Brace Yourselves Because A War Is About To Commence Between the Maple Syrup Cartel And The Black Market

Bloomberg: The cartel that produces 72 percent of the world’s maple syrup is starting to crack. After eight years of tightly limiting output to keep prices high, the Federation of Quebec Maple Syrup Producers next year will boost its quota by 12 percent for 13,500 sap farmers who operate in the Canadian province. The goal is twofold: Reclaim the 10 percent of market share lost to the U.S. over the last decade, and quell a rebellion by producers increasingly turning to black market sales for growth. …

U.S. production this year totaled 4.2 million gallons, a 23 percent boost from a year earlier, with Vermont accounting for 47 percent of the total, the U.S. Department of Agriculture said in June. …

That growth frustrated Quebec farmers, who have been urging an end to quotas. While the government-sanctioned cartel kept prices stable by limiting output and maintaining strategic stockpiles, tappers complained that the system imposed a “heavy, inflexible handicap to the province’s performance,” according to a 70-page report commissioned by Quebec Agriculture Minister Pierre Paradis, released earlier this year.  That frustration was leading some farmers to sell on the black market, and some said they felt harassed by the federation, according to the report. …

The quota increase makes the system more flexible and adaptable to the free market and will curtail black market sales, said Simon Trepanier, executive director of the Federation of Quebec Maple Syrup Producers. “If we allow producers to add more taps or at sell inside here, they will not be interested in selling on the black market,” Trepanier said in a telephone interview. “It will help to have a clean market, instead of a black market.” …

 


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This is maybe the weirdest blog I have ever written.  I have written hundreds of pieces on unconventional news stories, but this one is the biggest oddball of the bunch.  The article itself takes a while to get going which is why I extracted the key points to make it flow.  If 1000 people read this blog, and when I say 1000 I really mean somewhere between 6-14, maybe one person will read the entirety of the Bloomberg excerpt.  Your loss, this is the hard hitting stuff that pays the rent.  But being the nice guy that I am, and the controller of content here at TheEricHammer.com, I’ll provide the Cliffnotes version.

Essentially the maple syrup suppliers were given ceilings in terms of how much they can produce and turn into sales.  This cap was implemented to drive prices and avoid over saturating the industry with too much supply.  The suppliers didn’t like that because they were sitting on all this inventory without being allowed to flip it into sales.  So they took their product to the black market.  The syrup farmers found a way to bypass the restrictions placed onto them and subsequently made the maple syrup industry profoundly more interesting than perceived to be.

Now the quota is being increased in hopes that farmers will cease operations in the black market.  Simply put, if they were allowed to sell more, they wouldn’t have to search for alternative methods of turning product into profit.  It’s a very basic concept if you think about it.  Call me crazy, but I’m fairly certain that without black markets, markets themselves would fail to exist.  Without competition, it becomes increasingly more difficult to price your product(s).  They’d just be competing against themselves in theory which would ultimately lead to their own demise.  Not sure where I was headed with that one, but I know I’m into something.

Ladies and gentlemen, prepare for battle.  War is about to begin.  I’d predict that the majority of people never put much thought into the maple syrup syrup market.  And those that have most likely hadn’t ever considered the potential ramifications of resorting to black market sales due to regulated quotas.  And yet here we are on the brink of WWIII.  Do we have to pick sides for this?  It seems like the best play here.  We all have to draw a line in the sand and pledge our allegiance to one side.  I don’t know much, but I know you’re not supposed to go against any kind of cartel.  Then again the black market is the black market for a reason.  The real question is, who will the Quebec farmers stand tall with at the front of the battle line?  Give me the black market by 5.

Shout out to Luke for the tip

 

“Let’s be from Vermont, and let’s have an emerging maple syrup conglomerate!”

 

 

 

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