One could be forgiven for thinking the U.S. maple industry is in decline, considering the poor sugaring season in 2012 and fears about climate change, but the reality on the ground is that business is booming. The U.S. Department of Agriculture estimates that 9.8 million trees were tapped nationwide last spring – up 38 percent from just 10 years ago. Production is also up, on average, about 77 percent. While production varies from year to year due to weather, the steady increase of maples tapped and syrup produced appears likely to continue despite stable or decreasing prices for bulk syrup.
Politicians have taken notice of the sugaring boom and included a Maple Tap Accessing Program (TAP) Act in the 2012 Farm Bill (maple-glazed pork) designed, among other things, to “help maple farmers access trees that are currently on private lands.” New York Senator Chuck Schumer, perhaps the leading maple proponent in Congress, sounds like an old-time oil prospector as he extols the virtues of sugaring on his website: “They say money doesn’t grow on trees, but with millions of trees waiting to be tapped, there may be bucketfuls of dollars inside them.” In my own work as a consulting forester, I’ve seen more client interest in sugaring; in fact, I received a phone call last year from a realtor who was working with an investor looking to start a 100,000-tap sugaring operation, from scratch, in New England.
As the maple industry grows and competition for available taps increases, tapping leases are becoming an option for landowners looking to generate revenue from their woodland. But as with anything in life, people should look before they leap. What follows is a primer on sugarbush leases, designed to give both landowners and sugarmakers a realistic snapshot of what they may be getting into.
Location, Location, Location
When looking at a prospective sugarbush lease site, the first thing a sugarmaker is going to want is a suitable number of taps per acre. Ideally, the number will be somewhere between 50 and 100; generally speaking, a stand with fewer than 50 taps per acre is not considered financially viable South- and east-facing slopes are generally more desirable for sugaring than north- and westfacing slopes. Uniform slopes with easy access to the bottom are most desirable. Larger areas are generally more valuable, as they contain a sufficient number of taps to recoup the investment of infrastructure – the economy of scale.
While maple sugaring evokes the image of sap buckets, a horse-drawn gathering tank, and steam rising from a deep-woods sugarhouse, modern maple operations are nowhere near as quaint. The modern sugarmaker relies on miles of plastic tubing, stainless steel collection tanks, vacuum pumps, and often large trucks capable of hauling thousands of gallons of sap at a time.
A landowner should be aware of the modern look of sugaring and know that the sugarmaker will need to do maintenance work during all seasons. Sugaring occurs during mud season, and access roads will, in all likelihood, become rutted and need repairs; expectations about maintenance are an important part of any agreement. Tubing installations are generally permanent; unless it’s specified in the lease, tubing will stay in place year round.
Managing a forest stand for maple sap production involves a light cutting of undesirable trees and brush on a periodic basis (generally every 10-15 years). A year or two before starting a sugarbush lease, it is often advisable to perform an improvement cut to remove softwood, hazard trees, and any mature veneer trees that would otherwise not be tapped. This work may be undertaken by the landowner and his or her forester prior to entering into a lease agreement, or by the lessee (working with the owners’ forester) prior to installing lines. In most cases, a thinning for sugarbush improvement can be handled as a simple modification to an established forest management plan.
Tapping involves drilling a hole in the bottom six to eight feet of a tree. While tap holes normally grow over within two years, these holes will diminish the quality of the butt log for veneer. Tap holes are considered a defect of low to medium impact for sawlogs, therefore you should consider whether veneer trees should be identified and excluded from a maple lease.
Standards and expectations should be clearly outlined in a written lease defining the area covered, the duration of the lease, payment amount, and method of payment. It should also address whether the stand, or portions of it, can be subleased, tree care, and tapping standards. Model standards can be found here.
Standards for sugarbush management should include the size and depth of the tap hole – current best practices recommend holes that are 5/16-inch diameter and no deeper than 2 inches, including bark. Traditional tapping guidelines held that trees over 10 inches in diameter at breast height could get one tap, over 15 inches two taps, over 20 inches three taps, and over 25 inches four taps. Modern best practice guidelines are more conservative, however, and suggest that trees between 10 and 18 inches in diameter should get one tap, and anything larger can have two.
Lease payments are generally made annually, based on the number of taps. The rate is negotiated between the landowner and producer and often includes maple syrup as part of the payment. Lease rates depend on such factors as the quality of the sugarbush, the number of available taps, taps per acre, access, and distance to the sugarhouse. The per-tap rate for maple leases on Vermont State land is determined annually and is set at 25 percent of the average of the per-pound price for Fancy and Grade C bulk syrup on May 1 of the preceding year. In 2012, the rate was $0.67/tap.
When negotiating a lease, it’s important that a landowner have an idea of the financial investment a sugarmaker is making. Tubing costs an average of $10-$15 per tap. This includes material and labor for the tap, drop line, lateral lines, main lines, and associated fittings. Storage capacity of at least one gallon per tap is required, at a cost of $1-$1.50/gallon; a vacuum system costs a minimum of $4,000. The cost of setting up a maple lease is therefore substantial. Tapping leases generally run for a minimum of 10 to 15 years, in order for the producer to recover his or her investment.
Sugarbush leases have the potential to provide landowners with annual income, provide sustainable forest management, and help perpetuate the working landscape in the Northeast. Done with proper care and clear expectations, leasing forest land for maple sap production can result in a win-win situation for all involved.