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Honey Producers Co-op Meetings Update

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23 hours ago, Adam Boot said:

By 2021 the landscape will be very different.

Understatement of the Decade.
Events are now unfolding rapidly 

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38 minutes ago, Philbee said:

Understatement of the Decade.
Events are now unfolding rapidly 

 

Can you expand on that ?

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1 hour ago, frazzledfozzle said:

 

Can you expand on that ?

It's Saturday morning and he's just opened the newspaper.

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3 hours ago, frazzledfozzle said:

 

Can you expand on that ?

World economies are currently extremely vulnerable to daily events and whims of China/USA trade and other Geopolitical tensions.
The situation is knief edged and will continue to be so for the foreseeable future.
The China / US marriage is in ruins and currently could be described as similar to a married couple in the process if a divorce but still sharing the same house and jointly managing their joint businesses.

Its now a loveless partnership of convenience and necessity which is more inclined toward  deterioration than reconciliation.

In the short term NZ could enjoy favorable approaches from both the US and China but as its been said many times, there are no economic winners in an all out trade war.  
 


 

Edited by Philbee
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1 hour ago, Philbee said:

World economies are currently extremely vulnerable to daily events and whims of China/USA trade and other Geopolitical tensions.
The situation is knief edged and will continue to be so for the foreseeable future.
The China / US marriage is in ruins and currently could be described as similar to a married couple in the process if a divorce but still sharing the same house and jointly managing their joint businesses.

Its now a loveless partnership of convenience and necessity which is more inclined toward  deterioration than reconciliation.

In the short term NZ could enjoy favorable approaches from both the US and China but as its been said many times, there are no economic winners in an all out trade war.  
 


 

Wow, that is a little bit heavy for me and certainly not what I was referring to at all. Geopolitics and tension is not the cause of NZ honey industry issues. Remember we produce 20,000 tonnes in a 2 million tonne market. Negligible. If we can't find a market for such a small quantity of superior quality product it is our problem and no one else. 

The NZ market has enjoyed over inflated prices for non Manuka honey. Previous lack of international export worthy Manuka Honey standards fuelled this. The MPI Manuka Honey Science Definition for Mono Floral has rightly forced a correction. The historical inflated prices made NZ non Manuka unsalable on the global market and longterm partnerships, contracts and markets were lost. 

With price adjustment these markets will become available again over time and will continue to grow. 

The second part of the NZ problem is a legacy of the Manuka boom. Many investors piled into a market that they did not understand and before they understood the effect of the approaching MPI regulation changes. A lack of due diligence has been rife. Companies valued on hive numbers and inflated yields of expected Manuka have created a debt bubble. 

Much of the expected harvests are not at forecast yields and are no longer considered Manuka Honey. Business models were built on false revenue value expectations with debt burdens that are now inappropriate. 

Banks understand the over valuation problem now. They understand the honey markets and values better. 

The fact is that every man and his dog thought that there was quick money to be made. Then they all thought they could make more by putting it in a jar themselves, putting a label on it and believing they had a brand. 

The reality is that very few labels have had tangible market penetration and fewer have become or are brands in the true sense. Consolidation and collapse is happening a rapid rate. What is left will be stronger more efficient and will take the industry to a more sustainable next level. 

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Well said Adam, talking to a packer yesterday with overseas funds, the funders were hinting at "make this work, or make this disappear" but don't expect any more funds.

Joint ventures is the way forward, both between different packers and between packers and beekeepers.

There will be "blood on the floor" before this gets better, beeks/packers have to decide where they can or cant see them selves and start to act now.

Commercial Beekeeping is not a birthright, its a business that has all the pros and cons of being so.

A very good Commercial beekeeper is no different to a piss poor one when you both cant sell your product, the banks IRD etc don't care.

When smp's were taken off farming in the 70's lots of very good farmers hit the wall because they didn't understand the business side of farming.

Beekeeping in NZ is in a very similar place, consolidation is going to be needed, the hard part is who decides where /how that will happen.

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1 hour ago, Adam Boot said:

Geopolitics and tension is not the cause of NZ honey industry issues

You are right about that, world events have not created the current situation but world events are going to affect our recovery 

Its a bit of a double whamy 

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@Dennis Crowley when you talk about joint ventures who do you see as those Joining together ?

does the beekeeper who produces good Manuka honey need to look at a JV ?

what of those producing multi or low marker mono Manuka do they have anything to bring to the JV table?.

What of companies like Comvita who already have a few JV’s which are ultimately bleeding money it hasn’t helped them to be profitable .

 

I’d be interested to know how you or anyone else on the forum see’s it all happening 

 

and also is there a place in the future for those that produce non manuka honey ?

Edited by frazzledfozzle
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When I went into business about 25 years ago I was budgeting on earning $100 a hive ,with inflation that figure would now be about $170 a hive. At the time 25% of New Zealand's crop was exported and the rest consumed locally. New Zealand's production in 1994 was 12,000 tons from 290,000 hives. This season has an estimated crop of 20,000 tonnes From 890,000 hives. Both those years are top years for their era.

That's 600,000 more hives to produce 8000 tons more than we used to.

I know at the moment that selling honey for decent prices is a problem but I think we also need to look at what is happening.

Average production per hive these days is pathetic. Overstocking is obviously having a serious effect almost certainly compounded by poor beekeeping practices and keeping bees in sub optimal places. Beekeepers, banks and investors need to have a very careful look at just what is happening and why.I believe there are many beekeepers out there whose production is so abysmal it doesn't matter what they get paid for their honey because their production is just so abysmal they will never cover their( often way too high) running costs.

 

 

 

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49 minutes ago, john berry said:

When I went into business about 25 years ago I was budgeting on earning $100 a hive ,with inflation that figure would now be about $170 a hive. At the time 25% of New Zealand's crop was exported and the rest consumed locally. New Zealand's production in 1994 was 12,000 tons from 290,000 hives. This season has an estimated crop of 20,000 tonnes From 890,000 hives. Both those years are top years for their era.

That's 600,000 more hives to produce 8000 tons more than we used to.

I know at the moment that selling honey for decent prices is a problem but I think we also need to look at what is happening.

Average production per hive these days is pathetic. Overstocking is obviously having a serious effect almost certainly compounded by poor beekeeping practices and keeping bees in sub optimal places. Beekeepers, banks and investors need to have a very careful look at just what is happening and why.I believe there are many beekeepers out there whose production is so abysmal it doesn't matter what they get paid for their honey because their production is just so abysmal they will never cover their( often way too high) running costs.

 

 

 

When I first started beekeeping in the far north we were getting 5 highs full depth on the first Manuka flow and then there was the Kanuka Bush honey which was also massave now I struggle to get 11. 6 kgs per hive on the Manuka flow on a average to good season. 

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Knowing how long to hold on?

My operation of 3500 hives is in real trouble I have operated through some tough times over the past 20 years, 3$ kg honey but reasonable crops. 

Once a year local council visits, now twice a year ,wages significantly higher and rising, fuel only cost 48 cents per liter, insurance premiums higher basically everything has gone up significantly. 

Now today 2019 if I'm lucky I might be able to sell at half production costs ,borrow the other half to make it to this time next year but if the industry at best is still limping along the doors will have to shut ,staff layed off hives givin away .

Knowing how much honey is sitting in sheds just around me scares the hell out of me (non manuka) .

Are non manuka products moving at all?

Is white clover selling?

 

Is this game over?

 

@3-5$ kg I believe it is

@6-8$ kg we will survive.

@ no sale before next crop harvest starts 10s of thousands of hives will be left to rot in the field.

 

This is a nation wide problem that will affect the entire country of beekeepers. 

Even the guy that is selling his honey today may think they are safe but his neighbor may not have sold .

 

Look out for each other... the real test starts from today and without a change or perhaps a co-OP situation we as farmers will never be able to make wise business decisions when the packer that you have religiously supported for many years tells you sorry son but we don't want your product today, and probably not tomorrow. 🤢

 

Years of support for 5 mins notice.

 

Although  the concept of a co-OP to some may seem along way off ?

(Including me) thanks for the info@Adam Boot but we don't really need a list of why it won't work.

 

What we need is solid advise on how to make it work, government funding will help maybe ?  

I love my bees,love my job but the dark cloud is getting darker ....

 

 

 

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1 hour ago, Nuc_man said:

when the packer that you have religiously supported for many years tells you sorry son but we don't want your product today, and probably not tomorrow. 🤢

Not my business, but you don't know his position, his inventory may be bigger than yours....

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2 hours ago, Nuc_man said:

Knowing how long to hold on?

My operation of 3500 hives is in real trouble I have operated through some tough times over the past 20 years, 3$ kg honey but reasonable crops. 

Once a year local council visits, now twice a year ,wages significantly higher and rising, fuel only cost 48 cents per liter, insurance premiums higher basically everything has gone up significantly. 

Now today 2019 if I'm lucky I might be able to sell at half production costs ,borrow the other half to make it to this time next year but if the industry at best is still limping along the doors will have to shut ,staff layed off hives givin away .

Knowing how much honey is sitting in sheds just around me scares the hell out of me (non manuka) .

Are non manuka products moving at all?

Is white clover selling?

 

Is this game over?

 

@3-5$ kg I believe it is

@6-8$ kg we will survive.

@ no sale before next crop harvest starts 10s of thousands of hives will be left to rot in the field.

 

This is a nation wide problem that will affect the entire country of beekeepers. 

Even the guy that is selling his honey today may think they are safe but his neighbor may not have sold .

 

Look out for each other... the real test starts from today and without a change or perhaps a co-OP situation we as farmers will never be able to make wise business decisions when the packer that you have religiously supported for many years tells you sorry son but we don't want your product today, and probably not tomorrow. 🤢

 

Years of support for 5 mins notice.

 

Although  the concept of a co-OP to some may seem along way off ?

(Including me) thanks for the info@Adam Boot but we don't really need a list of why it won't work.

 

What we need is solid advise on how to make it work, government funding will help maybe ?  

I love my bees,love my job but the dark cloud is getting darker ....

 

 

 

My apologies if that is how you see my comments. It is not supposed to be a list of why it won't work. It is supposed to be a range of questions that require answers for it to work. 

 

Of course Co Op's, in some cases can work. It may well be a good thing to have a Co Op. It doesn't mater what my view is.

 

The point is, it does not matter how much money you get from the government or how much each member puts in. It is still business and if the fundamentals are wrong it will not work. The subsidy will not last forever. 

 

The questions remain un answered. How is the Co Op going to reduce cost, increase efficiency, reduce hive numbers, increase yields. How is it going to get the market to pay more for the product. The global market is not going to change because New Zealand has created a honey Co Op. 

 

If I walked in your shoes I would want to see a formidable business plan (including funding model) and equally solid long term marketing plan before I jumped in? I would want to know who the decision makers were and what there motives and credentials were? I would want to see that boxes were ticked and scenarios though through? This may well be going on? Every beekeeper involved may have been sworn to absolute secrecy? 

 

I can only go from what I here in the industry and what I read in this forum. All I have heard is lots of worm fuzzies about a wonderfull idea. I have not heard or seen anything constructive to this point. 

 

In response to:

packer that you have religiously supported for many years tells you sorry son but we don't want your product today, and probably not tomorrow. 🤢

 

I assume that for many years this relationship has been symbiotic? The packer has also religiously supported your business?  The packer is hurting just as much as you are. 

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I believe @Adam Boot is right .

 

From the emails I receive , the millions getting talked about to establish a Co op are staggering . The government does not just give money out for good ideas .

 

And then the mega millions required by the beekeepers on top of , I just can’t see where that is coming from . Borrowing money to buy shares in a co op is incredibly risky , with the exception being when there is ‘growth’.

 

When grows levels off or becomes negative , it is very very difficult , to impossible to get your investment out of a co op because there is no money to give back . I am going through this exercise at the moment trying to sell LIC shares , but with the state of dairy , the shares are ‘illiquid ‘

 

Eyes wide open people. By all means look at a co op , but be fully informed , plus a bit , before you part with cash you don’t have , that will add to your financial problems .

 

When the market no longer wants a product , it’s best to reduce production or do something else . I know that’s very hard to digest , but that is the fact of economics with nil or negative growth .

 

Hats off to the guys organising the thing because their enthusiasm is fantastic , however , Adam is saying it how it is . 

Edited by M4tt
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On 18/05/2019 at 3:31 PM, Adam Boot said:

Wow, that is a little bit heavy for me and certainly not what I was referring to at all. Geopolitics and tension is not the cause of NZ honey industry issues. Remember we produce 20,000 tonnes in a 2 million tonne market. Negligible. If we can't find a market for such a small quantity of superior quality product it is our problem and no one else. 

The NZ market has enjoyed over inflated prices for non Manuka honey. Previous lack of international export worthy Manuka Honey standards fuelled this. The MPI Manuka Honey Science Definition for Mono Floral has rightly forced a correction. The historical inflated prices made NZ non Manuka unsalable on the global market and longterm partnerships, contracts and markets were lost. 

With price adjustment these markets will become available again over time and will continue to grow. 

The second part of the NZ problem is a legacy of the Manuka boom. Many investors piled into a market that they did not understand and before they understood the effect of the approaching MPI regulation changes. A lack of due diligence has been rife. Companies valued on hive numbers and inflated yields of expected Manuka have created a debt bubble. 

Much of the expected harvests are not at forecast yields and are no longer considered Manuka Honey. Business models were built on false revenue value expectations with debt burdens that are now inappropriate. 

Banks understand the over valuation problem now. They understand the honey markets and values better. 

The fact is that every man and his dog thought that there was quick money to be made. Then they all thought they could make more by putting it in a jar themselves, putting a label on it and believing they had a brand. 

The reality is that very few labels have had tangible market penetration and fewer have become or are brands in the true sense. Consolidation and collapse is happening a rapid rate. What is left will be stronger more efficient and will take the industry to a more sustainable next level. 

Maybe only the big fish will survive through to the end and all the small ones gobbled up. Northland Apiaries has just closed shop and now I'm left with a where will I go now buzz, 

Trying to sell hives at $250 with no takers yet on trade me and I was buying 10 frames of bees for $500 withought gear last season. 

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Unfortunately many NZers (doesn't matter what industry we are talking about) have a boom bust (gold rush) mentality.  Currently beekeepers with good beekeeping practises, lateral thinking and low debt will survive. 

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27 minutes ago, Maru Hoani said:

Maybe only the big fish will survive through to the end and all the small ones gobbled up. Northland Apiaries has just closed shop and now I'm left with a where will I go now buzz, 

Trying to sell hives at $250 with no takers yet on trade me and I was buying 10 frames of bees for $500 withought gear last season. 

We all knew things were unsustainable, and we all knew that the crazy, unregulated, rampant increase in hive numbers was leading  us to disaster, but the speed and severity of the downfall is eye-watering!  Day by day it feels more and more apocalyptic.

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On Sunday 12 May 2019, AsureQuality, Lincoln advised NZ hive numbers are 934,147

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My view is that a Co op should and will rise up from humble beginnings, possibly from the ashes.
It will benefit from past experience and strive to prevent a repeat of prior mistakes.

It will probably have a working relationship with Govt 

 

 

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I certainly hope for the Co-op you are correct.  Though I thought for a nano second I was reading "it will probably have a working relationship with God"

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7 minutes ago, Maggie James said:

 

On Sunday 12 May 2019, AsureQuality, Lincoln advised NZ hive numbers are 934,147

It is a madness- that is almost twice as many colonies as there are in Australia, and  200,000 more colonies then there are in all of Canada!

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8 minutes ago, Maggie James said:

 

I certainly hope for the Co-op you are correct.  Though I thought for a nano second I was reading "it will probably have a working relationship with God"

No, National may be sidelined for a term or two

Edited by Philbee

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It's a worry.  And how do they treat out of control AFB in the States & Canada - WITH ANTIBIOTICS - There goes our export markets, look out honey imports

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1 hour ago, Maggie James said:

 

On Sunday 12 May 2019, AsureQuality, Lincoln advised NZ hive numbers are 934,147

 

Lincoln advised NZ hive numbers are 934,147 registered !  Plus . . ? ?

We must be over a million hives

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18 hours ago, Adam Boot said:

My apologies if that is how you see my comments. It is not supposed to be a list of why it won't work. It is supposed to be a range of questions that require answers for it to work. 

 

Of course Co Op's, in some cases can work. It may well be a good thing to have a Co Op. It doesn't mater what my view is.

 

The point is, it does not matter how much money you get from the government or how much each member puts in. It is still business and if the fundamentals are wrong it will not work. The subsidy will not last forever. 

 

The questions remain un answered. How is the Co Op going to reduce cost, increase efficiency, reduce hive numbers, increase yields. How is it going to get the market to pay more for the product. The global market is not going to change because New Zealand has created a honey Co Op. 

 

If I walked in your shoes I would want to see a formidable business plan (including funding model) and equally solid long term marketing plan before I jumped in? I would want to know who the decision makers were and what there motives and credentials were? I would want to see that boxes were ticked and scenarios though through? This may well be going on? Every beekeeper involved may have been sworn to absolute secrecy? 

 

I can only go from what I here in the industry and what I read in this forum. All I have heard is lots of worm fuzzies about a wonderfull idea. I have not heard or seen anything constructive to this point. 

 

In response to:

packer that you have religiously supported for many years tells you sorry son but we don't want your product today, and probably not tomorrow. 🤢

 

I assume that for many years this relationship has been symbiotic? The packer has also religiously supported your business?  The packer is hurting just as much as you are. 

Thanks @Adam Boot I'm not digging at you either just real tuff times and we need some hope...but as always hope can be dangerous. 

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