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Business

How can rental rates for a sugarbush reflect recent investments in a tubing collection system that will benefit the next tenants for the many years remaining on the lifespan?

If the landowner is still significantly invested in the assets included in the enterprise lease agreement, a rental rate or potential partnership agreement should specify how the landowner will receive satisfactory compensation for their prior investments.

Market rates for access to trees is the first aspect of a rental rate for this situation. These rates are likely ~$0.50 - $1.25 per tap depending on the region. The second aspect of this rental rate will be factoring an additional rate for the included assets that are part of the agreement (tubing system, tanks, vacuum pumps, etc.). Property owners should use the DIRTI-5 method to calculate the annual Depreciation, Insurance, Repairs, Taxes and Interest related to these additional pieces of property. Annual depreciation can be calculated using current market valuation or prior purchase price divided by estimated lifespan. The total of additional annual costs from the DIRTI-5 calculation can then be added to the original “tree-access” tap rate.

What is a typical maple rental rate?

In 2019 a northeast maple producer survey found that two most common rental rates were $1.00-$1.24 per tap (43% of renting producers) and $0.50 - $0.99 (37% of producers). Rental rates can and should vary based on regional prices, quality of woods, accessibility and any number of other factors that are important to the tenant or landowner.

Forestry

Last year I planted about 100 2-year old seedling Sugar Maples in a marginal hay field in order to develop a sugar bush. I would like to broadcast fertilize them. What is the recommended fertilizer and application rates?

The Ontario Maple Syrup Producers Association collaborated on the publication A Guide To Maintaining Sugar Bush Health and Productivity, which contains a chapter on establishing maple orchards (pg. 65) that would be a useful read for you. It does not include specific application rates, because results are so dependent on the characteristics of the soil in a given area. Testing the soils will be an important step before determining what amounts to use. In general, sugar maple will respond well to increases in calcium. In forest soils there appears to be a long lasting benefit from applying lime at a rate of around 1 ton per acre. Aside from application of lime, I wouldn’t recommend putting down any other fertilizers without knowing the soil status and if it will actually be needed. What may be more important than fertilizer is using tree tubes and fencing to protect the seedlings from browsing rodents and deer.

I found a bucket of old 7/16” diameter spouts in the barn. Can I use them to tap trees?

The current best practice to promote tree healing and long term sustainable tapping is the use of 5/16” spouts. The older 7/16” spouts are no longer commonly used or recommended.

Legal

What are my options for doing a lease-to-own agreement?

Lease-To-Own is a method of arranging for transfer of property ownership at a future time, often as a way to increase the likelihood of ownership when an immediate purchase or access to conventional financing is not an option. A lease-to-own strategy requires the use of specific legal transactions like option to purchase, right of first refusal, and land contract (Contract for Deed). When the buyer and seller use this strategy, both parties can determine various terms of timing, payments and other provisions to embed in these legal instruments that guide the relationship. For more information on lease-to-own and land access visit the Land for Good website and find the Lease-to-Own Strategies fact sheet.

How can a forest landowner protect themselves from the risk of a tenant/maple operator doing something out of compliance with regulations?

A lease could include this clause (from Section 7 of the UVM Sugarbush Lease Guide): Lessee shall indemnify, hold harmless and defend landowner from any loss, liability, damages, administrative or civil penalties, claims, or suits, arising from Lessee’s failure to comply with the Vermont Required Agricultural Practices Rule or any other water quality or land use regulation.

I am working on a lease to set up a sugarbush. The forest landowner has suggested a five-year lease. Is this a good idea for a maple sugarbush lease?

Most sugarbush leases should run ~15 years in order to provide sufficient time for the maple operator to pay off the tubing system investment and get the full lifespan out of the tubing system. A shorter lease term like 5-10 years should include some form of investment sharing or payout clause between the forest owner and the maple operator to accommodate for the value of the installed sap collection systems.