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I've worked out the amount that I can pay the landowners and still make good money, and I'm ok with the system now. I still have a mix of free access and royalty based access. Take this example thoug

What area on E.cape are you? I could recommend a good trustworthy beekeeper if you want to pm me. :) lol

 

Oh for gods sake.... I really hate this type of behaviour.

 

For all you know The beekeeper on this persons property could be a good local beekeeper with a family to feed and here you are trying to get in on an area for you or your mates.

 

Putting a Lol at the end dosn't make it Ok its just disgusting

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Sorry if my comments offended you. Maybe it came across wrong. I thought my advice was sound. I was trying to be helpful and add a bit of my humour. Btw I don't think he has a beekeeper.

 

He has a local beekeeper interested which is why he came here to ask the question about contracts.

 

I think all the advice you gave was good ,I just dont like the last sentence with the plug at getting yourself or your mates in there over top of a local who has already approached the landowner.

 

I know what Im saying is very unfriendly towards you considering you have only recently started posting and I apologise for my tone and would hope that it doesn't put you off posting more stuff.

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Hi All.

 

I have searched the forum but could not find an answer to my question. Apologies if I am doubling up on a subject already covered elsewhere though.

 

I have land which I have recently purchased on East Cape and have a fair covering of manuka on part of it. I have been approached by a beekeeper from the area who wants to place hives on the land and has offered a fixed price per hive plus a percentage royalty. I'm happy with what is being offered but the research I've done (by which I mean google searches...) tells me that a contract would be a good idea if this is an income stream that I would like to be able to rely on - as far as anything in agriculture can be relied on, that is.

 

So my question is - Does anyone have suggestions for either where I can source a sample access/royalty agreement that I could use as a base for an agreement on my place or do you have any advice in terms of what I should be requiring from the beekeeper?

 

I have found loads of pollination agreements online but none that could be used for what I am after.

 

Thanks in advance for any help and feel free to tell me to ###### off if I am barking up the wrong tree.

In the resources section, I've posted a basic contract.

In the contract I've put 3 categories of honey- basically 10+, 5+ and less than 5.

I know it varies from area to area, (and I don't want to upset anyone here) but royalties of roughly 20%, 10% and 5% for those three categories are fairly normal. With those percentages, everybody should be doing pretty well and be keen to continue in future seasons.

People get all up tight about the percentages but really, a good beekeeper paying ten percent will write a bigger check than a muppet who's promised 30% to get a foot in the door but doesn't really know the area or have strong enough hives.

My advice for land owners is ask around, get references from any beekeepers proposing a deal, and don't sign up long term until you've had the beekeeper there for a year or 2 and you trust them.

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Normally it's a flat percentage of the gross, before costs. I've had beekeepers tell me that 30% of the gross = 50% of the profit.

I don't pay a 'gate fee' per hive but a lot of guys do, + a percentage. One of my friends just pays $20k per year for the whole property and can put as many hives on as he likes.

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I've had beekeepers tell me that 30% of the gross = 50% of the profit.
It's easy to work out, and for many beekeepers it would be worse than that. But it would vary a lot depending what value crop someone is getting.

 

Look at the gross income your business gets, and then look what you put in your pocket. Is it half the gross? For some it would be more, but for some it would not even be that.

 

As a hypothetical example let's say a beekeeper grosses $200k. His expenses are $100k. That would mean that only 25% of gross would be 1/2 his profit going to someone else.

 

IE, 25% of $200k = $50k, or half his $100k profit.

 

So, one guy owns the land, an appreciating asset. The other guy owns the hives, a depreciating asset. One guy does all the work, the other guy gets 1/2 the money. When it gets to this point it means that beekeepers are cutting each others throats. The only reason anyone pays anything, is because if they don't, some other beekeeper will. Before the Manuka boom when most beekeepers would not be able to afford rent, farmers were happy to have the bees on their property for nothing. But if guys are falling over each other offering land owners money, well of course they are going to take it.

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most / many business work on hoping for a NET profit of 10 - 15 % on turnover or gross sales / income

although this net figure should be allied to the value of tangible assets

then I suppose you could divide worked hours into NET income to get an hourly rate for your effort

 

actually, be interesting to see what YOUR hourly rate is !

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It's easy to work out, and for many beekeepers it would be worse than that. But it would vary a lot depending what value crop someone is getting.

 

Look at the gross income your business gets, and then look what you put in your pocket. Is it half the gross? For some it would be more, but for some it would not even be that.

 

As a hypothetical example let's say a beekeeper grosses $200k. His expenses are $100k. That would mean that only 25% of gross would be 1/2 his profit going to someone else.

 

IE, 25% of $200k = $50k, or half his $100k profit.

 

So, one guy owns the land, an appreciating asset. The other guy owns the hives, a depreciating asset. One guy does all the work, the other guy gets 1/2 the money. When it gets to this point it means that beekeepers are cutting each others throats. The only reason anyone pays anything, is because if they don't, some other beekeeper will. Before the Manuka boom when most beekeepers would not be able to afford rent, farmers were happy to have the bees on their property for nothing. But if guys are falling over each other offering land owners money, well of course they are going to take it.

I've worked out the amount that I can pay the landowners and still make good money, and I'm ok with the system now. I still have a mix of free access and royalty based access.

Take this example though, I had this one beautiful farm, heaps of scrub, that I had free access to for a few jars of honey. I could see that the place could support more hives but had just one suitable site. A couple of years ago (at my suggestion) I started paying a royalty. As I drove away from that meeting I remember thinking I might be an idiot for going from free access to paid access voluntarily.

Cut to now, I've got 4 sites on the farm, with maybe more on the way, all producing good active honey, good access, secure tenure and a very happy farmer. We might fly some hives in this year, and the farmer and I are looking at sharing costs for that. Its a good consistent producer, not too remote, and has some good hunting and diving too. It's a good situation for me.

I've also had other landowners who just want to play beekeepers off against each other, offer nothing in return, and then complain about low payments in bad seasons. So royalties/payments isn't all lollies and rainbows but if done well, it can work to your advantage.

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Merk, I congratulate you for being honest and up front with your landowners and paying fair royalties. Keep up the good work but never take for granted that your landowners are happy. Whats happening in my neck of the woods is everyone seems to be trying to out do each other. Even though you are paying a good honest fair return someone will be knocking on landowner doors putting doubt in their minds and offering a little bit more of a carrot. Land owners and beekeepers with the same morals as you are few and far between these days.

Your % rates sound fair but I have heard as much as 25-35% being offered. I also believe as you do that these "dealers" are much more likely to falter in a poor season.

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Just wondering about beekeepers who package and manage the sale of their honey, such as Comvita. These guys can get $125 for a 250 g jar, or in other words $500 a kilo. Which means they can pay far more to a landowner, than a beekeeper who sells his honey wholesale.

 

So as these types of business get an ever growing number of hives, which they are, will they simply outbid the smaller beekeepers and drive them to the wall? I'm wondering if they are already driving prices, outbidding and taking sites wherever they please?

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Just wondering about beekeepers who package and manage the sale of their honey, such as Comvita. These guys can get $125 for a 250 g jar, or in other words $500 a kilo. Which means they can pay far more to a landowner, than a beekeeper who sells his honey wholesale.

 

So as these types of business get an ever growing number of hives, which they are, will they simply outbid the smaller beekeepers and drive them to the wall? I'm wondering if they are already driving prices, outbidding and taking sites wherever they please?

That is mostly what is going on and as the smaller guys are being squeezed out. All this is causing some to lose their morals and do what it takes to survive. It is all turning ugly fast. What ever happened to etiquette?? I even have trouble spelling it now.

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Hi Jason.

I think a saw one place that you guys have had for a while go to Steen this year- I remember thinking that there's just no pleasing some people. I'm pretty sure that they will be worse off with them.

Our big advantage as small guys is that our hives should be better and we work harder.

I know for a fact that my 20% this year was a lot bigger than someone else's 30%, so it's not so much the percentage on the contract as much as the $$ on the check that matters.

 

Still, I get sick of having to explain that to people.

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Just wondering about beekeepers who package and manage the sale of their honey, such as Comvita. These guys can get $125 for a 250 g jar, or in other words $500 a kilo. Which means they can pay far more to a landowner, than a beekeeper who sells his honey wholesale.

 

So as these types of business get an ever growing number of hives, which they are, will they simply outbid the smaller beekeepers and drive them to the wall? I'm wondering if they are already driving prices, outbidding and taking sites wherever they please?

It is great that some large landowners are keeping the big boys,out and giving the small guy a go.

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Just wondering about beekeepers who package and manage the sale of their honey, such as Comvita. These guys can get $125 for a 250 g jar, or in other words $500 a kilo. Which means they can pay far more to a landowner, than a beekeeper who sells his honey wholesale.

 

So as these types of business get an ever growing number of hives, which they are, will they simply outbid the smaller beekeepers and drive them to the wall? I'm wondering if they are already driving prices, outbidding and taking sites wherever they please?

I read through a Comvita joint venture proposal the other day, and what struck me was the running costs for their beekeeping operations. The amount that they have to spend to get a Kg of honey is huge. They could just about buy it off me for cheaper, without the risk.

I also noticed that they want to have 6000 hives on the east coast, up from 2000 this year, which was a bit scary.

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Merc have you allowed for a bad season or do you pay 20% no matter the crop?

 

Also wondering if you pay only for active sites and not bush or non active sites?

 

One of our landowners mentioned the other day that her son who lives in the North Island thinks we should be paying for putting our hives on her farm.

 

I dont know if he realises they are queen raising nucs and with no manuka is sight They certainly arent doing any honey.

 

His comment was that beekeepers are creaming it right now and should be paying.

 

Obviously theres alot of hype over active honey in the north island but its a worry when people think its country wide.

 

Luckily our landowner wants the bees for pollinating the clover shes a farmer who understands the value of both bees and clover rather than one who runsaround throwing fertili over the place

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Still, I get sick of having to explain that to people.

can understand that. same here.

i ended up paying one of my landowners this year 70$ per hive for blendy manuka, 100 mgo, and he thought i'm too tight. i don't think it's greed. mainly people are very misinformed about our profit.

 

i only pay 2 landowners jet, but i think it will become the norm because of all the bee boom.

it's a shame that this new typ of beekeeper that's so good at waving the checkbook is so successful.

you would think they would be better of selling insurances or else. it also doesn't seem to help if they go under or they don't find what they are looking for. for everyone that packs up there is five new ones that "want to give it a go"

would be nice to have some sort of independent web page or paper one could refer landowners to inform themselves.

i'm sure this subject must be discusses in farming magazines?

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I just pay for manuka. I pay what I say I'm going to pay regardless off the size of the harvest, so yes, even in a bad year. It hurts to pay in a bad year but 20% of not much is...... not much, so it's no big problem.

Bad years are scarier if you're on a fixed price per hive.

For clover, winter/spring sites, bush and anything not Manuka I just give them a few jars of honey and it's all done on a handshake like it should be.

All the new beekeepers waving cheque books better be careful. Live by the cheque book, die by the cheque book.

Getting a good harvest of good quality Manuka is harder than most people think.

 

 

 

Merc have you allowed for a bad season or do you pay 20% no matter the crop?

 

Also wondering if you pay only for active sites and not bush or non active sites?

 

One of our landowners mentioned the other day that her son who lives in the North Island thinks we should be paying for putting our hives on her farm.

 

I dont know if he realises they are queen raising nucs and with no manuka is sight They certainly arent doing any honey.

 

His comment was that beekeepers are creaming it right now and should be paying.

 

Obviously theres alot of hype over active honey in the north island but its a worry when people think its country wide.

 

Luckily our landowner wants the bees for pollinating the clover shes a farmer who understands the value of both bees and clover rather than one who runsaround throwing fertili over the place

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