here to give you a gauge on time. 824 00:39:23,940 --> 00:39:27,460 - [Chris Lindgren] Okay, I think we're doing pretty good. 825 00:39:27,460 --> 00:39:30,020 Okay, so now we're gonna look at some sap business models 826 00:39:30,020 --> 00:39:32,410 get at some of those questions you're asking. 827 00:39:32,410 --> 00:39:33,710 So a business model allows you 828 00:39:33,710 --> 00:39:35,500 to look at your potential profitability 829 00:39:35,500 --> 00:39:38,880 and production prior to jumping in head first. 830 00:39:38,880 --> 00:39:41,470 If you already have jumped in a business model analysis 831 00:39:41,470 --> 00:39:43,170 can help identify bottlenecks 832 00:39:43,170 --> 00:39:46,370 or other problems around profitability. 833 00:39:46,370 --> 00:39:50,060 A basic business model must identify Wood's resource, 834 00:39:50,060 --> 00:39:51,610 a method for generating cash, 835 00:39:51,610 --> 00:39:55,320 whether it's selling sap for cash or trading the syrup 836 00:39:55,320 --> 00:39:58,790 and selling the syrup or some combination of both, 837 00:39:58,790 --> 00:40:00,210 and then estimation of costs 838 00:40:00,210 --> 00:40:02,420 and expenses with attention to key expenses 839 00:40:02,420 --> 00:40:04,480 for startup and operations. 840 00:40:04,480 --> 00:40:06,160 Of course, as sap entrepreneurs, 841 00:40:06,160 --> 00:40:09,100 you're gonna come up with innovative solutions 842 00:40:09,100 --> 00:40:10,530 and that's gonna help you figure out 843 00:40:10,530 --> 00:40:12,023 what your business model is. 844 00:40:13,000 --> 00:40:16,052 Compared to full production sap only is less risky, 845 00:40:16,052 --> 00:40:19,580 lower barriers to entry and lower ongoing expenses. 846 00:40:19,580 --> 00:40:21,610 So now let's look at some numbers. 847 00:40:21,610 --> 00:40:22,990 The figures that we're gonna look at 848 00:40:22,990 --> 00:40:26,100 have come from the UVM Maple Benchmark project 849 00:40:26,100 --> 00:40:27,880 seven years of research, 850 00:40:27,880 --> 00:40:30,520 and that time we've collected detailed financial data, 851 00:40:30,520 --> 00:40:34,280 cost of production data from over 50 maple businesses. 852 00:40:34,280 --> 00:40:36,500 From this, we've developed useful metrics 853 00:40:36,500 --> 00:40:37,730 for planning purposes, 854 00:40:37,730 --> 00:40:40,370 and we've mined this data to better understand 855 00:40:40,370 --> 00:40:43,100 the economics of the woods part of the operation, 856 00:40:43,100 --> 00:40:45,723 and that's helped develop these business models. 857 00:40:46,810 --> 00:40:49,060 As discussed there's many ways to price sap, 858 00:40:49,060 --> 00:40:52,560 but generally it takes 40 gallons of 2% sap 859 00:40:52,560 --> 00:40:54,770 to make a gallon of syrup. 860 00:40:54,770 --> 00:40:59,100 Given bulk prices somewhere around $2 and 25 cents, 861 00:40:59,100 --> 00:41:02,150 remember that the bulk price has set the value of your sap 862 00:41:02,150 --> 00:41:06,920 and a 50 to 60% share of that going to the sap producer 863 00:41:06,920 --> 00:41:11,023 makes a gallon of sap worth something around 30 cents. 864 00:41:11,970 --> 00:41:15,410 Ranges of sap production equate to about a quarter 865 00:41:15,410 --> 00:41:19,690 or 2 3/4 quarter pounds of syrup equivalent per tap 866 00:41:19,690 --> 00:41:24,290 to 1/2 a gallon or 5 1/2 pounds of syrup equivalent per tap. 867 00:41:24,290 --> 00:41:27,220 This table shows the range of cash that could be generated 868 00:41:27,220 --> 00:41:31,370 given differing levels of productivity in the woods. 869 00:41:31,370 --> 00:41:32,800 This helps us answer 870 00:41:32,800 --> 00:41:34,950 what's the productive potential of the land 871 00:41:34,950 --> 00:41:37,330 and is it enough to make a go of it? 872 00:41:37,330 --> 00:41:38,610 These numbers, of course, 873 00:41:38,610 --> 00:41:40,010 you'll need to refine them 874 00:41:40,010 --> 00:41:41,860 for the woods that you're looking at. 875 00:41:43,170 --> 00:41:45,230 Although the trees do a lot of work for us, 876 00:41:45,230 --> 00:41:46,923 we still need to get involved. 877 00:41:47,820 --> 00:41:49,680 And the primary resource after trees 878 00:41:49,680 --> 00:41:51,480 is our labor, production labor. 879 00:41:51,480 --> 00:41:55,370 Usually much of this labor is done by the owner, by you. 880 00:41:55,370 --> 00:41:57,330 This is a major expense of your operation, 881 00:41:57,330 --> 00:41:59,960 whether you pay yourself or not, if you do not pay yourself, 882 00:41:59,960 --> 00:42:02,790 it must be considered as a non-cash expense. 883 00:42:02,790 --> 00:42:06,530 Generally owners do put in sweat equity to ease cash flow, 884 00:42:06,530 --> 00:42:09,613 but a good business model must consider the owner labor. 885 00:42:11,370 --> 00:42:15,550 And here's what Mark was talking about. 886 00:42:15,550 --> 00:42:16,940 Our benchmarks shows that 887 00:42:16,940 --> 00:42:19,460 it takes about a 10th of an hour per cap, 888 00:42:19,460 --> 00:42:23,363 and these are the ongoing wood expenses during the season, 889 00:42:24,870 --> 00:42:26,293 not the install, 890 00:42:27,180 --> 00:42:31,870 here's the breakdown of 100 hours for 1000 taps, 891 00:42:31,870 --> 00:42:36,870 500 hours for 500 taps and the equivalent labor expenses. 892 00:42:40,830 --> 00:42:42,940 So if you net these amounts 893 00:42:42,940 --> 00:42:47,940 out of your potential revenue generation up top, 894 00:42:49,210 --> 00:42:52,880 you get these ranges of a remainder 895 00:42:52,880 --> 00:42:54,893 for operations and investment. 896 00:42:56,260 --> 00:42:57,570 Now these are labor estimates, 897 00:42:57,570 --> 00:43:00,560 do not include business management or delivery, 898 00:43:00,560 --> 00:43:01,980 but you can see from this spread 899 00:43:01,980 --> 00:43:03,280 that there is profit potential 900 00:43:03,280 --> 00:43:05,450 and efficient productive operations 901 00:43:05,450 --> 00:43:07,530 and there is economies in scale. 902 00:43:07,530 --> 00:43:10,490 These remainder figures are estimates of cash available 903 00:43:10,490 --> 00:43:12,660 for operations and investments. 904 00:43:12,660 --> 00:43:15,360 This simple model shows why productive taps are a must 905 00:43:15,360 --> 00:43:18,440 for a commercially viable sap enterprise. 906 00:43:18,440 --> 00:43:19,740 Producing a quality sap 907 00:43:19,740 --> 00:43:23,410 and delivering a timely takes ongoing work and investment. 908 00:43:23,410 --> 00:43:25,660 So now let's look at some of the investments. 909 00:43:27,310 --> 00:43:31,100 From simple non-powered three 16 inch setup 910 00:43:31,100 --> 00:43:33,160 to a remote generator driven system 911 00:43:33,160 --> 00:43:35,470 startup investment can vary widely, 912 00:43:35,470 --> 00:43:37,170 but no matter the system, 913 00:43:37,170 --> 00:43:39,060 a collecting and processing operation 914 00:43:39,060 --> 00:43:41,580 requires higher investment than sap only 915 00:43:41,580 --> 00:43:42,820 up to two times as much. 916 00:43:42,820 --> 00:43:45,160 And these numbers, again, come from our benchmark work 917 00:43:45,160 --> 00:43:48,680 and here on the left, these are integrated operations. 918 00:43:48,680 --> 00:43:51,080 And when we looked at wood set up, 919 00:43:51,080 --> 00:43:54,070 we had an average of summer around 30 cents per tap. 920 00:43:54,070 --> 00:43:56,950 So these show an average investment 921 00:43:56,950 --> 00:43:58,500 of about 30 bucks for a tap. 922 00:43:58,500 --> 00:44:00,700 Crudely depreciate this over 10 years, 923 00:44:00,700 --> 00:44:03,890 and you have about $3 per tap per year 924 00:44:03,890 --> 00:44:06,230 and depreciation expense. 925 00:44:06,230 --> 00:44:07,840 This is a lower cost of entry 926 00:44:08,840 --> 00:44:13,343 than getting into a fully integrated processing operation. 927 00:44:17,420 --> 00:44:19,330 And let's end with land. 928 00:44:19,330 --> 00:44:21,830 Forest land and access to maple trees. 929 00:44:21,830 --> 00:44:25,610 There's a wide range shown here with maple sap finances 930 00:44:25,610 --> 00:44:27,410 therefore selecting a good site 931 00:44:27,410 --> 00:44:29,500 and utilizing good forest management 932 00:44:29,500 --> 00:44:32,160 and sound business management in tandem 933 00:44:32,160 --> 00:44:36,700 is necessary to ensure a sustainably viable sap business. 934 00:44:36,700 --> 00:44:41,700 How long do we want to capture this investment in land? 935 00:44:42,160 --> 00:44:44,000 Let's say 10 years. 936 00:44:44,000 --> 00:44:46,480 And this is the example you're looking at, 937 00:44:46,480 --> 00:44:48,340 you're adding another dollar 20 938 00:44:48,340 --> 00:44:51,570 to $2 and 40 cents per tap a year. 939 00:44:51,570 --> 00:44:53,223 You could also rent taps, 940 00:44:54,210 --> 00:44:57,490 in Vermont lease rates range from about 50 cents 941 00:44:57,490 --> 00:45:00,850 to $3 with the highest lease rates 942 00:45:00,850 --> 00:45:04,340 in areas with great competition for sap. 943 00:45:04,340 --> 00:45:06,400 However, in Vermont the statewide average 944 00:45:06,400 --> 00:45:09,300 is about a dollar 20 per tap, 945 00:45:09,300 --> 00:45:14,080 and that's a good number for renting taps in Vermont. 946 00:45:14,080 --> 00:45:17,110 I don't know what it is in other places. 947 00:45:17,110 --> 00:45:19,870 So if you've been penciling along with this, 948 00:45:19,870 --> 00:45:23,520 you'll see that of the one to $4 per tap remaining, 949 00:45:23,520 --> 00:45:25,620 a couple slides back after labor 950 00:45:25,620 --> 00:45:27,790 most of it's gonna be invested. 951 00:45:27,790 --> 00:45:29,370 Expenses will eat up more. 952 00:45:29,370 --> 00:45:31,430 This is why most small businesses 953 00:45:31,430 --> 00:45:34,220 contribute their sweat to capitalize the business 954 00:45:34,220 --> 00:45:35,963 or what's known as sweat equity. 955 00:45:36,890 --> 00:45:40,150 With much of labor expense allocation going to secure land 956 00:45:40,150 --> 00:45:42,230 and investment capital. 957 00:45:42,230 --> 00:45:44,803 So will your sap enterprise be profitable? 958 00:45:46,140 --> 00:45:47,350 To answer this question 959 00:45:47,350 --> 00:45:50,400 the first place to start is with that assessment 960 00:45:50,400 --> 00:45:52,130 of your potential sap source, 961 00:45:52,130 --> 00:45:54,630 and how it fits with your business opportunity, 962 00:45:54,630 --> 00:45:56,330 vision and goals. 963 00:45:56,330 --> 00:45:58,570 This assessment will help identify 964 00:45:58,570 --> 00:46:00,400 business risks to mitigate 965 00:46:00,400 --> 00:46:03,813 and importantly your operations competitive advantages. 966 00:46:04,830 --> 00:46:06,410 Use this assessment tool. 967 00:46:06,410 --> 00:46:09,300 We'll send information out about this 968 00:46:10,340 --> 00:46:11,913 after tonight's presentation. 969 00:46:13,472 --> 00:46:15,820 And we all come to this industry from different directions 970 00:46:15,820 --> 00:46:17,480 and we each bring our unique strengths 971 00:46:17,480 --> 00:46:19,100 to our business position. 972 00:46:19,100 --> 00:46:21,190 There's not always a path to profitability, 973 00:46:21,190 --> 00:46:23,670 but planning will identify opportunity 974 00:46:23,670 --> 00:46:26,313 and risk helping you chart the course for success, 975 00:46:27,320 --> 00:46:28,930 and coming are more business 976 00:46:28,930 --> 00:46:31,903 and woods management resources for sap businesses. 977 00:46:32,960 --> 00:46:35,350 This is a new project 978 00:46:35,350 --> 00:46:38,250 that we will be embarking on next month, 979 00:46:38,250 --> 00:46:40,850 looking at environmental and economic benefits 980 00:46:40,850 --> 00:46:42,803 from sap business promotion. 981 00:46:44,020 --> 00:46:47,740 And here we're looking at combining forest management 982 00:46:47,740 --> 00:46:50,830 for carbon with sap production, 983 00:46:50,830 --> 00:46:55,220 look at working forests for supporting economic development 984 00:46:55,220 --> 00:46:57,300 and environmental improvement. 985 00:46:57,300 --> 00:47:00,930 For this project we are gonna create more resources, 986 00:47:00,930 --> 00:47:05,930 more tools, we're gonna add to maplemanager.org, 987 00:47:06,360 --> 00:47:09,623 a bunch of information and tools for sap businesses. 988 00:47:10,750 --> 00:47:13,520 And that's it. 989 00:47:13,520 --> 00:47:17,030 So thanks all for tuning in tonight. 990 00:47:17,030 --> 00:47:21,010 Thanks to the benchmark and to survey participants. 991 00:47:21,010 --> 00:47:22,700 All this work helps us better understand 992 00:47:22,700 --> 00:47:25,990 how to support a growing maple industry with resources, 993 00:47:25,990 --> 00:47:27,523 tools, and education. 994 00:47:29,020 --> 00:47:31,010 So, as I mentioned before, please be in touch 995 00:47:31,010 --> 00:47:35,110 if you wanna be involved in our new sap business project, 996 00:47:35,110 --> 00:47:38,630 also you can follow us on a Facebook. 997 00:47:38,630 --> 00:47:40,610 We just got a Facebook page going. 998 00:47:40,610 --> 00:47:42,370 I'm not exactly sure when you got that going, Mark, 999 00:47:42,370 --> 00:47:43,750 but I went there and visited 1000 00:47:43,750 --> 00:47:47,120 and it'll be great to get some more followers. 1001 00:47:47,120 --> 00:47:50,083 I can now take any more questions that we might have. 1002 00:47:51,950 --> 00:47:53,980 - [Mark Cannella] That's great, Chris. Nice, nice job. 1003 00:47:53,980 --> 00:47:56,010 And a lot of good information there, 1004 00:47:56,010 --> 00:47:59,320 both the mathematics side of checking profitability, 1005 00:47:59,320 --> 00:48:01,550 and then certainly the business relationships 1006 00:48:01,550 --> 00:48:03,590 and how to manage both, 1007 00:48:03,590 --> 00:48:07,513 I guess we call it negotiation and cooperation. 1008 00:48:08,350 --> 00:48:11,470 I'm gonna read one chat box here, and while I'm doing that, 1009 00:48:11,470 --> 00:48:13,830 I'm gonna hit a button that'll will enable people. 1010 00:48:13,830 --> 00:48:16,210 You should be able to unmute yourselves in a second, 1011 00:48:16,210 --> 00:48:17,703 so if you do wanna speak out, 1012 00:48:20,330 --> 00:48:22,150 I think you're gonna just have to go 1013 00:48:22,150 --> 00:48:25,020 into your ribbon there and unmute yourself manually, 1014 00:48:25,020 --> 00:48:27,260 but you should have the power to do that. 1015 00:48:27,260 --> 00:48:32,260 And Chris, while we're waiting, I do have one comment here. 1016 00:48:32,530 --> 00:48:36,680 Is the benchmark available to the general public? 1017 00:48:36,680 --> 00:48:41,400 - Yeah, we've produced benchmark reports for several years. 1018 00:48:41,400 --> 00:48:43,200 I don't know exactly where do we find those Mark? 1019 00:48:43,200 --> 00:48:45,203 Are they at maplemanager.org? 1020 00:48:46,130 --> 00:48:48,930 - Yeah, I can put a link in there. 1021 00:48:48,930 --> 00:48:51,040 I was just actually working on a link right now 1022 00:48:51,040 --> 00:48:54,310 for the sap or the checklist sheet that Chris showed. 1023 00:48:54,310 --> 00:48:57,530 I'm gonna put that in the chat box with a hyperlink. 1024 00:48:57,530 --> 00:49:01,767 It is at www.maplemanager.org, 1025 00:49:01,767 --> 00:49:03,210 but that's our kind of shortened link, 1026 00:49:03,210 --> 00:49:05,780 so you're gonna see the long one, 1027 00:49:05,780 --> 00:49:08,900 I'll put in the benchmark link as well. 1028 00:49:08,900 --> 00:49:09,950 This will bring you to, I'm sorry, 1029 00:49:09,950 --> 00:49:12,370 this will bring you to the maple resource library 1030 00:49:12,370 --> 00:49:15,090 at that website, and there's a number of documents on there, 1031 00:49:15,090 --> 00:49:20,090 so you can scroll that sheet and find your info. 1032 00:49:21,240 --> 00:49:22,670 - We have those benchmark reports, 1033 00:49:22,670 --> 00:49:27,340 I think going back to 2014, maybe is that? 1034 00:49:27,340 --> 00:49:29,240 - It sounds all right. 1035 00:49:29,240 --> 00:49:30,150 Well, we'll take a second here. 1036 00:49:30,150 --> 00:49:31,850 I think I see some typing going on 1037 00:49:33,104 --> 00:49:33,937 and wait for stuff to come in. 1038 00:49:33,937 --> 00:49:37,170 Like I said, if anyone wants to ask a question out loud, 1039 00:49:37,170 --> 00:49:40,130 you can unmute yourself up on the top ribbon, 1040 00:49:40,130 --> 00:49:42,653 find the microphone and it should be clicked off. 1041 00:49:43,840 --> 00:49:45,740 You can click it back on. 1042 00:49:45,740 --> 00:49:47,837 - [Man] Hey, Chris. I have a quick question for you. 1043 00:49:47,837 --> 00:49:49,730 I think for that presentation. 1044 00:49:49,730 --> 00:49:52,780 Say you have a tree that could accept two taps. 1045 00:49:52,780 --> 00:49:54,870 Would it be safe to multiply everything by two 1046 00:49:54,870 --> 00:49:56,920 or it doesn't correlate that way? 1047 00:49:56,920 --> 00:49:58,573 It's a fraction of that. 1048 00:49:59,800 --> 00:50:03,180 - Well, I think part of that resource assessment 1049 00:50:03,180 --> 00:50:08,170 and the presentation that Mark Isselhardt did, 1050 00:50:08,170 --> 00:50:10,410 I'm sure it goes into this in more detail, 1051 00:50:10,410 --> 00:50:12,410 but the diameter of the tree 1052 00:50:12,410 --> 00:50:15,620 will determine the number of taps that you can put in it. 1053 00:50:15,620 --> 00:50:18,080 So an important part of your sampling 1054 00:50:18,080 --> 00:50:20,540 is not just counting trees, 1055 00:50:20,540 --> 00:50:22,470 but it's looking at the size of those trees 1056 00:50:22,470 --> 00:50:24,880 and then estimating the number of taps 1057 00:50:24,880 --> 00:50:26,050 that those trees will take. 1058 00:50:26,050 --> 00:50:29,180 So that happens sampling, 1059 00:50:29,180 --> 00:50:33,740 so if you have a very even age sugar bush, 1060 00:50:33,740 --> 00:50:36,180 and you know all the trees are more or less the same size, 1061 00:50:36,180 --> 00:50:39,350 you could count the trees and then double the taps, 1062 00:50:39,350 --> 00:50:41,590 but that's unusual. 1063 00:50:41,590 --> 00:50:42,590 You're gonna have a mix of trees. 1064 00:50:42,590 --> 00:50:43,890 Usually you're gonna have maples, 1065 00:50:43,890 --> 00:50:45,160 hopefully that are coming along 1066 00:50:45,160 --> 00:50:47,080 that you're not gonna tap. 1067 00:50:47,080 --> 00:50:49,030 We're gonna wait a few years for, 1068 00:50:49,030 --> 00:50:50,470 then you're gonna have some maples, 1069 00:50:50,470 --> 00:50:51,867 that'll take a single tap, 1070 00:50:51,867 --> 00:50:53,437 and then some that will take two. 1071 00:50:53,437 --> 00:50:55,203 Did that help get at your question? 1072 00:50:56,380 --> 00:50:59,010 - [Man] Yes, thank you, but so yield wise, 1073 00:50:59,010 --> 00:51:01,780 let's say a tree is big enough to accept two taps. 1074 00:51:01,780 --> 00:51:03,820 Is that yield truly double 1075 00:51:03,820 --> 00:51:08,820 than tapping you only once or it doesn't work that way. 1076 00:51:09,180 --> 00:51:10,500 - Well, that's a great question. 1077 00:51:10,500 --> 00:51:12,940 And there's actually not a simple answer to that. 1078 00:51:12,940 --> 00:51:16,260 It depends somewhat on your vacuum, 1079 00:51:16,260 --> 00:51:17,700 your sort of your collection system. 1080 00:51:17,700 --> 00:51:20,570 So whether it's buckets, whether it's high vacuum, 1081 00:51:20,570 --> 00:51:25,150 with the new super high vacuum systems I've heard, 1082 00:51:25,150 --> 00:51:26,600 and I haven't read a lot about this, 1083 00:51:26,600 --> 00:51:29,940 that you don't necessarily get double production 1084 00:51:29,940 --> 00:51:32,140 just from adding a second tap. 1085 00:51:32,140 --> 00:51:37,140 There's actually some produce who won't even put two taps in 1086 00:51:37,430 --> 00:51:42,430 when they have that high volume on their high vacuum 1087 00:51:44,600 --> 00:51:46,850 on their sugarbush, because they don't think 1088 00:51:46,850 --> 00:51:50,420 that that the trade-off between damage to the tree 1089 00:51:50,420 --> 00:51:53,262 as far as creating that non-conductive wood 1090 00:51:53,262 --> 00:51:55,840 and increase sap they don't think is worth it. 1091 00:51:55,840 --> 00:51:59,340 So I think there's probably a bunch of research out there, 1092 00:51:59,340 --> 00:52:00,470 but the simple answer 1093 00:52:00,470 --> 00:52:05,270 is you're not necessarily going to double your production 1094 00:52:05,270 --> 00:52:07,193 just by doubling your tap holes. 1095 00:52:08,810 --> 00:52:10,060 - [Man] Great. Thank you. 1096 00:52:11,370 --> 00:52:14,330 - Chris, I'll read one came in. 1097 00:52:14,330 --> 00:52:17,663 Is the bulk price for syrup available somewhere? 1098 00:52:18,900 --> 00:52:21,570 - Well, it's different depending on the buyers. 1099 00:52:21,570 --> 00:52:25,700 You need to find the bulk buyers who are in your area. 1100 00:52:25,700 --> 00:52:28,080 I mentioned Bascom around here. 1101 00:52:28,080 --> 00:52:30,870 They do usually put out 1102 00:52:30,870 --> 00:52:35,530 what their bulk prices are as do a lot of other buyers. 1103 00:52:35,530 --> 00:52:40,020 Oftentimes that their pricing is built around 1104 00:52:40,020 --> 00:52:43,350 what the Canadians set as their price. 1105 00:52:43,350 --> 00:52:46,830 So, a good place to look is that the Canadians 1106 00:52:46,830 --> 00:52:49,010 and I don't know that website, 1107 00:52:49,010 --> 00:52:54,010 but they do publish what their pricing is gonna be. 1108 00:52:55,130 --> 00:52:57,260 And then, of course, you need to take that price 1109 00:52:57,260 --> 00:52:58,970 and do a currency exchange on it 1110 00:52:58,970 --> 00:53:03,890 to get to American dollars if you're in the United States, 1111 00:53:03,890 --> 00:53:08,890 but different buyers will have different prices out there, 1112 00:53:09,280 --> 00:53:13,470 especially this year, this year at least in the Northeast 1113 00:53:13,470 --> 00:53:15,380 was a very poor year, 1114 00:53:15,380 --> 00:53:20,010 and so the bulk prices, they were higher than normal 1115 00:53:20,010 --> 00:53:24,420 and there was a wider variety between buyers, 1116 00:53:24,420 --> 00:53:25,270 at least what I notice, 1117 00:53:25,270 --> 00:53:28,570 some buyers were offering more than other buyers. 1118 00:53:28,570 --> 00:53:29,963 It wasn't a typical year. 1119 00:53:30,820 --> 00:53:31,933 Any more questions? 1120 00:53:35,310 --> 00:53:37,763 It looks like Mark might've froze up. 1121 00:53:39,220 --> 00:53:41,780 So there is a question just came in. 1122 00:53:41,780 --> 00:53:45,113 Would you consider doing your own RO system? 1123 00:53:46,280 --> 00:53:48,020 And my answer to that is I wouldn't 1124 00:53:48,020 --> 00:53:51,530 because I don't know, you mean, 1125 00:53:51,530 --> 00:53:55,650 and what you're getting at is doing RO to the sap 1126 00:53:55,650 --> 00:53:58,103 and then delivering concentrate. 1127 00:53:59,840 --> 00:54:02,620 I don't have enough taps to make that worthwhile. 1128 00:54:02,620 --> 00:54:05,380 There are some people who I have heard are doing that. 1129 00:54:05,380 --> 00:54:08,080 You'd have to have a fairly like sugarbush. 1130 00:54:08,080 --> 00:54:10,632 There's actually an operation going 1131 00:54:10,632 --> 00:54:14,980 in the town that I live in that is gonna have a lot of taps, 1132 00:54:14,980 --> 00:54:18,800 and they're delivering that sap a pretty good distance. 1133 00:54:18,800 --> 00:54:21,110 So I'm suspecting that they might be putting 1134 00:54:21,110 --> 00:54:23,683 in reverse osmosis machines there. 1135 00:54:24,730 --> 00:54:26,670 And if you have a big enough operation 1136 00:54:26,670 --> 00:54:30,100 it could be worthwhile to do that, 1137 00:54:30,100 --> 00:54:32,950 but that's something else that you'd have to dig into 1138 00:54:32,950 --> 00:54:35,393 when you're doing your planning. 1139 00:54:36,660 --> 00:54:39,340 But I think that was a similar question 1140 00:54:39,340 --> 00:54:41,113 from both Ross and Paul, 1141 00:54:41,980 --> 00:54:44,023 and it looks like we did lose Mark. 1142 00:54:45,759 --> 00:54:48,030 He usually wraps these things up, 1143 00:54:48,030 --> 00:54:49,400 but we are at 8:00 o'clock, 1144 00:54:49,400 --> 00:54:53,743 and if we don't have any more questions, 1145 00:54:55,560 --> 00:54:56,873 I guess we can wrap it up. 1146 00:54:58,010 --> 00:55:01,160 I wanna thank everybody for joining us tonight. 1147 00:55:01,160 --> 00:55:05,110 And I look forward... 1148 00:55:05,110 --> 00:55:06,700 There we go, I just got a message from Mark 1149 00:55:06,700 --> 00:55:08,860 saying he just lost his signal. 1150 00:55:08,860 --> 00:55:13,260 So I look forward to doing more work on sap businesses 1151 00:55:13,260 --> 00:55:15,130 and hopefully you all, 1152 00:55:15,130 --> 00:55:19,090 or some of you will get involved in our upcoming projects. 1153 00:55:19,090 --> 00:55:21,450 So don't forget to go to Facebook 1154 00:55:21,450 --> 00:55:25,230 and to stay at, check out maplemanager.org. 1155 00:55:25,230 --> 00:55:29,530 That's where we'll be producing much more tools 1156 00:55:29,530 --> 00:55:30,963 and information for you all. 1157 00:55:32,060 --> 00:55:33,720 - [Mark Cannella] Thanks, Chris. 1158 00:55:33,720 --> 00:55:34,883 - All right, thank you. 1159 00:55:36,340 --> 00:55:37,770 - [Man] Thanks, Chris. 1160 00:55:37,770 --> 00:55:39,140 All right. Goodbye, everybody. 1161 00:55:39,140 --> 00:55:40,040 Have a good night.