Financial Factors
Revenue
New Zealand produces an average annual honey crop of around 8,800 tonnes and consumes about 5,000 tonnes. This leaves 3,000-3,500 t/year that must be exported or carried over to maintain market stability. Despite the record crop, prices continued to firm and are currently at an all time high.
Domestic prices are usually determined by export market prices and these are currently very strong despite an increase in the value of the New Zealand dollar. The increase in honey prices is due to the withdrawal of Chinese honey from the world market after residue problems, a reduction in exports of Argentinean honey to the United States as a result of anti-dumping legislation, and a shortage of honey in Europe and Australia.
Other bee products, such as pollen and propolis, also firmed in price as demand increased. Propolis in particular received a huge boost after experts in Taiwan recommended it to counteract SARS.
Local packers continued to compete strongly amongst themselves for retail market share. Supermarkets are also keeping wholesale prices under tight control although prices continue to rise following increases in bulk prices. Some varietal types of honey, such as rewarewa, are in short supply, and one packer offered up to $5/kg for stock. Some packers paid $4.00-$4.20/kg bulk for any honey, while best grade clover honey averaged $4.50/kg with a range of $4.20-$4.80/kg and a spot price of $5.00/kg.
The bulk price for manuka honey held at last year's price of $10.00/kg for early sales, but dropped back to $9.00/kg after the big crop came onto the market. Manuka is in good supply, but large exports to Europe, and especially Australia, could see the crop sold down quite quickly. Manuka is being used more and more for medicinal purposes, such as wound dressings and cough syrups. These markets can withstand higher prices. A recent trend is to pay $1.00 per point of antibacterial activity as determined by an accredited laboratory. This is down from a high of $1.25/kg last season. On this basis some beekeepers achieved $18/kg with reports from last year of up to $27/kg for manuka honey. Antibacterial levels can increase with time so beekeepers are trying to hold stocks for a year to increase the antibacterial levels and hence the price.
Nucleus Hives
Nucleus hives (consisting of four frames with bees, a queen bee, brood and honey) sold for $35-$50 (FOB). Some North Island beekeepers are looking at the feasibility of buying varroa-free nucleus hives from the South Island to replace winter losses as a cheaper alternative to buying full production hives from the South Island, a trend that began this reporting period.
Queen Bees
Queen bees sold for $16-$22 each on the local market, and $18-$30 each on the export market. These prices were similar to last year. Queen cells realised $2.50-$5.00 each. Queen cells are immature queen bees that are placed in queenless hives to emerge as virgin queens after 1-2 days and then fly and mate.
Bulk Bees
Between 1 and 2 kg of bees are shaken from normal hives after the honey crop is harvested. They are sold to an exporter for $18-$20/kg delivered ($12-$14/kg last season). The exporter repacks the bees in 1.0-1.5 kg or 1.8 kg packages with a queen bee and a food supply. These are exported to Canada, Japan and Germany.
Propolis
Propolis is a gum or resin that is exuded by trees and shrubs and collected by bees. It is antibiotic and is made into many therapeutic products after extraction and refining. The price fell back to $160/kg for pure propolis after reaching highs of up to $200/kg. This translates to around $80-$100/kg of raw product as collected from the hives or scraped off bee frames and boxes.
Following the introduction of varroa and the poor crops of the past two years, beekeepers needed to maximise revenue, so produced and harvested propolis. This increase in production resulted in a drop in price. However, an increase in world demand for propolis products has meant there is still a shortage of propolis in New Zealand and beekeepers are able to sell all they can gather. The increased sales as a result of Taiwanese experts recommending propolis for SARS may see bulk prices go up again.
Table 2: Returns for Apiculture Products
Product |
2001/02 |
2002/03 |
Bulk honey - colour grade ($/kg FOB)*: |
||
Light (clover type) |
4.00-4.30 |
4.20-4.80 |
Light amber |
3.25-3.50 |
4.20-4.50 |
Dark |
3.00-3.50 |
4.00-5.00 |
Manuka |
7.50-27.00 |
9.00-19.00 |
Beeswax ($/kg FOB): |
||
Light |
6.50 |
6.50 |
Dark |
5.50 |
5.50 |
Pollen ($/kg FOB): |
||
Not dried or cleaned |
10.00 |
10.00 |
Cleaned and dried |
17.00-22.00 |
17.00-30.00 |
Pollination ($/hive): |
||
Pipfruit, stonefruit and berryfruit |
48.00-55.00 |
50.00-55.00 |
Kiwifruit: |
75.00-90.00 |
80.00-100.00 |
Taranaki |
65.00-75.00 |
70.00-80.00 |
Auckland |
70.00-100.00 |
80.00-115.00 |
Bay of Plenty |
86.00-130.00 |
95.00-138.00 |
* Beekeepers supply drums or containers. Source: AgriQuality New Zealand
Other Bee Products
Other products produced from beehives include royal jelly and bee venom. Royal jelly is in short supply following the ban on imports of royal jelly from China after an exotic bee disease was found in imported product. New Zealand customers are showing resistance to paying the asking price for New Zealand produced royal jelly of around $4,000/kg, when they were previously able to land Chinese royal jelly for $400-$600/kg. Royal jelly powder in capsules could be imported legally and one enterprising New Zealand company used modified machinery to extract the royal jelly from the capsules for sale to honey packers. This practice was stopped once MAF became aware of it because of the risk of spreading exotic bee diseases.
Expenditure
Two poor consecutive honey seasons in parts of the North Island, plus the costs of monitoring and treating the varroa mite, placed a severe financial strain on many operations. Added to this was a very difficult spring with record amounts of sugar being fed and a need to buy-in queen bees and hives to make up losses or meet pollination demand. Many businesses were stretched to the limit financially. It was very fortunate that the kiwifruit pollination season was late which allowed hives to recover in time, and beekeepers then experienced a record honey crop with significant quantities of manuka. To aid their recovery, honey prices continued to firm and markets are strong. The price paid for bulk bees for packages also increased to $14-$20/kg delivered to the North Island exporters.
Increases in the price of diesel and petrol continued to add to the annual costs of beekeeping, as operating trucks is one of the largest costs faced by beekeepers.
The NBA has not succeeded so far in getting a hive or apiary compulsory levy to fund its Pest Management Strategy (PMS) under the Biosecurity Act 1993. Previously they levied beekeepers under the Commodity Levies Act 1990. This has saved some producers many thousands of dollars in fees, but it also means the PMS is not being funded and a serious endemic bee disease, American foulbrood, is not being controlled to the desired level. A levy to fund the PMS is expected to be approved by late 2003.
Sugar is a major cost in all beekeeping operations and increased amounts were fed this year to hives after a short honey crop in 2002 left many hives short of winter supplies, coupled with a long and difficult spring. Some major beekeepers reported feeding double the quantity of sugar they would normally feed.
Net Result
It is difficult to get financial data on beekeeping operations, as there is no surveying or modelling being carried out. The NBA began a process of developing models for beekeeping operations and plans to survey producers in 2003/04. Beekeeping businesses vary greatly in their revenue generating activities, so finding a typical enterprise is not easy, especially in the North Island. Beekeepers may generate revenue from any combination of honey (bulk, comb honey or retail), pollination, bulk bees for export, propolis and pollen production, or high value honey crops like manuka.
The gross margins presented (Table 3) are sourced from the industry's application for a Pest Management Strategy document (1997). They are adjusted for inflation at the rate of 1.5% pa plus an allowance for varroa treatment costs, increases in diesel and sugar costs, and increased revenue from honey and pollination fees for kiwifruit.
Table 3: Gross Margins ($/hive)
Pollination |
Non-pollination | |
Gross revenue |
202 |
168 |
Production costs |
114 |
99 |
Net revenue |
88 |
69 |
Source: AgriQuality New Zealand
Contact for Enquiries
Farm Monitoring Programme Manager
Monitoring and Evaluation
MAF Policy
PO Box 2526
Wellington
NEW ZEALAND
Phone: +64 4 894 0623
Fax: +64 4 894 0741
Contact this person
