the effects of climate change on the maple sugaring economy
TRANSCRIPT
The Effects of Climate The Effects of Climate Change on The Maple Change on The Maple
Sugaring EconomySugaring EconomyKeith RileyKeith Riley
OverviewOverview
BackgroundBackgroundTechnologiesTechnologies
Past and PresentPast and Present
Current EconomyCurrent EconomyMarket TypeMarket Type
Threats of Climate ChangeThreats of Climate ChangeEffects of Climate Change Effects of Climate Change
BackgroundBackground
New England and New York combined New England and New York combined produce 75% of the United States maple syrupproduce 75% of the United States maple syrupVermont produces 44% of US maple syrupVermont produces 44% of US maple syrupTalk of climate change is worrying some Talk of climate change is worrying some maple producersmaple producersMany producers say they are tapping their Many producers say they are tapping their trees earlier every yeartrees earlier every year
BackgroundBackground
Maple Syrup has been made for centuries starting Maple Syrup has been made for centuries starting with Native Americanswith Native AmericansAt one time maple sugar was the only sweetener At one time maple sugar was the only sweetener available in the USavailable in the USThere are many other products besides maple syrup: There are many other products besides maple syrup: Maple Sugar, Maple Candies, Maple Cream Maple Sugar, Maple Candies, Maple Cream Takes roughly 40 gallons of sap to produce 1 gallon Takes roughly 40 gallons of sap to produce 1 gallon of syrupof syrupSeason lasts 4Season lasts 4--6 weeks from late February to April6 weeks from late February to April
Maple Sugaring TechnologyMaple Sugaring Technology
Maple Sugaring in the past Maple Sugaring in the past Vary labor intensiveVary labor intensiveBucketsBucketsCollection containersCollection containersLots of manpower Lots of manpower Vehicles or animalsVehicles or animals
Maple Sugaring TechnologyMaple Sugaring Technology
Maple sugaring in the presentMaple sugaring in the presentPlastic tubingPlastic tubingVacuum linesVacuum linesLess manpowerLess manpowerLess Vehicles Less Vehicles
Current Maple Sugaring EconomyCurrent Maple Sugaring Economy
4,000+ seasonal jobs in VT4,000+ seasonal jobs in VT$15 million dollars in direct sales to the $15 million dollars in direct sales to the economyeconomyMany family owned businessMany family owned businessIndirect economic impact to VTIndirect economic impact to VT’’s economy s economy $211 million ( tourism, retail shops)$211 million ( tourism, retail shops)Both Oligopoly and Pure CompetitionBoth Oligopoly and Pure Competition
Market TypeMarket Type
Oligopoly as a regionOligopoly as a regionCanada VS. USCanada VS. USLarge scale producers by stateLarge scale producers by state
Pure Competition within each statePure Competition within each state2000 individual producers2000 individual producersRelatively low barriers of entry less than $100,000Relatively low barriers of entry less than $100,000
New England and New York New England and New York Market ShareMarket Share
Climate ChangeClimate Change
Maple syrup production is entirely dependant Maple syrup production is entirely dependant on the weather any change no matter how on the weather any change no matter how slight can throw off production numbers and slight can throw off production numbers and cause the industry to declinecause the industry to decline
TemperatureTemperature
Projected Temperature in 75 Years
Current Temperatures
Maple Tree PopulationMaple Tree Population
Current Maple Tree Population
Projected Population in 75 years
Threats of Climate ChangeThreats of Climate Change
Change in freeze/thaw cyclesChange in freeze/thaw cyclesInsect infestationInsect infestationAir PollutionAir PollutionExtreme weather eventsExtreme weather eventsCanadian ProductionCanadian Production
Freeze/Thaw CyclesFreeze/Thaw Cycles
Night time temperature below 25Night time temperature below 25°°celsius and celsius and day time temperatures above 40day time temperatures above 40°° CelsiusCelsiusOnce a string of days occurs without a drop Once a string of days occurs without a drop below freezing, sap stops flowingbelow freezing, sap stops flowingSmall window of opportunitySmall window of opportunityTap to early, trees may Tap to early, trees may ““dry outdry out”” tap to late, tap to late, and miss the best sap flowsand miss the best sap flows
Insect infestationsInsect infestations
Two insects of concern: Forest Tent Two insects of concern: Forest Tent Caterpillar, and The Pear ThripCaterpillar, and The Pear ThripCan effect the rate of photosynthesis resulting Can effect the rate of photosynthesis resulting in less sugar storedin less sugar storedMore days above freezing increases the chance More days above freezing increases the chance of insects surviving longerof insects surviving longer
Air pollutionAir pollution
Acid rain can damage stems and rootsAcid rain can damage stems and rootsIncreased air pollution can add to the green Increased air pollution can add to the green house effecthouse effectAir pollution may also act as a fertilizer in Air pollution may also act as a fertilizer in some casessome cases
Extreme Weather EventsExtreme Weather EventsDroughtDrought
Causes decrease in stored root starches which results in Causes decrease in stored root starches which results in decrease in sugar contentdecrease in sugar content
Tropical SystemsTropical SystemsCould cause major wind damageCould cause major wind damage
Ice Storm the of 1998 Ice Storm the of 1998 categorized as 200categorized as 200--500 year event500 year eventAffected four states and QuebecAffected four states and Quebec$15 million dollar loss to entire industry$15 million dollar loss to entire industrySome counties in New York had 100% production lossSome counties in New York had 100% production lossTotal impact of storm is still unknownTotal impact of storm is still unknown
Canadian ProductionCanadian Production
In the 1950In the 1950’’s the US produced 80% of the s the US produced 80% of the worldworld’’s maple syrup and Canada produced s maple syrup and Canada produced 20% since then the numbers have flipped20% since then the numbers have flippedMany producers are able to access areas that in Many producers are able to access areas that in the past were inaccessible because of snow the past were inaccessible because of snow covercoverThis drives the wholesale price down for the This drives the wholesale price down for the whole industry whole industry
Economics of Climate ChangeEconomics of Climate Change
ExternalitiesExternalitiesFixed and Variable costsFixed and Variable costsMarket type ShiftMarket type ShiftSubstitutes Substitutes Supply and DemandSupply and DemandConservationConservation
ExternalitiesExternalities
Short Short --run Positiverun PositiveTourism (hotels, Tourism (hotels, restaurants)restaurants)Retail shops that sell Retail shops that sell syrupsyrupMaple festivals
NegativeNegativeFirms that use sugaring Firms that use sugaring for supplemental income for supplemental income (dairy farms, and other (dairy farms, and other agricultural businessesagricultural businesses
LongLong--run Negativesrun NegativesTourism (hotels, Tourism (hotels, restaurants)restaurants)Retail shops that sell Retail shops that sell syrupsyrupMaple festivals
Maple festivals
Maple festivals
Fixed and Variable CostsFixed and Variable Costs
Fixed CostsFixed Costs
Fixed CostsFixed CostsMaple Trees: determined by land value, age of Maple Trees: determined by land value, age of trees and taxestrees and taxesProcessing facility Sugar HouseProcessing facility Sugar HouseEvaporatorEvaporatorOther accessories: reverse osmosis, perOther accessories: reverse osmosis, per--heatersheatersSap collection Equipment: taps and tubing Sap collection Equipment: taps and tubing system,vacuum pumps system,vacuum pumps
Variable CostsVariable Costs
Labor: management, sap collection, Labor: management, sap collection, sugarhouse operation, maintenancesugarhouse operation, maintenanceFuel: wood, gas, oilFuel: wood, gas, oilElectricityElectricityMarketing : advertising campaignsMarketing : advertising campaignsSales costs and container costsSales costs and container costs
Fixed and Variable CostsFixed and Variable Costs
Fixed Costs Yearly cost
Sugarbush (20 acres@$1000 per acre) 400.00
Sugarhouse and related Items 732.50
Sap Collection equipment 546.00
Other fixed cost 1009.00
Total Yearly Fixed Cost 2687.50
Variable costsLabor: Management,
Labor: Management,other operationional costs 2182.50
Fuel, Utilities, Sap collection 145.00
Marketing and Bottling 1050.00
Total yearly Variable costs 3377.50
Total Fixed cost + Total Variable Cost 6065.00
Production and profitProduction and profitRise in price same production
Expected Revenues 300 gallons
Anticipated sales 275 gallons
Other product 25 gallons
275gallon X$35per gallon = $9,625.00
25gallonsX$55per gallon= $1,375.00
Total Revenues $11,000.00
Total Fixed cost + Total Variable Cost $6,065.00
Total Annual Profit $4,935.00
Normal Production and Price
Expected Revenues 300 gallons
Anticipated sales 275 gallons
Other product 25 gallons
275gallon X$30per gallon = $8,250.00
25gallonsX$50per gallon= $1,250.00
Total Revenues $9,500.00
Total Fixed cost + Total Variable Cost $6,065.00
Total Annual Profit $3,435.00
Production and ProfitProduction and Profit
Production drops and price rises
Expected Revenues220 gallons
Anticipated sales200 gallons
Other product 20 gallons
200gallon X$35per gallon = $7,000.00
20gallonsX$55per gallon= $1,100.00
Total Revenues $8,100.00
Total Fixed cost + Total Variable Cost $6,065.00
Total Annual Profit $2,035.00
Production Loss
Expected Revenues220 gallons
Anticipated sales200 gallons
Other product 20 gallons
200gallon X$30per gallon = $6,000.00
20gallonsX$50per gallon= $1,000.00
Total Revenues $7,000.00
Total Fixed cost + Total Variable Cost $6,065.00
Total Annual Profit $935.00
Market ShiftMarket Shift
Climate change could cause a shift within each Climate change could cause a shift within each state from a Pure Completion Market to an state from a Pure Completion Market to an Oligopoly marketOligopoly marketChange in weather could reduce over all Change in weather could reduce over all production which may cause some smaller production which may cause some smaller firms to combine into larger firms creating an firms to combine into larger firms creating an OligopolyOligopoly
SubstitutesSubstitutes
Substitutes for SyrupSubstitutes for SyrupNot many substitutes based on peoples tastes and Not many substitutes based on peoples tastes and preferencespreferencesMaple flavored syrups Aunt Jamiama but contain little if Maple flavored syrups Aunt Jamiama but contain little if any pure maple syrupany pure maple syrup
Substitutes for treesSubstitutes for treesSyrup can be made from other trees like Red and Silver Syrup can be made from other trees like Red and Silver Maple, also Box Elder and White BirchMaple, also Box Elder and White BirchThese trees also depend on freeze/thaw cycles, and have These trees also depend on freeze/thaw cycles, and have much lower sugar content in sapmuch lower sugar content in sap
Supply and DemandSupply and Demand
Maple Syrup is Maple Syrup is relatively pricerelatively price--inelastic inelastic demand mainly due to demand mainly due to lack of substituteslack of substitutesS represents current S represents current market supply and S1 market supply and S1 represents supply after represents supply after effects of global effects of global warmingwarming
ConservationConservation
There is not much interest in conservationThere is not much interest in conservationTakes 40Takes 40--75 years for a Maple tree to mature 75 years for a Maple tree to mature Not many people are planting treesNot many people are planting treesSeeds only disperse around 200ft from the Seeds only disperse around 200ft from the parent treeparent tree
ConclusionsConclusions
In the future there may be some nonIn the future there may be some non--market measures market measures to help producers ( government subsidies)to help producers ( government subsidies)Not enough information for definite conclusions that Not enough information for definite conclusions that climate change is having an effectclimate change is having an effectClimate change could end the US maple sugar Climate change could end the US maple sugar industryindustryVermontVermont’’s Maple Sugaring may be affected the mosts Maple Sugaring may be affected the mostNew technologies may help to reduce the effects in New technologies may help to reduce the effects in the futurethe future