Evaluating and Leasing a Woods for Maple Syrup Production

Expansion in maple syrup states have been in high gear over the last several years. In New England and New York, there is little doubt on how and where expansion will occur. In both areas you have mountainsides with literally thousands of maple trees, and much of this land is owned and leased by the government or large private companies. If you can swing the operating capital and lease the land, expansion is as simple as running a pipeline down the mountainside to a sugarhouse. Okay – I realize it is not that simple but it is a lot easier than what expansion looks like in most parts of Ohio. We have fewer trees and in smaller concentrations distributed across the state. There is also the obstacle of convincing landowners to lease their trees which can be very difficult to say the least.

Let’s look at the process of leasing trees for maple syrup production. The majority of trees in Ohio are privately owned, and the land that is publicly-owned (either by the federal or state government) is concentrated in southeast Ohio – a region that has never been considered prime maple producing territory. Sixty percent of the maple production in Ohio is done in the northeast quadrant of the state. Northeast Ohio has experienced increased pressure from urban development and the price of that land reflects developmental value not agricultural value. This often makes it unaffordable for someone to buy a woodlot for maple production. To compound the problem, much of this land is owned by “Baby Boomers” who are aging or are now ready to leave Ohio and transfer ownership to a sibling or third party. Often the cost of ownership (e.g., property tax) or the cost of settling an estate ultimately determines what will happen to an estate. Many times the family is forced to liquidate assets such as timber to offset these expenses, and as a result, many potentially prime sugar bushes have been cut down and lost in the process. Unfortunately in times of financial stress, families do not feel as though they have time to explore all their options and fail to receive the timber’s full market value as a result of a quick sale to settle financial obligations. Later realization of this unfortunate fact often compounds the agony of estate settlement.

Today a profitable maple operation relies heavily on technology to be successful and that includes a vacuum tubing system. The financial and physical investment of installing a tubing system necessitates a long term (7 to 10 years) lease, but many landowners are hesitant about entering into this type of agreement for a variety of reasons. One of the primary reasons is that the owner does not want to be bound to a binding contract if something unexpected were to happen and they had to sell the property. Even if a sale is not forthcoming, many owners are cognizant of how their decisions might impact the next generation. All these concerns should be considered when designing a maple lease. An emergency escape clause that protects the rights of both parties is one way to deal with this concern, and another method to soften those objections is for the landowner to get a substantial financial return for leasing the woods.

Consider the fact that an average lease on cropland now starts around $100.00 per acre (averages are higher in some areas and lower in others). This would mean that woods with 80 taps per acre renting for $1.00 per tap would be nearly equivalent to many cropland leases. This quick comparison also demonstrates why maple lease rates need to start at $1.00 per tap to keep a woodlot lease competitive with other market options. Using competitive rental rate per acre as the cost basis, the most important task is to accurately estimate the number of taps per acre.

Since the early 2000s, finding a previously untapped sugarbush in prime condition in Ohio has been increasingly difficult. Often, a maple producer hears about a stand of timber that might be available for tapping, but after closer inspection the woods falls short of expectations. I can tell you from experience that I have walked more than one woodlot where the owner was sure he or she had enough trees to make syrup but reality told another radically-different story.

In other cases a quick hike reveals that the woodlot is 2nd or 3rd growth timber containing large numbers of smaller trees that are not yet large enough for a profitable timber harvest. Maple syrup production in these younger stands may be a viable option but landowners are expecting an immediate large financial return from his woodlot. More careful evaluations may reveal only single tap trees interspersed with even more trees that are not presently large enough to tap. In these cases, a producer should attempt to convince the forest owner that maple syrup production is a worthwhile endeavor only if the lease is long-term.

On the occasion that a sugarbush contains many large mature maples, it may be difficult to make a case that the landowner could make more money by leasing maple syrup production and foregoing a timber harvest. The only chance you may have is to increase the rental rate per acre and suggest that a careful timber harvest be done to capture some timber potential while releasing crop trees.

Of course, just having maple trees present is not enough to have a profitable sugarbush, so what other criteria should be considered as a producer determine the feasibility of transforming a woodlot into a sugarbush? The equation begins with a solid layout plan. The best way to determine layout is to use a GIS map with contour lines to find high and low points. Producer should avoid excessively long mainlines going to trees scattered over a wide area. Slope is important but there are work-around methods to deal with slope issues. The most common problem with slope is that the woods often slopes away from the collection point. This problem can usually be solved with the installation of auxiliary tanks, long pump lines, and a transfer pump big enough to handle the volume of sap produced. But of course, everything comes with a cost that must be considered.

If you are lucky enough to find a woodlot where sugar maples are the dominant species with trees evenly dispersed throughout, you have found a real jewel. However, most woods with sugar maples will have a mix of red maples and other hardwood species as well. Regardless of overall species composition, producers should consider any woods with 80 taps per acre a solidly viable sugarbush. Anything below 50 taps per acre would be considered marginal at best.

If the woods has been previously harvested, tree size may be an issue. Remember that trees should be at least 10 inches in diameter to tap. There are quick ways to assess tree size and density of tappable trees. You need an angle gauge or prism to determine tree size at a distance. For closer examination, a 32 inch circumference chain or rope equates to a 10-inch diameter tree. The best way to determine tap numbers is to lay out a circle with a 26.3′ radius. Standing at center and using the angle gauge or prism, count all of the trees 10″ diameter and larger within the circle. Because a 26.3′ radius circle is equivalent to 1/20th acre, multiply the number of trees by 20 to estimate the number of taps in an acre. For example, if you identified 4 single-tap maples in your 26.3′ radius circle, you would multiply 4 times 20 to yield an estimate of 80 taps per acre. In order to get a representative sample of the woods, you want to repeat this randomly at multiple locations throughout the sugar bush and average your results for a reliable estimate of average number of taps per acre for the woodlot.

Now it is time to estimate your syrup yield from the sugarbush. A well-managed vacuum tubing system should produce upwards of ½ gallon of syrup per tap. At $50.00 per gallon, you can now calculate your gross proceeds based on the average number of taps per acre. To continue with the 80 taps per acre example above, you would expect to gross approximately $2000 per acre. Before you get too excited, remember that is a gross return and your production and infrastructure expenses (including labor!) must be deducted to give you a net return on your investment. Spreadsheets such as the Maple Syrup Business Planning Guide from OSU Extension can help with this tedious projection.

Of course there are many other components of a good lease agreement, but simply stated – any lease should be grounded on the basis of Best Management Practices. This includes everything from tree size determination to landowner liability protection to other allowable practices (e.g., firewood gathering) and everything else in between.

Once a reasonable lease offer has been assembled, you must now convince the landowner. Put yourself in the shoes of the landowner and ask yourself would you consider entering into this contract if it were offered to you. Hopefully the answer is yes, but if it is not, then you should reassess before moving forward with the offer. What happens next will determine the success or failure of adding this woodlot to your operation. You now become a salesman trying to convince the owner, and hopefully the landowner will think the lease is as good of an idea as you do. If you have done your homework and you make your case honestly and sincerely, you should have a good shot at successfully expanding your maple syrup operation.

Author: Les Ober, Geauga County OSU Extension