A Beekeeper's Diary

Sent: Monday, July 12, 2004 8:20 AM
Subject: Australian Honey Prices latest

Hi Allen,

I have been waiting for you to come back on line, but we have had a nasty surprise as Capilano have slashed prices paid to the beekeeper by approx 30%. Highest price per Kilogram $3.50 for top grade Yellow Box, Red Gum $3.20 Canola $2.80 and most good flavoured Eucalypt honey $2.90 to $3.15. Honey Quotas will be enforced and tightened and an audit of honey plants to examine those that Qualify to food standards.

Only 3 cents per kilogram presently offered for honey that comes from accredited factories. Other independent packers will not buy as they are scared of being caught with high priced honey on a falling market. So we are presently looking at uncertain times.

What the beekeepers need is a world wide point to compare prices and forecast possible large crops coming on the market. I have looked extensively on the internet and cannot find live figures. I believe the packers are now playing games with the beekeepers, as locally I cannot see a lot of domestic honey and large areas are still in drought. The obvious thing is the public have stopped buying honey due to the imported honey being such low quality and different to the nice thick eucalypt honey customers are accustomed to.  Huge amounts of imported honey has damaged the local market.

I'm assuming these are Australian dollars.  If so, today, $1.00 Australian is $US0.709 or $0.9368 CAD.  In that case, it appears, from the comments above, that the $2.80 canola honey is fetching in Aus translates to $US1.98.  That is per kilogram, not per pound as I had initially assumed. Fortunately, a reader corrected me.  (It just goes to show how easy it is to get the wrong impression). The above numbers reported translate to a maximum of $US1.03 for the special varieties, and 90¢ US per pound for white (I assume Australian canola honey is water white, like ours), and I must say that price is low!

I understand, also, that markets vary country by country, and that the costs of production can vary widely.  I have been led to understand that Australia has, for some time now, had some measures in place which both raise the demand and the price for their product, and the cost of production.  I have no idea how much higher the production costs are there.  I have been pressing for implementation of similar measures in North America to ensure that the current prices do not sink to the lowest common level.  It appears, however that the Australian quality measures are not protecting them as well as they have previously.

I also, somehow, had the impression that Aus and NZ had some rules to exclude foreign honey from their home markets based on their claimed AFB-free status, the thinking being that the imported honey can contain AFB spores that might escape into the environment though bees robbing discarded consumer packs at dumps and from bees robbing empty drums, etc.

This latter scenario is suspected of being the source of the rAFB that showed up at Burnaby Canada (near a packing plant) and a similar outbreak in Florida.  Both outbreaks subsequently spread far an wide, so I consider such fears quite reasonable.  I gather, though, that, even if the home markets are protected, that Australian beekeepers, like Canadians depend on export and that the export market sets the price to producers.  I also seem to recall that Argentine honey was found in the Australian home market, so perhaps my understanding is incorrect.

A glance that the chart from Yahoo! (right) also shows that Australian currency has been strengthening over the last several years -- by 45%, from a low of about about 55¢US to around 80¢US at the the peak -- and that alone will explain considerably reduced returns to Australian producers.  I also seem to recall having read of an American/Australian free trade agreement having been signed recently...

Please tell me more...  By email, or in HoneyBeeWorld Forum, which has been recently showing signs of new life.

Allen,

Great to have you back on line with your diary. We (I am sure I speak about people like myself but do not even know) have missed it but also respect your need for time away.

I just have to point out an observation about your reporter from Australia and the conversion of the price quoted. The conversion of $1.98 to US is per kilogram instead of pound. Dividing by 2.2 would put the price per pound at $.90.

Enjoy the rest of your time away and please continue to be an advocate for our industry.

Goes to show how easy it is to make mistakes.  I was berating the Brazilians for apparently mistaking the US prices per pound for prices per Kilogram and pricing their product accordingly.  Then I made the same sort of error.

Hello All,

I commend Joe Graham (editor ABJ) as I have before for giving all sides of a subject equal time.

The article " Examining the Chinese Chloramphenicol honey Contamination Issue from the Chinese point of View" in the August issue of the American Bee Journal (vol. 144 no. 8) will not be received well by American beekeepers but we are all beekeepers and as such we have got beekeeping in common.

Actually I respect the Apicultural Science Association of China (ASAC) quite a bit for the work they are doing in many areas.

When the average beekeeper reads the article he/she quickly sees the door is about to open and the flood of low priced Chinese is headed for the U.S.. It is also interesting that on page 632 the Chinese say around 20,000 metric tons of ultrafiltered honey have already flowed into the U.S. What happened to the U.F. honey which was ultrafiltered to remove chloramphenicol which entered the U.S.?

(He continues...Read it here)

<snip>

Here's the problem. The planet is one big transparent market for "fungible commodities" like honey. (And if you sell your honey as a "fungible commodity", whose fault is that?)

Buyers and packers of honey are ready, willing, and able to source their honey from anywhere on the planet, so any honey for sale in bulk anywhere tends to impact the price paid for honey everywhere else. The net effect of the Chinese honey being offered for sale anywhere is to tend to depress prices everywhere. The net effect of ANY large supply of honey being offered for sale anywhere is to tend to depress prices everywhere.

<snip>

The problem is that buyers and packers have more information than producers, and many producers don't even try to share information on what offers they have received. Producers and producer co-ops are being fools in thinking that they gain anything by keeping bids secret rather than leveraging the unavoidable transparency of the market to their own advantage.

The net result is that the lowest price that any large producer or co-op will accept suddenly becomes the highest price offered to anyone else. If one thinks about that for longer than a millisecond, it should become blindingly obvious to even the casual observer that it would be in the best interest of producers to not only know what others are being offered for their honey, but also to quickly inform everyone else of what bids they have received.

<snip>

To read the entire article, Click here

My name's Umberto, and I write from Trento (Nord-Italy). I am a retired and in my free time I am a beekeeper. I looking for a farm to visit for about 1 or 2 mounts. I see your web site and I hope you can help me to find it. If is possible can you write me some address where I can telephone or write my reference? I am available to work in this farm, so I can improve my English, how you will just understand, is no very good.
Tanks for your attentions.

Ciao

Was informed today that the double murder/suicide in St Paul, was in fact (a well-known commercial beekeeper), who reportedly killed his wife and youngest daughter (first year university) and then himself.....

<snip>

Only other info I heard, was (he) was put on medicine January and again in May, am speculating it was likely for depression, but don't know.

I sold several items to the beekeeper in question last fall and this spring.  At one point he had asked me to sell 1,000 of his hives for him anonymously, and I mentioned them here, but he changed his mind several days later.  I found him to be an earnest, straightforward person, and am sorry to hear this news. 

The story is true, and here is a link to an article with details.  It is indeed tragic.

We still have 83 juice drums here that you were going to pick up last year.  Are you still interested in them?  If so please advise if you want us to ship them to you COLLECT or arrange pick up by the end of this month.  After that they will be forfeited and we will dispose as we see fit.

Thank you

Gerald

Who owns the co-op anyhow?

The reasons why the drums were not picked up are the subject of another article when I have time, but basically come down to being due to the fact that I had planned to pick them up when delivering honey, but my delivery was refused because I was a few days late.  That was due to the unusually cold weather in January which prevented me from getting it out of the extracting warehouse.  I couldn't convince the owners to start up their machines and work in the cold.

Have I written about this before?  Not sure, but this latest email from AHPC seems to be just more of the arbitrary actions I have seen from the co-op lately.  They have $30,000 of my money, allow me no vote, and have confiscated funds from my account held in trust by them against my express objections.  Moreover, they have never accounted for another 100+ wax drums they got from me years ago, in spite of repeated promised to do so. In spite of their own shortcomings in regard to drums, they are grinding me over a small shortage in my inventory.  As for the drums I have at AHPC, I could see their asking me to please hurry up, or advising me that they will have to charge me storage in the future, but the approach they have taken is nothing short of abusive in my view, particularly in light of the fact that they have also confiscated my money.  I've told them, "Let's just settle up all around and let's be quits", and get an arbitrator if necessary, but they are not interested in such a simple solution.

The co-ops have also, recently, failed to deliver on their promises of price to members who delivered honey on trust, then counted on them to keep their word.  I guess somebody really should sue the co-op and the directors, but, so far, nobody has the stomach for such nastiness.  I, personally, hate having to resort to such measures, but maybe they will push someone too far.  So far, members have confined their protests to simply shipping their crop elsewhere.  Although some (many) have exclusive contracts that require that 100% of the crop goes to the co-op, I, and some others do not, because we have never renounced the old Quota 88 agreement -- in spite of attempts by various boards to get us to sign agreements to do so -- and are therefore free to ship whereever we please.  The only penalty to us is loss of quota, and quota is now worth nothing anyhow.

Nonetheless, in spite of contracting 100% of crop, many co-op members held out this year and sold into the open market in protest against the price cutting that Beemaid had been undertaking to attempt to gain market share.  This price cutting was obviously going to affect the return, and anyone with eyes could see that Beemaid would fail to meet its promises sooner or later.  I suppose the reasoning is that if Beemaid can break promises to members, then members can break promises to Beemaid.  All in all, it is not a nice situation, and IMO will only get worse.  I've suggested solutions, but they have been rejected out of hand.  I'd like to get my money out of there and forget they exist.  Within a decade, my guess is that they won't.

Should AHPC be called a co-op, or an unco-op?   What do you think?

Allen's Links of the Day:

• Beeswax & Honey Product Recipes

• Virus Tutorial

Hi Allen,

Glad to hear you've been enjoying summer, yes it did arrive finally. Good to have you back too.

I was wondering how your cattle were doing, -- or perhaps as you mentioned -- your balance sheet. I'm sorry to hear that is was a losing venture apart from the tax savings.

I respect faith, but doubt is what gets you an education. -- Wilson Mizner

I was raised on a mixed cattle and grain farm which my brother has taken over responsibility and is now mostly focused on cattle. This entire region is focused heavily on cattle production and which has granted my home town the distinction of being the cattle capital of Manitoba.  I share your sentiments about who loses and who prospers during such cataclysmic events. Today's news announced Lakeside Packers will expand to kill an extra 1000 animals per day, makes good sense when they'll be able to buy, ahem steal, all the fat cattle they can process for rock bottom prices, and sell the prime cuts to the US for sky high prices. My understanding (somewhat cynical) of the open border to boneless cuts of beef under 30 months of age is a way for these American packers (IBP and Cargill) to profit and to provide the affluent beef consumers in the US with a larger supply of prime cuts such as tenderloin and rib eye steak which are always in short supply.

I would like to know what is really crossing the border. Last week's Western Producer has an article regarding R-CALF supporters who own fat cattle in Canadian feedlots and which are being given precious slaughter priority over Canadian-owned fat cattle at Cargill near Nanton, AB.

We haven't seen the financial impact just yet. Farmers have a way of hanging on by their finger nails. However, if feeders fetch 30 cents a pound this fall, how is anyone going to get by? Lets do the math, 175 calves at 600 lbs average times 30 cents equals $31,500 Canadian or approximately $23 650 US. Its a very scary thought! I hate being a pessimist but you only have to look at what prices Argentine beekeepers are being paid for their honey right now for an example.

I do find it interesting that since the war in Iraq and Canada's refusal to take part directly (We sent extra troops to Afghanistan to relieve US troops which went to Iraq) in that quagmire, we have encountered SARS, but none in the US, we had BSE with one in the US, originating from Canada, the bird flu and none recently in the US. How is it that a country with greater population density and 10 times the population not to mention many more and larger corporate owned factory farms with almost grotesque animal population densities has escaped all these disease outbreaks? We know that bee diseases have long been a greater issue in the US than in Canada; how is it that other livestock diseases haven't correlated? Hhmm... is the US public being duped to protect the interests of a few very large and powerful corporate owned agricultural industries which have widespread control over most of the food we eat.

I just got off the phone with AFSC.  Apparently there is a new equity loss program, with forms available on the AFSC site.  Haven't looked yet.  Only for Alberta? 

(Later) Having looked, I cannot find it.