Exploring Honey Prices (076)

Episode 76 – Exploring Honey Prices

Kim Flottum: Jim, I was in a national chain drugstore of all places recently. I got my second booster shot for COVID, and they want you to wait around for a bit to make sure that you don't tip over from some kind of reaction to that shot. While I'm waiting around, I could have been sitting in a chair there but you know me, I don't get into drugstores very often. I was walk and run. I went into the grocery section, and I was amazed at how many groceries this drugstore had, and they had a honey display. I went over and looked, and they had a jar of honey, it was a pound and a half jar of honey, $4.99.

Jim Tew: Oh, my heavens.

Kim: I took a closer look, and you know what the law says you got to put the source of the honey on the cap or someplace where it can be seen. This honey came from India, Mexico, and let's see, what was the third spot? Oh, Brazil. India, Mexico, and Brazil, this honey came from. Any of those or all of those or some of those three countries. It was on a retail shelf for $4.99, and it got me to thinking. This was brought up really well in the May issue of Bee Culture. We did the US Honey Industry Report 2021 in that issue. I want to talk about some of this, how all of this is tied together for a minute, okay?

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Jim: I'd like to do that.

Kim: Okay, well. Hi, I'm Kim Flottum.

Jim: I'm Jim Tew.

Kim: We're here today at Honey Bee Obscura to talk about well - I guess - to talk about honey prices in the US.

Introduction: You are listening to Honey Bee Obscura, brought to you by Growing Planet Media, the folks behind Beekeeping Today Podcast. Each week on Honey Bee Obscura hosts Kim Flottum and Jim Tew explore the complexities, the beauty, the fun, and the challenges of managing honey bees in today's world in an engaging and informative discussion meant for all beekeepers, long-timers, and those just starting their journey with bees. Sit back and enjoy the next several minutes as Kim and Jim explore all things honey bees.

Kim: Most of us are hobbyists, but what are these international honey prices? Are they going to have any effect on our two, three, four colony hobbyists backyard beekeepers? Are those prices going to make life better, worse, more difficult, less difficult? I don't know. What do you think?

Jim: I was struggling to come up with our best guess when you were saying that. I am clearly now the hobby producer, and you never know anymore. It's hard to tell exactly how much money a pound of honey is worth. At my age and my energy level is worth about $300 a pound. I’m probably not going to get that. What's a fair market value for honey now? Because people constantly say, "If I get into beekeeping, and I get a few hives of bees, can I make some money with this honey product?" I don't know. This whole concept of how much to sell your honey for, and what it's worth, is really a moving target.

Kim: Well, the national associations have been trying for a few months to raise tariffs and to get tariffs back on honey coming into the US from some of these cheap countries. Let me tell you what these cheap countries are selling honey for here. Here I've got, this is in 2021, these are USDA prices. I'm talking right off their reports. Light amber honey, $1 a pound.

Jim: Hold up, that honey is shipped to the US?

Kim: Yes, it comes in a barrel.

Jim: It's sold to wholesalers for $1 a pound?

Kim: Yes, packers and to people who use honey in Honey Nut Cheerios and that sort of thing. We've got white honey, coming into the US for $1.54 for a pound. That's what our beekeepers have to compete with. They have to look at that price and go, "Can I sell my honey at that price?" The most expensive stuff that we have coming in is organic. A lot of that's from Brazil, but organic honey coming into the US for $1.86 a pound. That's the most expensive. The average price the US honey is selling for to the same packers is $2.41 a pound, twice as much. That's still not nearly enough.

That's what this pound and a half jar got me to thinking about is, what's going on in the beekeeping industry at the commercial level, but more importantly, what's that going to do to you and me? How does that trickle-down effect, what's that going to do? Here's one thing to look at is the per capita consumption of honey. I figured that every year for about 10 or 12 years. I go back and I get all of the honey that was produced in the US, and all the honey that went out of the US, and all the honey that came into the US, and I figure out how much honey was here. How much was left? How much is under loan and sitting in warehouses?

You put all those numbers together, and in 2001, every person in the US consumed 1.4 pounds of honey. Well, you and I know that every person in the US doesn't consume that much honey, there's a lot of people that don't consume any but on average per capita consumption was 1.4 pounds per person last year. That's down from 1.7 pounds the year before. If you go back 10 years, 12 years, 2010 is the lowest that I've had since I started. That was 1.2 pounds per person per year.

Jim: I’m sorry…How long ago was that, Kim? How many years ago?

Kim: 2010, it was 1.2 pounds per person.

Jim: So, the per capita consumption has been going up. You're saying?

Kim: I think most people spill more than gets eaten here when you look at the amount.

Jim: [laughs] I can understand that a little bit of honey goes a long way.

Kim: Well, looking at that, what does a commercial honey producer have to do to compete with that? You and I both know what's going on in the industry is that honey production isn't at the top of the pile anymore, it's pollination. That's where a lot of people are making their money. They're getting away from honey, but there's still some people out there they're doing a lot of honey. What's the state that produces the most honey? Got a thought?

Jim: It would have to be somewhere in the upper Midwest, California, the Dakotas.

Kim: Dakotas.

Jim: I'm guessing. Oh, okay.

Kim: Dakotas. North Dakota. Far and away the biggest honey-producing state in the nation. Far and away producing 28.3 million pounds in 2021. That's a lot of honey.

Jim: That's lot of honey.

Kim: Next is California and then South Dakota. Number 10 last year was Georgia producing 3.3 million pounds.

Jim: Georgia was producing that much honey?

Kim: Yes. You take those top 10 states and you put them together and they have 71% of the colonies. Honeybee colonies in the US reside in those 10 states, and they produce 72% of the honey produced in the US. The other 40 states are fighting for 30% of the honey. [laughs]

Jim: You got me scrambling here. Basically, where the bees are, it's where the honey production occurs. Which came first?   Somebody moved there because there was plenty of nectar being produced. That's really interesting. Those divergent states, Georgia is right next to Alabama my home state, and we're (Alabama) not known for being a major honey-producing area.

Kim: No. You (Alabama) didn't make the list. The list goes North Dakota, California, South Dakota, Florida, Texas, Montana, Minnesota, Michigan, Idaho, and Georgia. Those are the top 10 producing states.

Jim: Oh, I can't believe Michigan. Hey, no offense Michiganders, but I'm right here in Ohio, why am I not getting my fair share of this honey production going on in the midwest? There is a trickle-down effect. When I go to these farmers' markets, and I see that bee guy sitting there with one pound, two-pound, three-pound, five-pound jars out tables and price list up, and you look at those numbers you think, "Oh, my stars." Number one, that's expensive. Number two, I got to carry this stuff around once you buy it. I don't know how to help that bee guy there. I am that guy trying to make something fair return on my product there.

Kim: Well, what all of this comes down to is how is all of this affecting you and me in the long run. I've done some digging; I've been at this for 30 years looking at prices and how it affects the commercial market. What it comes down to is like we already said is that if you're a commercial beekeeper, honey is your second source of income and pollination, for the most part, is going to be your first source of income. What does that do to you and me is, when I go to a bee supply company or a bee supply store, they're going to be looking at the customers who are doing pollination, and the equipment they're selling them are going to cater to that group of people, because that's where the money is.

Are they going to be looking at hobby beekeeping, hobby honey producers like you and me? it's going to be less on their list of things to look at. They're going to be devoting more room to the commercial guys. They got to keep their margins competitive with other supply companies. They look at you and me and too often we're almost in the way.

Jim: Yes. Kim, can we take a break while I get my thoughts together on this because you're right. I'm going to be low man on the pole here.

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Jim: What I'm trying to understand now is - you’re right. If I wanted to buy a small extractor or is this a technology available to me now? It is, but we need more people buying that small extractor for me to be able to afford that you're saying. We are not being catered to if we are in the low-ranking purchase power group here.

Kim: Yes. You got to dig to see it happening going on, but it is happening going on. What this tariff is going to do against these countries is going to force them to raise that-- Well, it's going to make the people who are buying that honey pay more for it. The people who are selling it here aren't going to be making any more, but the people who are buying it here are going to have to pay more. That means that dollar and $0.2 cents a pound honey coming in from wherever is now going to go up to at least something competitive in the $2-$0.20 range so that it isn't an automatic let's go to India and get all of our honey.

Sometimes you got to look at the quality and therein lies the best part of what US honey produces is the best honey produced in the world.

Jim: Kim, as you were talking, I'm trying to understand is why people in those other parts of the world can produce honey so cheaply? Is it labor cost? Is it government subsidies? Why is it so much cheaper other places in the world?

Kim: Well, it's all of the above. One of the things that a lot of foreign, not a lot, but many foreign governments look at from a cash flow perspective is you don't have to own land to be a beekeeper, so if you don't have to own land you don't have to be very rich. If I'm a government I can give you 20 beehives for not much money. You can put them on somebody else's land, and then the government can come back and buy that honey from you and sell it wherever the market is. They can sell it a lot cheaper because they don't have a lot invested in it.

Jim: I had never looked at it that way.

Kim: Well, that's the big picture going on, and that Walgreen's jar of honey brought it all home to me what this report means, and what it's doing to our market, and the changes that are taking place in our commercial beekeeping industry. I hope the tariff settles that. I hope it helps commercial beekeepers in this country because like I said before, we produce the best honey in the world. No doubt about it.

Jim: Yes. Well, the thing that I was wondering that directly relates to me and this whole complex conversation is when I go over and give my neighbor a quart of honey, and it came from my bees, what was the monetary value of what I just gave her? Is it $1 a pound? That's nothing.   Or is it $300 a pound, my going price, which is unreasonable. I know. I'm joking. What's the value of that quart of honey that I gave her?

Kim: Across all of the states and the regional honey price report and Bee Culture's May issue a quart of honey is worth $20.95. That comes to about $7 a pound.

Jim: Yes. Okay.

Kim: A quart honey weighs three pounds, so that comes about $7 a pound.

Jim: Well, I guess I need to really drive home the point that this was made right here on your property, so this is some of your very own honey returned to you.

Kim: Exactly right.

Jim: There's got to be something other than just the monetary value to justify why I'm giving that away.

Kim: Well, $20 is a chunk of change in my book anymore. A quart of honey to a neighbor, just because you're a nice guy and you want to stay neighbors, isn't a bad offer.

Jim: Yes, $20 is half a queen, Kim.

[laughter]

Jim: I'm kidding again. [laughs]

Kim: You are actually. Let me tell you something, you are kidding, and I'll tell you why, it's because the USDA also tracks the things that beekeepers spend their money on. They spent last year commercial beekeepers average $20 a queen. That quart of honey is worth a queen. They paid $91 for a package of bees on average across all the country. A new cost them $125. The average commercial beekeeper in the US spent $4.29 per colony controlling Varroa last year.

Jim: Oh, just about $5 a colony.

Kim: Just now heading that direction. One of the other things that they spent money on is they cost just about $16 per colony feed costs last year. That's fall feeding, and then spring feeding again, and then probably feeding some of those nucs what have you.

Jim: Is that carbohydrates and protein, or did it break that down?

Kim: That didn't break that down.

Jim: Probably I bet you that's a mixed value there-

Kim: Yes.

Jim: -of protein and carbohydrate.

Kim: They're making per colony on average $265 per colony for pollination income. You take a look at that. How much honey do you have to produce at $1 a pound? [chuckles] You can see what's going on in the bigger picture.

Jim: Well, the bigger picture, Kim, and we have to stop, but the bigger picture is even bleaker I think because we're all discussing this cataclysmic decline in insect populations and in foraging fields where you're going to put bees, where you'll make these crops. In my area, I've said before corn, wheat, and soybeans, you're not going to do anything. It's a complex picture.

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Kim: I'll throw one more thing in there and then we got to go. Think of what climate change is doing here and in India and in Brazil and in Mexico. What's climate change going to do to all of this bigger picture? I got to run. I'll catch you next time, but it was fun going over all this, Tim.

Jim: Yes. It's a lot of numbers there. Thanks, everybody, who digested that, and give us a comment if you got one. Kim, thank you for educating me.

Kim: Well, it's fun to do, Jim. We'll see you next time.

Jim: Bye-bye.

[00:18:03] [END OF AUDIO]