I was shocked this summer when I saw the price of maple syrup virtually double in a few weeks' time. My family sweetens a lot of our food with maple syrup as we are working to reduce overly processed foods in our diet. At the time, I didn't know exactly why, but I've just been schooled in the world of maple syrup prices, and I've drawn some hypothesis about forecasting food pricing in general as a result.
Maple syrup is (unsurprisingly) dominated by Canadian production. What was a surprise to me was that Canada's government holds oversupply from a prior year and (much like the U.S. government's oil reserves) dumps it onto the market the next year if it is required. Due to a few years of low production due to weather, the Canadian government depleted its last bit of reserves sometime during 2007, and the price went sharply higher.
However, in the U.S., pricing isn't agreed upon in the way in which most commodities are; small suppliers negotiate one-on-one with small customers, in most cases. What's more, American production has steadily increased so that, in 2008, the U.S. was able to produce about 34% of Canadian production, giving the small suppliers an ever-larger impact on the world's prices.
The economic prediction of the owner of Tillinghast Maple: prices are about to start dropping as of the 2009 maple crop, if weather holds. The U.S. has more power and the reserve depletion of last year will have evened out. And I wonder if this model, of small farmers negotiating with small customers (kind of a farmer's market model, hmmm?) will have ever-greater impact on the U.S. market as customers more and more choose to buy local, shop in co-ops and farmer's markets, and buy produce and meat from CSAs and other direct relationships. Could little guys save the food economy? It's worth hoping.
Maple syrup prices at peak: Are they a leading indicator?