There's a court battle going on north of the border in the province of Quebec that sounds totally silly on the face of it: a 58-year-old grandmother and some of her fellow maple syrup makers are challenging the way maple syrup is sold. In fact, this is a very big deal.
Starre Vartan has noted that the Vermont maple syrup industry is big, but it’s a pipsqueak compared to its northern neighbor. About 70 percent of the world’s maple syrup is made in Quebec, and they are more socialist than Vermont’s Bernie Sanders. There's even a Federation of Quebec Maple Syrup Producers that sets quotas and prices, and markets the syrup. There's also a Maple Syrup Strategic Reserve with 68 million pounds of syrup, stored to mitigate the risk of a bad harvest. It’s now guarded in the Fort Knox of Maple Syrup after a big heist a few years ago when 6 million pounds were stolen. It’s valuable stuff; a barrel full is worth $1,650, or about 55 times as much as a barrel of oil. The federation controls the market tightly, and it has the power to levy fines, and has even stationed security guards to stop rebels from selling their maple syrup outside of the federation’s system. You don’t mess with the OPEC of maple syrup.
But grandmother Angèle Grenier wants to sell her syrup to other markets. She tells the Globe and Mail: “It’s a mafia. They threaten us. Last year, they tried to seize my syrup. I had to [move the product into New Brunswick] at night. This year, they hit me with an injunction.”
Keeping a lid on the maple syrup market
The federation is trying to keep control of the maple syrup market, but there are big challenges besides Grandma Grenier. Production is exploding, thanks to new technology using pipes instead of buckets, and reverse osmosis instead of boiling. The free market New Englanders have taken share from those socialist Quebecois, which is down from 78 percent of the market to 69 percent today. According to Yves Bernard, a maple syrup distributor in Vermont, the U.S. may be self-sufficient in maple syrup in a few years. He tells Peter Kuitenbrouwer of the National Post:
“The States are growing,” says Bernard. “It’s supply and demand. It’s a free market. In Quebec, if I have 25,000 taps and I want to go to 50,000 taps, I am not allowed. In the States I have no restrictions and I can grow as much as I want.”
So Quebec’s maple syrup cartel is under attack from within and without. When it was set up in 1990, farmers couldn’t make any money from maple syrup; there wasn’t that much demand because people were just as happy with Aunt Jemima’s. Then came the demand for natural foods, new health claims for the real stuff, and it became a hipster brunch favorite ingredient. Now when times are good and demand is high, the cartel is suddenly impinging on the producers’ freedom to sell wherever they want at whatever price they can get. Meanwhile, south of the border, the producers have benefited. According to Dave Sherwood in Northern Woodlands, the high prices that come from the cartel’s control of so much syrup has a huge impact:
No one was happier with Quebec’s new policies than sugar makers across the border in the United States. With prices high and stable – and guaranteed – American producers reaped all the benefits of so-called Canadian socialism but suffered none of the pesky consequences: heavy-handed quotas, tap limits, and draconian enforcement. Syrup began to flow like liquid gold.
Of course we all know what happened with that other liquid gold (oil) when the USA started producing more and more shale oil and became a threat to the OPEC of oil: the Saudis turned on the taps and the price of oil fell to where it is today as they try to drive higher-cost producers out of business.
It’s likely that if the American producers get much bigger, then the maple syrup bubble might burst, as the oil bubble did. And the American producers don’t have that socialist safety net. The head of the Quebec federation, Simon Trépanier, is quoted in Northern Woodlands, and notes that they could turn on the taps too.
The point is, it’s a very fragile situation for producers in the States. We have two times the U.S. production in reserve right now. So if we have another big year and decide to sell that syrup, or part of it, at a much lower price, what will these people in the U.S. do? They won’t be able to sell their syrup. They don’t have anything to protect them from collapsing like we do here.
It’s all very sweet right now, but it could get sticky real fast.