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Global Markets for Minnesota Syrup Makers a Sticky Situation

February 15, 2010 By Lee Egerstrom, Economic Development Fellow

Minnesota's maple syrup makers are busy "tapping" their trees, getting ready for the sap to run in March through early April and the start of production of one of the state's most unique and smallest food products.
The local market for maple syrup is swamped by Canadian syrup, says Dave Rogotzke from Rogotzke's Simple Gifts at Duluth who produces and sells Northern Minnesota maple syrup and wild Alaskan salmon in regional markets. Artificial toppings of maple-flavored syrups that utilize far more of Minnesota's corn than local maple sap command an even bigger part of the market.
Rogotzke says Minnesota's maple tree farmers, or "sugarbush" operators, are at a great disadvantage because government programs in Canada encourage tree farming. Maple syrup production is a sub-group of forestry; North America is the exclusive home of maple syrup production, and Quebec dominates the worldwide market for this gourmet food.

He's not especially critical of the Canadians. In fact, he cannot dissect what impact Canadian policy has on comparative costs and what impact currency values play in the trade of maple syrup. While syrup he sells for $17 a quart comes in from Canada at $16 a quart, he does benefit by buying syrup-making equipment from Canadian firms - the only companies that make it - by importing the machinery with the stronger American dollar.

He suspects, as do some of his fellow maple syrup producers, that cheaper Canadian maple syrup is often blended into products here that claim to be Minnesota, or Wisconsin, syrup.

Such is life along the highly productive North American border that separates Canada and the United States. Hard red spring wheat farmers, who grow a class of wheat raised only in Minnesota, North Dakota, Montana, Alberta, Saskatchewan and Manitoba, have struggled with border issues since frontier days and the adoption and development of what had been Russian and Northern European wheat varieties.

The same applies to malting barley; beer drinkers who opt for quality, not quantity, prefer full-bodied and unique beers originating with the same Northern States and Western Province farmers who grow barley varieties developed by Universities of Minnesota, Manitoba and Saskatchewan, North Dakota State University and Montana State University.

"Okay. We have a forest that includes maple trees that have an international boundary running through it. The trees don't care. Weather and soil determine how good the crop is each year, and where," said Rogotzke, whose maple syrup has been an award winner in three of recent year competitions at the Minnesota State Fair.

In 2008, the last year for which comparative production data are available, Canada produced 5.9 million gallons of maple syrup, valued at $209.5 million in U.S. dollars. The U.S. production, from 14 states, totaled 1.9 million gallons valued at $77.5 million.

Vermont, New York, Maine, Wisconsin and New Hampshire make up the big five states monitored by the USDA National Agricultural Statistics Service. Minnesota is among the "others" that contribute to the domestic maples syrup supply, but data aren't available.

For comparison, however, New York State has more than 500 maple tree farms in its maple syrup promotional organization. Minnesota lists 80, stretching from Fillmore County on the Iowa border on up through the Twin Cities metro area to Lake and Cook counties on the Canadian border.                 
 
Going forward, as the sap runs
At the same time, the maple syrup industry in Minnesota offers a logical starting point for Minnesota policy makers and thinkers to reassess what state and local governments do to support their industries and local economic development.

Would engaging Canada in a subsidy battle over maple syrup make sense? Of course not. It would only cause another 'race to the bottom' by lowering prices, and Canada would win such a shortsighted race because it has more to lose.

Would supporting more tree farms with various incentives and tax breaks make sense in Minnesota, whether for "green" tree growing purposes or simply to boost maple syrup production?

Again, no. It could distort tree farming practices and forest resource management; Minnesota has diverse forestry resources and economic stakes in each. What's more, new and bogus subsidization schemes almost invariably reward new entrants into an industry at the expense of the established businesses and entrepreneurs.

It is for these latter reasons why Minnesota policy makers need to reassess and rationalize economic development programs after this election year, particularly looking at JOBZ and other activities that distort markets - either for special interest groups or for broader economic development objectives. Unintended consequences can be costly, and that can make premium Minnesota-made maple syrup one heckuva bargain.     

Finally, one of Minnesota's greatest success stories in promoting Minnesota commerce and industry has been the "Minnesota Grown" campaign operated by the Minnesota Department of Agriculture. This is a state promotional strength.

It should be built upon, and Minnesota maple syrup should become a more studied, supported and promoted sub-industry of Minnesota forestry - requiring greater coordination between the Minnesota Department of Agriculture and the Minnesota Department of Natural Resources. This is not too much to ask; these are two of Minnesota's strongest institutional resources.  

Finally, state consumers can support this unique Minnesota industry by reading labels and supporting local maple syrup makers - especially since premium maple syrup is not a big cost item in household food budgets.

As Minnesota 2020 has shown in annual "Made in MN" buy-local reports, money spent on locally made products using local resources tend to stay and multiply in the community.

This is the case with tree farms and maple syrup makers, said Rogotzke. Duluth area elementary, high school and University of Minnesota-Duluth students tour his farm this time of year to learn about collecting sap to cooking it into syrup. These visits make fun outings for senior citizen groups as well, he said.

Meanwhile, members of the Minnesota Maple Syrup Producers Association are teaming with Minnesota State Parks-DNR, high school vocational agriculture programs in the Frazee and Pelican Rapids area, and Maplewood State Park near Pelican Rapids to operate a syrup making demonstration for the public this March and April.

These quality of life contributions don't come in an imported bottle.

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