Canadian honey producers are in a marketing bind.
Other countries are grabbing a larger share of the U.S. market, and possibly for the first time ever, Canadian honey is selling at a steep discount to U.S. honey, said Guy Chartier, chief executive officer of Bee Maid Honey, a beekeeper-owned co-operative.
“Overall, exports are trending down,” said Chartier, who spoke at the Manitoba Beekeepers’ Association conference, held late last month in Winnipeg.
The American market is critical for Canadian beekeepers because about half of the honey produced in Canada is exported, and 80 to 90 percent of it goes to the U.S.
With sliding exports, and two consecutive years of strong production, many Canadian beekeepers are sitting on stockpiles.
“Honey doesn’t necessarily spoil … but packers want to buy your same year honey,” said Mark Friesen, president of the Manitoba Beekeepers Association.
Friesen said producers are sitting on their stocks waiting for prices to bounce back.
Bulk honey prices in Western Canada were $2.20 per lb. 18 to 20 months ago, and beekeeping was profitable. However, the price dropped off a cliff last year, sinking to $1.20 to $1.30.
A combination of factors pushed global prices lower, including:
- robust production and huge stockpiles of honey
- a shift in the U.S. market, where packers are buying cheaper, dark coloured honey
- exports of fake honey from China, a country that is responsible for 27 percent of global production
“The issue is how much of that is real honey (from China),” Chartier said.
“That probably pushed prices down more than anything else.”
China has a reputation for producing fake honey from corn syrup and poor honey loaded with contaminants. Industry analysts believe China ships its honey through third party countries, such as Ukraine or Thailand, to reach desirable export markets such as the United States and Europe, thus avoiding a “Made in China” label.
“Both Thailand and Ukraine, the number of hives and level of beekeeping activity does not justify the quantity … of honey exported,” Ron Phipps, a global honey expert, said in a market report for the American Honey Producers Association.
Data indicates suspicions around fake honey are likely correct.
Global honey exports have jumped by 61 percent in the last decade while the number of beehives rose by only eight percent.
Fake honey may depress global prices, but decisions in the U.S. market have also affected Canadian beekeepers.
Chartier showed a timeline graph illustrating how Canadian and U.S. honey prices were almost identical for years. However, prices paid to Canadian producers dropped to US$1 per lb. in late 2015 and in 2016 while American-produced honey stayed above $1.60 per lb.
“This is something we’ve never really seen before. Such a big gap.”
Chartier suspects that American honey packers and importers changed their buying practices because bulk honey was trading around $2 per lb. for a couple of years. American retailers were pushing back on the price, so packers had to make a choice.
Retailers would either have to pay more for white honey or accept darker honey.
Many packers and retailers chose the cheaper option.
“If you see the honey on the store shelves (in the U.S.), it’s a lot darker in colour than honey in Canada.”
As a result, lower quality imports from Ukraine, Vietnam and elsewhere have made gains in the U.S., cutting into Canada’s market share.
Making matters worse, Canadian beekeepers produce lighter honey but U.S. buyers treat it the same as darker honey. That means Canadian honey is garnering the same price as darker honey from places such as Vietnam.
Meanwhile, U.S. beekeepers continue to receive a premium price for their white honey.
“Some of the retailers, if they’re going to have lighter colour honey, (they want it) to be U.S. domestic honey,” Chartier said.
“So that has held up (U.S.) prices.”
The U.S. switch to darker product could be permanent, but there is positive news around Chinese honey, Chartier said.
European buyers are turning away from Chinese product and seeking imports.
On the supply side, Chartier said Argentina, one of the world’s largest exporters, had a poor production season this year.
“That’s caused a lot of buying activity in the last little while,” he said.
Friesen has sold honey recently and prices have risen from lows of C$1.20 per lb.