The honey market continues to break a basic rule of economics.
Normally, if two companies are selling a similar product the price should be similar.
So, if company X sells apple juice for $2 per litre and company Y sells a similar quality apple juice for $1.40 per litre, company X will lower its price to compete.
That’s not happening in the honey market.
For the last 30 months American honey producers have received US$2 per pound or more for their honey.
Meanwhile, Canadian beekeepers, who produce honey of equivalent quality, have received $1 to $1.35 per lb., which is $1.25 to $1.70 per lb. in Canadian currency.
The price gap doesn’t just apply to Canada. There is now a two-tiered pricing system for honey — one price for U.S. producers and another for honey imported into the U.S.
“The domestic beekeepers are receiving prices that are two to 2 1/2 times greater than the prices received for equivalent honey from mature producing countries like Argentina and Canada,” Ron Phipps wrote in the International Honey Market Report, published earlier this year in the American Bee Journal.
In late March the price of honey in North Dakota was US$2.10 per lb. while western Canadian honey was selling for $1.30 to $1.40 per lb.
The price that U.S. buyers pay dictates the price of honey in Canada because America is the largest importer of honey in the world.
Rod Scarlett, Canadian Honey Council executive director, said American honey packers imposed the two-tier price system two and a half years ago.
“They basically determined that if you’re importing honey (into the U.S.), it’s got to be cheap honey,” he said.
“(They’re) not going to spend equivalent dollars bringing in imported honey.”
One reason why is that U.S. honey packers can put a “Made in the USA” label on American honey and sell it at a premium.
Another factor is more complex.
A number of people in America’s honey trade believe Canada imports cheap and fake honey from other countries, blends it with Canadian honey and then exports it to America.
Representatives of Canada’s honey industry have told U.S. buyers that such cases are rare, but it’s been difficult to dispel the idea.
Chris Hiatt, a North Dakota beekeeper and vice-president of the American Honey Producers Association, said he sympathizes with Canadian beekeepers.
“They have just as good as honey as I do, but the price is so much less.”
He said honey producers in Canada and the United States are facing the same issue — fake honey produced in China and then shipped to North America through another country.
“It’s laughable. Little countries like Myanmar or Taiwan … for 20 years half a million lb. (of honey) gets exported (annually),” he said.
“(Then) overnight (it’s) five or 10 million lb. That’s absolutely impossible…. It’s all honey from China trans-shipped through those countries.”
Hiatt said Canadian honey packers are also guilty of importing Chinese honey and blending it with domestic product.
“That’s what’s coming across the border and being bought by a lot of big American packers,” Hiatt said, noting the practice may explain the price discrepancy.
“To me it (the lower price) just points to cheap imports that are being blended into good-looking Canadian honey.”
Whatever the reason for the price gap, it’s now a market reality.
Canadian and American honey sold at similar prices before the fall of 2015, and many Canadian beekeepers initially assumed the two-tier system was a blip and prices would return to parity. However, it could be here for a while.
“Particularly given the political climate in the States,” Scarlett said, referring to the America First movement in the U.S.
Canadian beekeepers and the honey sector may need a strategy in response because shipping honey to the U.S. at a sizable price discount isn’t sustainable, Scarlett said.
Canada’s honey trade may need to put the Maple Leaf on bottles of honey and market it as a superior product in the U.S.
“I think it might be time to go into competition (in the U.S. market),” Scarlett said.
“Worldwide, Canada has such a good reputation for agricultural products. Maybe, in honey’s case, we should be taking advantage of that.”
Guy Chartier, chief executive officer of Bee Maid Honey, which is owned by beekeepers, is skeptical that “made in Canada” honey would be successful in the U.S. market.
Canada’s reputation as a source of clean and trustworthy food may hold weight in countries such as Japan and China, but less so in America.
“On the American side I’m not as convinced that it would have a large impact, just because they are pro-American flag.”
Canadian honey facts and figures
- In 2016 Canadian beekeepers produced 92.2 million lb. of honey.
- The value of Canada’s honey crop, from 2012-16, ranged from $157 to $210 million.
- Canada exported $50.9 million of honey to the U.S. in 2016.
- The U.S. imported $559 million worth of honey in 2016.
- In 2012 there were 690,000 honeybee colonies in Canada. In 2016 there were 750,000.
- Alberta, Manitoba and Saskatchewan account for 83 percent of Canada’s honey production.
Source: Agriculture Canada