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Adam Boot

Honey Price Collapse

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12 minutes ago, M4tt said:

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

 Not a fail for the brand owners. 

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3 minutes ago, flash4cash said:

 Not a fail for the brand owners. 

Fail for the beekeepers . 

 

Im not referring to the elite few catering to the top 10% of the worlds wealthy consumers 

Edited by M4tt

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2 hours ago, Jas said:

or stop making the stuff . 

Or start stockpiling the stuff because when demand comes back you cannot just run the Hives on an extra shift to catch up

Edited by Philbee

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11 minutes ago, Alastair said:

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.

My opinion is that if Hive numbers reduce as they probably will, it will not automatically facilitate larger crops immediately.
Hive health will take a little while to come back and that IMO is a significant factor in Beehive vigor / production.
There is no doubt in my mind either that OA will play an important part in the recovery of Hive health.


 

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16 minutes ago, M4tt said:

Fail for the beekeepers . 

 

Im not referring to the elite few catering to the top 10% of the worlds wealthy consumers 

But the beekeepers has not yet figure out that owning the brand is 90% of the requirements to a successful and sustainable profit.  

 

Until they do they will continue to be divided and conquered. 

 

Edited by flash4cash
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1 minute ago, flash4cash said:

But the beekeepers has not yet figure out that owning the brand is 90% of the requirements to a successful and sustainable profit.  

 

Until theyh do they will continue to be divided and conquered. 

 

So how do you apply that theory back to Fonterra , which is apparently a farmer owned co operative ( hasn’t been for years, although the farmer owners are bled dry funding it ) , has its own brands and while it looks big , vibrant and successful , isn’t .

DGC is an anomaly amongst dairy producers and sellers because of its closed door policy , exactly like Tatua 

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14 minutes ago, Philbee said:

Or start stockpiling the stuff because when demand comes back you cannot just run the Hives on an extra shift to catch up

I agree with Jas here.  Stockpiling just creates an overhang the depresses prices for longer.  It also ties up valuable cash in inventory.  @jamesc had the right idea the best thing for nz beekeepers to do if maintan the hives and do not pull honey crop. 

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1 minute ago, flash4cash said:

I agree with Jas here.  Stockpiling just creates an overhang the depresses prices for longer.  It also ties up valuable cash in inventory.  @jamesc had the right idea the best thing for nz beekeepers to do if maintan the hives and do not pull honey crop. 

Yes Flash you are right, however advice is subject to a 90/10 rule so 10% of Beeks will stockpile and 90 % will not
There are all sorts of  problems with leaving 50-60kg or more of Honey on.
Once the Crooks figure it out there will be a run on free Honey

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9 minutes ago, M4tt said:

So how do you apply that theory back to Fonterra , which is apparently a farmer owned co operative ( hasn’t been for years, although the farmer owners are bled dry funding it ) , has its own brands and while it looks big , vibrant and successful , isn’t .

DGC is an anomaly amongst dairy producers and sellers because of its closed door policy , exactly like Tatua 

DGC is successful for 4 reasons 

 

1. They own all the brands. 

2. They only produce milk they can sell.  If we do not need the milk then we do not produce it. We have a quota system. 

3. They have identified a high profitable product to produce that they have a competitive advanatge in. 

4.  They do not get sidetracked making anything but that 1 product. 

 

Fonterra is largely commodity business it share of branded products as a % of revenue is less than when it was formed. 

Edited by flash4cash
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9 minutes ago, Philbee said:

Yes Flash you are right, however advice is subject to a 90/10 rule so 10% of Beeks will stockpile and 90 % will not
There are all sorts of  problems with leaving 50-60kg or more of Honey on.
Once the Crooks figure it out there will be a run on free Honey

There is definitely merit is doing the exact opposite.  Boxing clever.  I not so sure people are not stockpiling though.  After taking to Rob from NZbeeswax it sounds like people are pulling the honey and putting it in drums. 

Edited by flash4cash

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Sad situation psychologically. It means they cannot accept current prices, perhaps because accepting current prices means accepting the end of the business. So they stick it in drums, meaning the inevitable does not have to be immediately accepted.

Edited by Alastair
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Or people are simply extracting, putting it in drums and intend to sell it.  I'd rather have a shed of honey to sell than none at all.

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Eventually some businesses will end up in the hands of receivers.  Who will take all that honey and dump into the market to get rid of it at any price.  Problem with honey is it last forever. 

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11 minutes ago, Alastair said:

Sad situation psychologically. It means they cannot accept current prices, perhaps because accepting current prices means accepting the end of the business. So they stick it in drums, meaning the inevitable does not have to be immediately accepted.

That's  a rather cynical view Alastair

Honey in drums is not much different than an investment or money in the Bank
 

Edited by Philbee

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8 minutes ago, Philbee said:

That's  a rather cynical view Alastair

Honey in drums is not much different than an investment or money in the Bank
 

It’s only an investment if you can afford to do so. 

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1 hour ago, M4tt said:

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 . 

 

$4 paid to you for honey in drums. 

 

then add the margin for the packer, the transportation, the warehousing, the marketer, the distributor and then the supermarket. 

 

$3 won’t cover all of the above. 

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2 hours ago, M4tt said:

DGC is an anomaly amongst dairy producers and sellers because of its closed door policy , exactly like Tatua 

DGC? As in Dairy Goat Cooperative, for those of us who don’t know but can google? 

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I’m not suggesting a price point the same as jam , as 50% of that is sugar and is obviously cheaper to make ,  but I think the difference in price is too great . I think even at $14 to $16 a kg , you would see a shift in demand . It would be interesting to see what the actual cost is per kg on the shelf , working backwards . I wouldn’t mind betting that a fair amount of the peak price paid for non Manuka was directly  related to buyers paying over the odds as a package deal to gain access to the Manuka in the shed . That has flowed through to the prices in the supermarket  .  It will be interesting to see how beekeepers react this season . As @Philbee mentioned , holding on to the honey may be an option , but those with last years honey in the shed may not be able to pay for a second seasons extraction without some income coming in . 

 

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2 hours ago, M4tt said:

So how do you apply that theory back to Fonterra , which is apparently a farmer owned co operative ( hasn’t been for years, although the farmer owners are bled dry funding it ) , has its own brands and while it looks big , vibrant and successful , isn’t .

DGC is an anomaly amongst dairy producers and sellers because of its closed door policy , exactly like Tatua 

 

I’d argue that the bulk of what fonterra sell is a commodity. They compete on price for bulk milk powder. It’s not really the same as honey is (from the consumers point of view) a bit of a premium product. The alternative sweeteners are nearly all cheaper - maple syrup comes to mind as something more expensive.

What do people look for when they buy honey?

Personally I like something a bit unusual, a nice label and not as pricey as Manuka. 

I haven’t bought honey in a fair while though, so I’m part of the problem in many ways.

Edited by cBank

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41 minutes ago, cBank said:

maple syrup comes to mind as something more expensive.

 

That depends if you buy it from the Quebecoise cartel, or outside of that.  The cartel has managed to control the price of Maple syrup for a long while, but as is always the case where an 'unreasonable profit' is perceived to be made others enter the market to disrupt that price.

http://digital.vpr.net/post/qu-becs-legal-maple-syrup-cartel-dictates-prices-vermont-maple-producers#stream/0

Edited by DeeGeeBee
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54 minutes ago, Beefriendly said:

DGC? As in Dairy Goat Cooperative, for those of us who don’t know but can google? 

Yes. They not the only one that does controled supply and quotas.  So does Zespri.  Both models are what the honey industry needs to think about if they want to make real change.  Over supply is crippling to any industry

Edited by flash4cash
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1 hour ago, Jas said:

It would be interesting to see what the actual cost is per kg on the shelf , working backwards

Say $18 kg supermarket price - gst ($2.38) - supermarket markup New world (45% or $4.86) countdown (35%) = $10.79

 

So at $4kg wholesale honey. Brand owners revenue is $6.79 minus there non honey cost. 

Edited by flash4cash

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2 hours ago, DeeGeeBee said:

 

$4 paid to you for honey in drums. 

 

then add the margin for the packer, the transportation, the warehousing, the marketer, the distributor and then the supermarket. 

 

$3 won’t cover all of the above. 

So there’s a problem. The idea that a larger percentage of total value is made by the people after extraction usually does not go down well with producers.

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26 minutes ago, M4tt said:

So there’s a problem. The idea that a larger percentage of total value is made by the people after extraction usually does not go down well with producers.

 

Totally agree. I left the UK in 2002 when 6 lamb loin chops in the supermarket costed 8GBP, but my farmer friends were paid a maximum 20GBP per beast.  No wonder so many farmers sell at the gate...

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Is the $4 kilo internationally NZ dollars or US dollars ?

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