Tuesday, March 19, 2024

Sticky wicket for honey producers

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Honey producers face a season of lean returns as prices plunge to well below break-even, leaving some having to decide if this year’s crop is even worth harvesting.
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Beekeeping Incorporated president Jane Lorimer said prices for bulk honey have dropped to $3.50 to $4 a kilo, well down on the $6-$7 a kilo needed to break even on production costs.

Lorimer, a Waikato producer, said she has been lucky also having income generated through kiwifruit pollination, which will be a valuable side income this season to bolster fading honey earnings.

“It is not good and a lot of new beekeepers with big mortgages are having the banks putting pressure on them.

“There will be fallout from these prices this season.”

Large volumes of Chinese honey hitting global markets has been blamed for the decline and New Zealand producers simply cannot remain profitable at the lower values the Chinese product has created.

Arataki Honey director Russell Berry, of Rotorua, who supplies 32% of the honey sold in NZ supermarkets, said a lot of the Chinese honey is understood to be adulterated. His operation is one of the largest in the southern hemisphere with 20,000 hives.

NZ producers also have a problem with cheaper imported propolis, a resinous product produced by bees and often used in cosmetic creams.

They also have too many hives, at almost one million, well up on the 270,000 hives only 10 years ago.

Berry said the hive numbers mean the country is effectively overstocked and a cut of 25% of hives would probably result in greater productivity.

Lorimer said a hike in compliance costs has also hit the sector hard with risk management plans that used to be annual affairs now required twice a year.

“This has not quite doubled the cost but is getting close to it.” 

She expects the slide in prices is going to hit the sector hard for the next three seasons as heavily indebted new entrants get shaken out.

“That is unless something can be done to increase the export value of honey. 

“Some beekeepers may choose not to harvest honey from their hives this year and it comes in a year that has had quite good honey flow where there will be a reasonable crop of pasture honey.”

 But she said the lower prices are also due, in part, to manuka honey that is not meeting the new standards and is being put into the standard honey market.

The promise of continuing high manuka returns not being fulfilled has also darkened the season’s prospects. 

Berry said several processors have committed to very high-value, long-term manuka contracts only to find those prices are also being undermined and well off the top values anticipated three years ago.

Last year manuka prices slid by as much as 50% compared to the year before and some processors have major stockpiles of the higher value honey in bulk storage.

Apiculture NZ chief executive Karin Kos said the need now is greater than ever to focus on NZ’s unique floral honey types and building their reputation among consumers.

Manuka Honey Appellation Society spokesman John Rawcliffe said the poor prices highlight NZ’s inability to compete in the global bulk honey market. 

He agrees the need to continue focusing on higher-value, mono-floral honeys is now greater than ever before.

“China is the major source of that bulk honey but other countries including Argentina are there too and their impact, making prices $3.50/kg-$4/kg, is non-survivable for NZ.”

NZ is fortunate to have a range of mono-floral honeys that can command a premium over global bulk honey.

In September last year the manuka honey industry received an injection of almost $6 million from the Provincial Growth Fund to help the product protect its provenance claims.

The society has successfully protected the manuka brand in Britain and has applied to Chinese authorities to do the same there.

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