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Adam Boot

Honey Price Collapse

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I have been away from this forum for a long time and hope I have not missed to much of the banter and calamity.

I am sure every one is busy tending hives and harvesting honey? The big question though, that has to be asked is whether or not it is the right honey and is it saleable. 

 

There is much talk about the drop in honey prices and how far it will fall. I thought I should comment, for what it is worth. 

 

We should exclude Manuka from this topic as from my experience and from the Brand I am personally involved with the issue is one of keeping up with demand. The constraints if any are finding enough product of high enough quality to meet the PURITI criteria. 

 

As for other honey types there is an acceptance internationally that NZ honey is of the highest quality and deserves a premium. Unfortunately, we as an industry pushed the prices to far. Artificially inflated prices on the back of Manuka blending was never sustainable and the result should have been expected. It was not a surprise that the MPI introduced a definition for Manuka. It was needed and was overdue. Without the introduction the entire Manuka Industry would have been placed at risk. 

 

Unfortunately while many honey producers will have enjoyed and reaped the rewards over the past few years the tide has turned. I talk with many international bulk buyers and they have been forced to place contracts with other countries for Clover, Bush, Honey dew etc. It cannot be a surprise that this happened. As NZ prices climbed over $10 the prices out of Canada and numerous EU countries was falling below $4. The prices for NZ honey simply could not be passed to the consumer. 

 

The market will correct itself and international buyers will return when NZ honey meets an acceptable international price point. Unfortunately this will take a couple of years as many of the large contracts are for 2 years or more. 

 

In the meantime we should use the opportunity to build market demand. Learn from Manuka. Establish and define the key attributes of other honey types. Develop supporting research. Flavour, colour and texture are not enough to command a premium so don't hang your hat on it. There needs to be a benefit above this to create a need. This cannot and should not be done by the honey packers and marketing teams alone. Beekeepers should lead the way. Find the honey with the added benefits and help the Marketeers help you. Invest on research and do this collectively if need be? 

 

Personally I would love to discover, develop and launch the next Manuka but this will only happen if the beekeepers lead the way and let me know what they know. 

 

If you have ideas let me know and we can get the ball rolling!

 

Adam

 

 

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Waiting for the poppywhackers & bleaters......

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Thanks Adam.

 

Good to have you back .

 

IMO the collapse of honey price is following the same path as other agriculture before it, and what beef and probably lamb will do next.

 

I believe at least some of the answer to all of the issues that these industries all have in common is a self destructive need to over produce.

 

The simple rules of supply and demand state that if supply is lower than demand, then price will go up. 

 

That , along with some type of reputation NZ has for producing safe food , should go most of the way towards correction.

 

Of course, many will not play that game and oversupply will keep price down 

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52 minutes ago, yesbut said:

Waiting for the poppywhackers & bleaters......

So funny but so true - Good to be back

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2 hours ago, M4tt said:

Thanks Adam.

 

Good to have you back .

 

IMO the collapse of honey price is following the same path as other agriculture before it, and what beef and probably lamb will do next.

 

I believe at least some of the answer to all of the issues that these industries all have in common is a self destructive need to over produce.

 

The simple rules of supply and demand state that if supply is lower than demand, then price will go up. 

 

That , along with some type of reputation NZ has for producing safe food , should go most of the way towards correction.

 

Of course, many will not play that game and oversupply will keep price down 

Would be nice to say beef n lamb have finally reached a sustainable level.

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36 minutes ago, Anne said:

Would be nice to say beef n lamb have finally reached a sustainable level.

It would like to agree, but sadly lamb is only high because farms won’t risk moving cattle on, so what option is there other than sheep to graze the food, of which there have been declining numbers year on year, creating low supply and excessive demand from a new market. It will balance back out again , but some will feel the pain. 

Beef production here has ramped right up as bobby calves become an unpopular option, which will create over supply , especially  as massive countries across the other side of the world are also ramping up. 

That that goes up in a hurry always crashes down at some point .

 

Beef and Lamb are doing a good job promoting our products, but they are not the buyers. They are farming worlds @Adam Boot equivalent 

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Nice .. some positive dialogue on marketing. It has to revolve around quality and selling into a top end market to a consumer who will pay a little bit more for something a little bit more special. 

We have that in new Zealand.  We have rigorous traceability measures in place. We have the ability to implement and test for zero chemical content. We have a zero antibiotic regime and now with PhilBee's staple we have the abilty to commercially produce honey with out the use of synthetic varroa treatements. That has to be a world first.

We need to strike while the iron is hot and tell the world our remarkable story so that our product becomes No 1 on their shopping list.

 

We need a marketer to go out and tell the NZ honey story.  I would love to do that, but seem to be too busy looking after my bees . Case in point , today we did over 700 k's checking out a site . It was'nt very environmentally friendly, but to produce what the market wants ...... Manuka ...... it was a necessary evil. 

 

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I often wonder if instead of targeting the wealthy with a product that’s unaffordable to everyone else, why not produce the same product to the same high standard that the masses can afford, not at rock bottom warehouse prices, but a ‘good’ sustainable price that keeps both the consumer interested and the supplier out of product ?

 

Or is that too simplistic 

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3 hours ago, Adam Boot said:

So funny but so true - Good to be back

There was some stuff about kanuka having some health benefits .

Have you heard any more .

Honey will only have real value if it is more than a food.

Meanwhile beeks should thank their luck that its a protected industry .

If supermarkets would just drop their prices and get the man in the street treating it as a staple rather than a luxury it would help keep beeks afloat till things come right .

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7 minutes ago, kaihoka said:

If supermarkets would just drop their prices and get the man in the street treating it as a staple rather than a luxury it would help keep beeks afloat till things come right .

how much honey do you think new zealanders could buy and use per annum? and how much do you think nz beekeepers produce?

it's a bit like expecting the local market to purchase all milk products made here if exports fell over somehow..

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44 minutes ago, M4tt said:

good’ sustainable price that keeps both the consumer interested and the supplier out of product ?

What price point are you thinking? 

 

I am with you on the market lead supply approach.  Flooding the market with honey only halves the price and increases the costs per kg. 

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1 minute ago, tommy dave said:

how much honey do you think new zealanders could buy and use per annum? and how much do you think nz beekeepers produce?

it's a bit like expecting the local market to purchase all milk products made here if exports fell over somehow..

That is very true .

But anything is better than nothing .

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If Honey prices stay low it will be the Marketeers who find themselves out of a job
Comvita was started by beekeepers who wanted to sell their Honey and that will happen again
I will do it if I have too
Beekeepers will co- op and rise from the ashes, its the only logical way forward

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Rewarewa honey surely has a place as a quality product. It does not flow every year and has properties that require some investigation. 

 

Also if you compare honey to beef and lamb there is a massive marketing campaign by an independent (to farmers) body, I don't see this happening for beekeepers. Please let me know if I am wrong; I live at the end of a 2km dirt driveway and don't get out much. 

Diary farmers have Fonterra, beef and lamb farmers appear to have BeefandLamb campaigns with olympic athletes........ it appears to me honey is left to individual marketers to promote. A hard task in an international climate. 

The government for a few years of late has been promoting within NZ at least the idea that honey is the next big thing. Have we seen a high level of input from them to assist in driving a growth market? Is there a honey board? batting for the honey industry offshore or is left to individual marketers? 

 

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8 minutes ago, Jay said:

Please let me know if I am wrong; I live at the end of a 2km dirt driveway and don't get out much. 

He wears check trousers with a check shirt, and the Hat....
 

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patterned shirt and pants thanks Philbee

 

 

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I had a quick look on Coundowns online shop to compare a few prices from a consumers point of view . Clover honey ranges from about $19/kg to $25/kg . By comparison , jams are between $7/kg and $11/kg . It’s not hard to see where the consumers money will be going . Same deal with a leg of lamb competing with a chook .

 The way I see it , there’s three types of honey . Obviously Manuka , then good quality mono florals , that one can attach a story to and command a premium , and then there’s multiflora that is still a really nice eating honey , but one that Mum can afford to put on her kids toast . Obviously more work goes into producing the first two , so one would expect a better return . 

 After reading what’s happening internationally ,  I don’t think much multiflora will be going offshore in a hurry , so we best start encouraging kiwis to increase consumption , or stop making the stuff . 

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@Jay internationally it is dark strong honeys that have been used medically. 

Like thyme and manuka and ulmo honey .

We only hear about the wonderfull properties of manuka but some other honeys are just as good .

I have just read a paper on using ulmo honey and ascorbic acid to heal up ulcers.

The publicity given manuka will be taken advantage of to promote these honeys medically , now that the public sees honey as a medicine.

It is a shame for the manuka honey industry  who will no longer have the field to themselves .

But with the current issues with antibiotics its good for humanity .

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1 hour ago, Jas said:

Clover honey ranges from about $19/kg to $25/kg . By comparison , jams are between $7/kg and $11/kg . I

 

1 hour ago, Jas said:

so we best start encouraging kiwis to increase consumption , or

is any commercial beekeeper able to produce and sell their honey at the price a competitive product would fetch?

And just how much of the local crop can Kiwis realistically consume even if it was low cost?

I saw figures about honey consumption that indicated about 1kg  average per year - and usually households with children consumed far more than adult only households.

NZs domestic market wont mop up much if honey remains considered an alternate  to jam.

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Beech honeydew is very high in antioxidants.

Its not going to be a quick fix it will take years to make any kind of inroads into selling our other NZ honeys offshore.

 

I hate to be so pessimistic but it’s not looking good for many nz beekeepers right now. 

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1 hour ago, Jas said:

I had a quick look on Coundowns online shop to compare a few prices from a consumers point of view . Clover honey ranges from about $19/kg to $25/kg . By comparison , jams are between $7/kg and $11/kg . It’s not hard to see where the consumers money will be going . Same deal with a leg of lamb competing with a chook .

 The way I see it , there’s three types of honey . Obviously Manuka , then good quality mono florals , that one can attach a story to and command a premium , and then there’s multiflora that is still a really nice eating honey , but one that Mum can afford to put on her kids toast . Obviously more work goes into producing the first two , so one would expect a better return . 

 After reading what’s happening internationally ,  I don’t think much multiflora will be going offshore in a hurry , so we best start encouraging kiwis to increase consumption , or stop making the stuff . 

Absolutely. So there is the price per kilo answer that consumers will pay. There is no jam sitting around in storage that I’m aware of because it’s perceived as being too expensive. Honey is a direct competitor to jam and at $20 a kilo or there abouts, the masses choose jam, full well knowing that honey is probably a ‘better’ product , but their extra $$, if they have them , are better spent elsewhere. 

 

There is no point at all having the best food in the world available to local consumers, but they can’t afford it, because guess what, tourists come here too and comment that everything here is expensive, so they won’t buy it either. 

 

I am am not a fan at all of niche marketing because it instantly blocks 90% of potential consumers, which I think is obviously bad for business. It stops the money go round dead......... bad for all of us .

 

 

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15 hours ago, Adam Boot said:

As NZ prices climbed over $10 the prices out of Canada and numerous EU countries was falling below $4. The prices for NZ honey simply could not be passed to the consumer. 

 

Just some background to that for anyone interested. Going back say, 5 or 6 years, US beekeepers were struggling financially because supercheap Chinese honey both real and fake, was being smuggled into the country. It was coming in 200 litre drums (44 gallons to them) usually mislabelled as some other product. A large US honey packer was a big buyer, and a number of smaller players. In some instances they were getting this stuff for less than $1 a kg. So they were not keen to offer too much for good quality US honey. The beekeepers knew this was happening, but a combination of working long, hard hours, and being broke, kept them from doing much about it.

 

Then a breakthrough, the large importer of illegal honey was busted and overnight supply stopped, and prices to beekeepers went up. For 2 or 3 years they had it good, really happy, getting around $4 a kilo. But over time, packers were investigating ways to import Chinese product legally, and last couple of years enough has come in through legal channels to depress prices, beekeepers are feeling the pinch again.

 

US laws around product labelling are different to ours. Here, if you buy a pot with a big HONEY written on it, you know you are getting honey. Not so in the US. Fake honey and blends of fake honey can be deceptively labelled and the consumer can have trouble figuring just what they are getting. The fake stuff is cheaper and many consumers buy on price.

 

11 hours ago, M4tt said:

 not at rock bottom warehouse prices, but a ‘good’ sustainable price that keeps both the consumer interested and the supplier out of product ?

 

That price is currently $4. As exporters we accept what the customers will pay, and they pay what they can buy other quality honeys for. Best I can tell, it's $4 and will stay there for some time.

 

Yesterday a very kind lady concerned about my bee stings put some skin cream on (which was a bit of a joke but hey), anyhow I read the label it was manuka and aloe vera. Thing is, kanuka is a much better skin product than manuka, but manuka is seen as a high value magic cure all for everything, so, the producer puts manuka in the cream instead of the better kanuka, cos he knows what is going to sell.

 

Which shows it is a matter of perception. A thing created by marketing.

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So the $4 figure probably is right , which means $7 or there abouts in the supermarket is the price our local consumers should be paying . 

At that price it would probably not sit on shelves for long as our international customers that recognise our honey is honey , buy it as well and take it home in their suitcases , like baby formula .

 

Again, a simplistic view , but clearly the current model is a fail 

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5 minutes ago, M4tt said:

, but clearly the current model is a fail 

As is our whole socio - economic model !

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There's another aspect to this also, which is that US commercial beekeepers, and especially Canadian commercial beekeepers, make huge honey crops compared to us, they can live pretty comfy at $4 a kilo.

 

But here, i was told the average crop was 18 kg's a hive? Sounds unbelieveable and not sure it's true but that's what I was told. If true, 18 kg's a hive at $4 isn't going to keep a lot of people in business too long, hive numbers will drop.

 

The average crop used to be 30 ish kg's a hive. Part of the reason for the recent drop could be people knowingly aiming for a low crop in order to get high value manuka, the other reason could be overcrowding, and I definately see that and it's effects in one area I have hives. As people get weeded out, overcrowding will lessen.

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