Financial Factors
Revenue
New Zealand produces an average honey crop of 8,700 tonnes and consumes about 5,000 tonnes. This leaves 3,000-3,500 tonnes/year that need to be exported or carried over to maintain market stability. Honey exporters are trying to add value to New Zealand products as it is not profitable to compete on the commodity market for bulk honey with countries such as Australia, Argentina, Mexico, Canada and China. As New Zealand produces more honey than is consumed locally, world market prices have a direct influence on local market prices.
Local packers are competing strongly amongst themselves for retail market share, and supermarkets are also keeping wholesale prices under tight control. Honey is used as a loss leader by supermarkets and more and more honey is being sold as house or generic brands. The ever-increasing costs of packaging, labelling, advertising, food safety costs, and regulatory compliance (e.g., Health Department registration and the Animal Products Act 1999), are all affecting profit margins of honey packers.
Table 2 shows the bulk prices for honey where beekeepers supply the drums or containers.
The price for kiwifruit pollination varies from district to district and is higher in the Bay of Plenty (BOP). This reflects a greater demand for hives in the BOP as well as membership by many beekeepers of the Kiwifruit Pollination Association (KPA). The KPA operates a hive and business practice quality assurance system. Many KPA members feed sugar syrup at programmed intervals to the hives to stimulate pollen collection and the cost of the sugar is often included in the pollination fee. The highest fees are from beekeepers who place hives in the orchards, and feed or supply sugar syrup themselves. Beekeepers who supply hives to a broker, simply deliver their hives to the depot site and collect them from the same site after pollination. The broker organises orchard placements and sugar feeding. Average price to the beekeeper through a broker is around $65/hive.
Source: AgriQuality New Zealand Ltd
*Beekeepers supply drums or containers
Live Bees
Nucleus hives (consisting of four frames with bees, a queen bee, brood and honey) sell for between $35 and $50 each. Queen bees are currently selling for between $12 and $18 each on the local market, between $16 and $30 each on the export market, and queen cells for between $2.50 and $4 each. (Queen cells are immature queen bees that are placed in queenless hives to emerge as virgin queens after 1-2 days, then they fly and mate.)
Bulk Bees
Between 1 and 2ÿkg of bees can be taken from each honey-producing hive and delivered to an exporter who repacks the bees in 1-1.5ÿkg packages with a queen bee and a food supply. These are selling for between $11 and $14/kg. Export markets are Canada, Korea, Japan, the United Kingdom, and Germany.
Propolis
Propolis is a gum or resin that is exuded by trees and shrubs, and collected by bees. It is an antibiotic and is made into many therapeutic products after extraction and refining. Beekeepers receive $120-$140/kg of pure propolis after extraction which translates to $50-$75/kg raw product as collected from the hives or scraped off bee frames and boxes.
Other products produced from beehives include royal jelly and bee venom.
Expenditure
Beekeepers have made the most of reduced prices for second-hand imported trucks and four-wheel-drive vehicles to upgrade their vehicle fleets.
The increase in fuel price has added to the annual expenses of beekeepers as truck operating expenses are one of the largest costs faced by beekeepers.
Sugar is a major cost in all beekeeping operations, and any movement in world prices or currency exchange rates affects net profits.
Timber prices have risen significantly recently, and will increase operating costs for beekeepers this winter as they purchase material to make replacement boxes and other hive parts. A bee box lasts about 10-15 years on average before needing repairs and maintenance or replacement.
Exporters in particular are facing extra compliance costs for certificate fees, honey residue testing (which allows exports to the EU), Animal Products Act 1999 and MAF fees. All beekeepers, whether exporting themselves or supplying food products to exporters, will need to have documented quality control systems in place based on Hazard Analysis Critical Control Point (HACCP).
Net Result
The gross margins in Table 3 are sourced from the industry's application for a Pest Management Strategy document (1997), and adjusted for inflation at the rate of 1.5% pa, i.e., 4.5%.
Table 3: Gross Margins ($/hive) |
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| Pollination Hives | Non-Pollination Hives | Weighted Average* | |
| Gross Revenue | 138.88 | 108.56 | 119.93 |
| Production Costs | 86.06 | 66.10 | 73.58 |
| Net Revenue | 52.82 | 42.46 | 46.35 |
* Pollination and non-pollination - weighted by total number of each type of hive in New Zealand - 37% of pollination and 63% non-pollination
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Farm Monitoring Programme Manager
Monitoring and Evaluation
MAF Policy
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NEW ZEALAND
Phone: +64 4 894 0623
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