1. Separate business
I would consult a CPA or attorney and discuss whether a separate business would be necessary or not. There are pros and cons and may somewhat depend on state and local laws. Plus, do you want to separate it from your farm business as there may be potential liabilities with that business as opposed to the farm.
2. The harvesting of the syrup is farming. From what I've read it would appear the activities required to make syrup or sugar are probably not farming . Farming is the raising of crops. Cleaning, grading, etc. are farming activities. But processing of products into a "refined" product is no longer farming.
I think that once you start processing the raw sap by heating and refining the raw sap into "refined" syrup and sugar, it is no longer farming. For example, the cost of fuel used to heat the maple sap is not a farming expense and probably should be reported on Schedule C along with any other expenses and resulting income from maple syrup sales.
**Disclaimer: Effort has been made to offer correct information; but due to the discussion forum limitations, the poster disclaims any legal responsibility for the accuracy of the poster's response**
