The Great Maple Syrup Theft: A Supply and Demand Story

Those who teach introductory economics are always looking for a supply and demand story, preferably with a bit of a twist.Thus, my eyes lit up at the reports last week (for example, here
and here) of an enormous theft of millions of dollars of maple syrup from the St. Louis-De-Blandford maple syrup storage facility in Quebec. Apparently about  10 million pounds of maple syrup were taken: enough to fill 15,000 barrels. To understand the importance of this story, you need to know that Quebec is the Saudi Arabia of maple syrup, and the theft decreased their stock of maple syrup reserves by about one third.

 The New England Field Office of the U.S. Department of Agriculture explains developments in the maple syrup market in its "Maple Syrup 2012" newsletter from last June. In 2011, Canada produced 10.3 million gallons of maple syrup, with 9.2 million of that coming from Quebec alone. U.S. production was about 2.8 million gallons, with Vermont leading the way at 1.1 million gallons. From 2009-2011, the average price per gallon was about $37-$38.

But the 2012 maple syrup season in New England (Maine excepted) was ruined by drought. Here's the USDA description:

"The 2012 maple syrup season in New England was considered too warm. A series of heat waves in March ended the season for many, and resulted in a significant drop in maple syrup production. ...  Mild winter temperatures got the 2012 season off to an unusually early start and many maple producers were caught off guard for the first sap runs in January and February. March temperatures were highly volatile with a historic heat wave that brought summer-like temperatures in the 70s and 80s across New England. The heat wave forced early budding of maple trees, marking the end of the maple syrup season. ...The sugar content of the sap was significantly below average in New England, requiring approximately 48 gallons of sap to produce 1 gallon of syrup. ...  United States maple syrup production in 2012 totaled 1.91 million gallons, down 32 percent from 2011, and the lowest production since 2007. The number of taps was estimated at 9.77 million, 2 percent above the
2011 total of 9.58 million. Yield per tap was estimated at 0.195 gallons per tap, down 33 percent from the previous season’s yield."

One might usually expect that the drop in U.S. maple syrup production would drive up the price. However, the price of maple syrup is largely determined by the Quebec Farmers' Union. Before the theft, there was plenty of maple syrup in reserve to buffer a bad year or two. But now, instead of prices rising with a bad harvest, it's possible that prices will fall as the maple syrup thieves seek to unload their booty on unsuspecting breakfast-eaters. However, the USDA does not yet have maple syrup prices available for this year.