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Adam Boot

Honey Price Collapse

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Someone is pulling someone’s plonker here.

I spoke with a marketer several months ago who laughed at me and said there was in excesd of 30,000 tonnes of product looking for a home.

I spoke with another packer who commented that sales, both domestic and export were strong.

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They could both be right. That packer could be doing really well for themselves. 

 

If these figures are correct 8,000 ton export and 5,000 ton domestic so 13,000 vs 27,000 production then wow that is a massive overproduction. How has it got this big? 

Edited by flash4cash

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22 minutes ago, flash4cash said:

They could both be right. That packer could be doing really well for themselves. 

 

If these figures are correct 8,000 ton export and 5,000 ton domestic so 13,000 vs 27,000 production then wow that is a massive overproduction. How has it got this big? 

image.png.a26af54df652245bed21fb10ee0db2d6.png

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1 hour ago, Emissary said:

This statement is not supported by the data.

Scandata - Total supermarket sales.....

  • Moving Annual Total (MAT) July 2018 volume sales of honey were down 7.1% on a year ago.
  • MAT to November 2018 volume sales of honey are down 5.8% on a year ago.
  • Last quarter sales to November are down 0.5% on same quarter a year ago - the decline appears to be slowing... maybe due to the lower pricing starting to show up in supermarkets.
  • Total annual honey sales in supermarkets - 2,154 tonnes (MAT to November 2018)
  • Per capita consumptionm of honey sold in supermarkets is 450gms.  10 years ago this was 900gms and 20 years ago 1.5kgs.
  • Total Exports this year will be around 7,900 tonnes ( 6,573.4 tonnes to October)  Last year 9,635 tonnes.
  • Total production less exports for last 5 years - 65,839 tonnes (2013 - 2018 AsureQuality report and export statistics).
  • Total domestic markets??  I'm going to be really optimistic here and say 5,000 tonnes/yr, leaving a 40,000 tonne surplus from the 66,000 tonnes.
  • 879,758 registered hives (August). 10 year average crop 30.5 kg/hive. Expected average crop for 2019 - 26,800 tonnes.
  • Total supply 40,000 tonnes plus new crop - 67,000 tonnes.

Doubling supermarket sales will have a negligible  impact on this situation.

Value over volume? The question will still be that both major chains do not increase honey offering and shelf space simultaneously unless the see growth either in value or volume. 

There are some big holes in these numbers and some big assumptions. 

  • Supermarkets are only one sales Chanel for honey and the per capita consumption sold in supermarkets is not a reflection of the nations per capita consumption. 
  • Are you saying that you believe that NZ is sitting on stock of 40,000 tonnes? 
  • Honey in a jar does not represent the largest domestic volume. Your domestic 5000 is underestimated
  • Your expected 2019 crop is probably over optimistic. MPI suggest 15-20,000 tones annually depending on weather fluctuations. I would not doubt the possibility of being over 20K but I doubt by much. 
  • There is not 67,000 available tonnes to sell next year. Not even 40,000. There is a surplus of unsold and this is growing I will agree. This is non Manuka and is specifically due to lower cost of honey available from other producing countries. 

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I do not like that graph. Every time i see that exponential growth on a chart it is followed by a steep decline

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55 minutes ago, jamesc said:

Someone is pulling someone’s plonker here.

I spoke with a marketer several months ago who laughed at me and said there was in excesd of 30,000 tonnes of product looking for a home.

I spoke with another packer who commented that sales, both domestic and export were strong.

If you take current surplus and expected production surplus from this years harvest then 30,000 could be worthy number. 

Both domestic and export are strong for some packers, some brands and some types of honey. It depends on what you are selling not what is being harvested. 

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14 minutes ago, Emissary said:

image.png.a26af54df652245bed21fb10ee0db2d6.png

The answer to that is easy. MPI Manuka honey definition combined with greater international competition at lower prices for non Manuka honey. Result is uncompetitive honey surplus. If the price of non Manuka Honey drops to $4 then you sell it all. 

 

15 minutes ago, Emissary said:

image.png.a26af54df652245bed21fb10ee0db2d6.png

If the growth hive numbers is aimed largely at Manuka harvesting then the surplus growth is not necessarily going to grow at the same pace. If NZ beekeepers cannot produce at the same price as international producers then new premium markets need to be developed for non Manuka honey types. 

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One potential area where there maybe sales that are not recorded is the grey trade that people buy from supermarkets and send oversea.  It is possible to buy large qualities if product direct from Countdown and ship it. I know this is happening to goat infant formula as one of my friends who use to work in head office told me.  One customer was moving about $6 million a year that way.  DGC did not know about this when i told them. 

Edited by flash4cash

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I see extreme stress on the horizon for Manuka.
While Manuka may command a premium going forward I see that premium shrinking.
I also see intense competition for Manuka sites, possibly from small but significant co-ops.
One only needs to look at the reported cost per hive data to see that there are some lumbering monsters out there and one also just needs to read the likes of Adams post with regard to the significant steps that Honey goes through to market once it leaves the field.
There are people out there who can and probably will turn that notion upside down and inside out.
My advice, Beeks need seek independent advice.
Having said I have no doubt we are in for a rough ride, possibly worse than anyone has considered possible.

Edited by Philbee

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33 minutes ago, Adam Boot said:

Value over volume? The question will still be that both major chains do not increase honey offering and shelf space simultaneously unless the see growth either in value or volume. 

There are some big holes in these numbers and some big assumptions. 

  • Supermarkets are only one sales Chanel for honey and the per capita consumption sold in supermarkets is not a reflection of the nations per capita consumption. 
  • Are you saying that you believe that NZ is sitting on stock of 40,000 tonnes? 
  • Honey in a jar does not represent the largest domestic volume. Your domestic 5000 is underestimated
  • Your expected 2019 crop is probably over optimistic. MPI suggest 15-20,000 tones annually depending on weather fluctuations. I would not doubt the possibility of being over 20K but I doubt by much. 
  • There is not 67,000 available tonnes to sell next year. Not even 40,000. There is a surplus of unsold and this is growing I will agree. This is non Manuka and is specifically due to lower cost of honey available from other producing countries. 

In a decreasing value market, decreasing volume creates a decreasing total value.   All are going down.  Unless you provide some data and its source, you are simply provding annecdotes supporting your preferred belief system.  This does not help us.

 

In the past supermarket sales have been surveyed (3 that I know of) to be 77-88% of consumers' purchases of honey.

The data is what is available.  I used simple arithmetic to process it.  The data and I have no "opinion".  It is what it is.  You on the other hand provide no source data, and no calculations... yet say this information is "full of holes". 

If honey in jars is not the largest volume, then something else is larger.  Care to share and substantiate that claim with some data?

The 2019 crop is predicted by multiplying the hive numbers by the average production per hive.  MPI don't "suggest" anything.  The data is derived from the apiary register, and are understated ( hands up those that are declaring more hives than they have) and AsureQuality's annual crop assessments.  The trouble with now stating that these "aren't right" is that in the past the numbers would have put us into negative stock.... an impossibility.

27 minutes ago, Adam Boot said:

Both domestic and export are strong for some packers, some brands and some types of honey. It depends on what you are selling not what is being harvested.

Quoting "some packers" as though this will make the surplus go away overlooks the whole picture.  The exports this year are down 20% on last year.  The domestic packed honey sales in supermarkets are down on last year.  

The biggest issue is our hive numbers and the crop they now produce. 

 

image.png.acc1149a70ccfced59d74240cc24ada0.png

 

We have produced over 30 kgs/hive in 12 out of the last 16 years with a high of 40.7 kg/hive in 2003 (and 40.8 in 1994)

Conditions are now looking excellent across the country.

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18 minutes ago, flash4cash said:

One potential area where there maybe sales that are not recorded is the grey trade that people buy from supermarkets and send oversea.  It is possible to buy large qualities if product direct from Countdown and ship it. I know this is happening to goat infant formula as one of my friends who use to work in head office told me.  One customer was moving about $6 million a year that way.  DGC did not know about this when i told them. 

Unfortunately this makes things worse for the "stock" position.

Supermarket sales of product including pallet lots across the dock are counted in the scan data.  They then get counted again as an export when the export entry is created.  Unless someone is fraudulently declaring goods at export (why would they?) i.e. sumuggling, we now have two sales entered from the same honey, once in the scan data and again as an export.

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There was a time when honey was just labelled as honey. Now we have pure, New Zealand, produced with organic principles, unadulterated, tested to the nth degree et cetera which has the unfortunate effect of making consumers wonder what is wrong with plain old honey.
Even with manuka honey the only reason we needed a standard was there were so many people out there who were just plain dishonest. It's not hard to tell manuka honey from others.
Now for the last few years of my beekeeping life I have to suffer for the greed, dishonesty and bull####  that a few greedy corporate's and individuals have brought into the world of bees.
At least I have years of experience on how to run a business on the smell of an oily rag. I shouldn't say told you so that I have been predicting all this for a few years now.
One last thing to look forward to. In the past every time there has been a major price correction there has also been a spike in AFB through neglected hives, and there are a lot more hives out there to be neglected then the used to be.
 

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Interesting I thought they would collect sales at he till.  I know they track each sale in each store per week. 

 

It may not come under export data as i understand they break it down to 2/3 cans per shipment and send it in.  This way there get around the system and they do not have to pay import duties. 

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28 minutes ago, Emissary said:

Conditions are now looking excellent across the country.

 

Im not sure what part of the country you’re looking at, but going by the weather over the last three weeks just about everywhere has been less than ideal. 

Wet, windy and temperatures well below usual for beekeeping at this time of the year.

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2 minutes ago, Bron said:

 

Im not sure what part of the country you’re looking at, but going by the weather over the last three weeks just about everywhere has been less than ideal. 

Wet, windy and temperatures well below usual for beekeeping at this time of the year.

 

Today....

https://www.windy.com/-Temperature-temp?temp,-41.121,170.112,6,i:pressure,m:cpPakRy

Tomorrow

https://www.windy.com/-Temperature-temp?temp,2018-12-08-03,-41.121,170.112,6,i:pressure,m:cpPakRy

Sunday

https://www.windy.com/-Temperature-temp?temp,2018-12-09-03,-41.121,170.112,6,i:pressure,m:cpPakRy

Monday

https://www.windy.com/-Temperature-temp?temp,2018-12-10-03,-41.121,170.112,6,i:pressure,m:cpPakRy

Then cooler mid week and good again Friday, Saturday, Sunday..... With half of December and January to go.....

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Bay of Plenty the place to bee.

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I was a teacher, I kinda like data, it tells you stuff, sometimes it validates something you already knew, other times it surprises you and you learn from it and it changes your thinking and your actions. 

 

The other her problem with data is that everybody uses it in a different way. Data can also be used in a way that highlights areas that people want highlighted.

 

Im curious about how Honey data is collected. Thing is it doesn’t come from the harvest decs, cos they’re all about boxes, some of those boxes could be half full or chockablock. So can someone tell me where this data comes from? I’ve never been asked how much honey our business produces by any official ever. I know what our apiary averages are and our overall average, but I’m the only one. I know that I provide weights when it’s sold. So who shares the data. Can the honey marketers tell us if they provide data to MPI for their data?

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5 minutes ago, Emissary said:

 

Ah! The timing on some things to do with actually producing a specific type of honey crop are weather dependant, for some, that time may have been and gone. 

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37 minutes ago, Bron said:

Im curious about how Honey data is collected

AsureQuality survey beekeepers throughout NZ and average their survey for each region.  They then multiply the production per hive by the numbers on the apiary register for each region.

So we are reliant on the honesty of beekeepers being surveyed for the production per hive.  Being variable and somewhat suspicious characters with egos, large tax bills etc, one wonders if they will over or under state their production.  Perhaps it averages out.....

The apiary register is almost certainly understated.  In Nelson during the EFB scare around 25% to 30% more hives were found that were not on the register.  Similar numbers turned up when Varroa arrived, and apiary surveys by the NBA etc. using helicopters support that again.

So how might these numbers pan out?   The highest crop in the last 10 years was 39.4 kgs, the lowest was 18.7kgs.  The lowest hive "estimate" is the register number of 879,578.  The highest is that number plus 30% or 1,143,685 hives.    So our likely crop range is between 16,451 and 45,061 tonnes.

 

So how "accurate" are the AsureQuality figures?   Over time, not too bad.  Taking numbers between two years where there is a very low carryover, one can assume that all production disappears into the export or domestic market.  Given the accuracy of the export stats and the local scan data, plus others, we can get a feel for how accurate the crop estimates are.

Edited by Emissary
Spelling!!
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Thanks for that @Emissary, so the figures are actually a guesstimate! :IMG_0385:

Essentially no one knows how much honey is produced in NZ.

 

 

 

 

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1 hour ago, Bron said:

 

Im not sure what part of the country you’re looking at, but going by the weather over the last three weeks just about everywhere has been less than ideal. 

Wet, windy and temperatures well below usual for beekeeping at this time of the year.

Wet and windy maybe ..... but with luv and sugar syrup they have been busy making babies!

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5 hours ago, Bee Good said:

Bay of Plenty the place to bee.

No West Coast

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9 hours ago, Emissary said:

This statement is not supported by the data.

since when did you expect a marketer to rely on truth ;)

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Global sales from natural honey exports by country totaled US$2.4 billion in 2017.

Overall, the value of natural honey exports appreciated by an average 15.2% for all exporting countries since 2013 when natural honey shipments were valued at $2.1 billion. Year over year, global exports of natural honey increased in value by 7.7% from 2016 to 2017.

Among continents, European countries accounted for the highest dollar value worth of natural honey exports during 2017 with shipments amounting to $937.9 million or 39% of international honey sales. That percentage compares with 24.3% from Asian exporters, 15.9% from Latin America (excluding Mexico) plus the Caribbean, and 12.4% from Oceania (mostly New Zealand trailed by Australia). Smaller percentages came from North America (8%) then Africa (0.4%).

The 4-digit Harmonized Tariff System code prefix for natural honey is 0409.

 

Natural Honey Exports by Country

 

Below are the 15 countries that exported the highest dollar value worth of natural honey during 2017.

  1. China: US$270.7 million (11.3% of total natural honey exports)
  2. New Zealand: $268.1 million (11.2%)
  3. Argentina: $183.2 million (7.6%)
  4. Germany: $145.6 million (6.1%)
  5. Ukraine: $133.9 million (5.6%)
  6. Brazil: $121.3 million (5%)
  7. Spain: $110.3 million (4.6%)
  8. Mexico: $104.7 million (4.4%)
  9. India: $104 million (4.3%)
  10. Hungary: $97.3 million (4%)
  11. Belgium: $77.3 million (3.2%)
  12. Vietnam: $70.6 million (2.9%)
  13. Canada: $60.6 million (2.5%)
  14. Romania: $52.1 million (2.2%)
  15. Bulgaria: $48.1 million (2%)

By value, the listed 15 countries shipped over three-quarters (76.9%) of all natural honey exports during 2017.

Among the top exporters, the fastest-growing natural honey exporters since 2013 were: Ukraine (up 152.9%), Brazil (up 124.1%), New Zealand (up 91.3%) and India (up 37.4%).

Five countries posted declines in their exported natural honey sales: Vietnam (down -21.6%), Argentina (down -13.9%), Mexico (down -6.8%), Romania (down -4.5%) and Canada (down 2.6%).

Edited by Philbee
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Natural honey might be stretching it for one of two of those countries.

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