Downunder Honey owner Jason Prior, of Cheltenham, said honey producers face the prospect of being paid 20-25% less than 2017 by processors as the market reshapes after a shakedown in numbers over the past two years.
“The smaller, second-tier honey buyers have disappeared and then the next tier down, the fly-by-night operators, have gone too. Between these guys they would account for 30% of the market. They were often small individually but combined were quite a portion of that buying market.”
Some sources claim operators have tonnes of honey stored from last season, with one central North Island operator holding 200t of honey in drums.
“We have seen a slide in all honey types’ prices while those that are processing it are also reduced in numbers, down to about three major processors including Comvita now.”
The new manuka honey standards had some effect on what some producers can expect to be paid because lower-grade, blended manuka honey does not always meet the Primary Industries Ministry standard, making that grade worth less.
Typical prices are now were $16 a kilo for UMF5 manuka, down from $27/kg and UMF7 at $22/kg, down from $30/kg.
“And for a UMF10 we would have been offered $37/kg in March. We were recently offered $27,” Prior said.
“These prices are lower than they were two years ago when the product was on the shelf at $200/kg.”
Prior estimates beekeepers need about $7/kg to break even on honey.
Waikato beekeeper Chris Patterson said he had heard of some beekeepers being offered prices as low as $3/kg for multi-floral bush honey. He is concerned the MPI standards are adding significant compliance costs to smaller operators, making them even more marginal.
But despite the slide in prices, indications are the honey continues to sell well in overseas markets.
UMF Honey Association spokesman John Rawcliffe was in China and from there said there is no indication the product is falling out of favour.
“There is no softening of demand for manuka but we have seen it for other types.”
He suspects that might in part be because of the MPI standards struggling to define multi-floral manuka, but is also attributable to greater competition from the rest of the world to NZ honey types.
Australian honey producers, in particular, are avidly pursuing manuka branding despite British authorities ruling it is a Maori word specific to NZ. That also plays out through other honey types specific to NZ and it is a key industry focus to try to protect all varieties through more robust regulations.
“This is something you cannot just market yourself out of,” Rawcliffe said.
Clover prices are also down to about $7/kg, from $12 earlier this year, Prior said.
More processors are holding minimal stock inventories, instead dipping into beekeepers’ stocks as required.
Prior challenged the MPI standards, which have proved controversial.
“There is nothing to stop honey importers buying in bulk NZ manuka and blending it down with other types once they have it and selling it as NZ manuka.”
Apiculture NZ chief executive Karin Kos said such activity requires government-to-government action to stop.
“People do talk about how NZ manuka can be adulterated but 80% of it is being exported as retail packed.”
She acknowledges the concerns about MPI standards but said the industry needs more time and data to better understand any shortcomings in the standards.
“We have not even been going for a year. We need a good database of samples so we can better understand regionality and seasonality of the product’s standards and have an industry science group working on it.”
