Inventory management can be a difficult task in any sector, requiring trading partners to balance stock levels, available warehouse space, and market demand. And seasonal fluctuations can make the job all the harder, according to the trade group Québec Maple Syrup Producers (QMSP).
QMSP has seen wild swings in production in recent years. For example, last year’s harvest was so low that QMSP was forced to draw on maple syrup inventories held in the Global Strategic Reserve, draining that stockpile to its lowest level since 2008. This year, by contrast, the group reported an all-time record harvest of 239 million pounds of maple syrup.
That’s mostly good news: This year’s bumper crop will safely meet consumer demand, with enough surplus to replenish the warehouses, according to QMSP. But those surplus conditions have also given rise to a different challenge: financing unsold inventory.
“Since its creation in 2000, maple producers have been required to set aside a portion of their annual production in the Strategic Reserve,” QMSP President Luc Goulet said in a release. “This ensures a constant supply regardless of shortfall (last year) or surplus (this year) and stabilizes prices from year to year.” But the practice has a downside for producers, he warned. “The issue for producers is that they are not paid for the maple syrup placed into inventory until it’s sold, resulting in additional financial pressure. Add to this climate change, which is causing even greater production variations.”
To help ease the pain, QMSP is proposing a remedy that’s typically not available to private-sector players: It’s calling on the Canadian government to help finance what Goulet called “the unique and effective reserve strategy.”
