Steady demand | Production isn’t increasing despite good market
It’s a standard rule in agriculture: when the price of a commodity rises, farmers produce more of that commodity, putting downward pressure on price.
The honey market is defying that rule.
Honey prices in the United States averaged 98 cents per pound in 2007 and increased steadily to hit $2.10 per lb. in 2013, an increase of 110 percent over seven years, according to a market report on the American Honey Producers Association website.
Canadian prices have risen alongside the U.S. because the American market is the price maker, said Rod Scarlett, executive director of the Canadian Honey Council.
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“They are the driver for Canadian pricing and the driver for our export market.”
Prices paid to Canadian beekeepers are $2.10 to $2.25 per lb. this summer, up slightly from last year.
Prices have risen and may continue to rise because Americans consume 60 percent of global honey production. The National Honey Board says U.S. demand was 450 million lb. last year, up from 410 million lb. in 2010.
However, American honey production hasn’t increased in response.
U.S. beekeepers have been stuck below 150 million lb. for several years, producing 149 million lb. in 2013, 147 million in 2012 and 148 million in 2011.
Ron Phipps, president of CPNA international, a honey importer and market analysis firm, said the U.S. produced 220 million lb. of honey in the 1990s.
Those days are over, and 150 million lb. may become the standard U.S. honey output.
“I think we’re getting a new normal (for production),” said Randy Verhoek, president of the American Honey Producers Association.
Verhoek, who has operations in Danbury, Texas, and Bismarck, North Dakota, said American beekeepers could produce more honey this year, but there’s no guarantee.
“Because there is a lot of extra clover (around), production could be up an extra 20 to 40 million lb. this year, but there’s other factors that could be bringing it back down,” he said.
“California has had such a drought and Florida (production) is down.”
Phipps said in a spring market report that the global honey market is “approaching a crisis due to the shortage of honey” because production is simply not keeping up with demand.”
Verhoek said Argentina, one of the world’s largest honey producers and a major supplier to the U.S. market, cannot sustain or increase its crop because of shifting agricultural priorities.
“They have the same thing we’ve got going. They’re just plowing up more and more good honeybee pasture and planting corn and soybeans.”
Verhoek said a number of factors have compromised the U.S. beekeeping industry over the last decade, including varroa mites and pesticides. However, habitat loss has been a major issue.
He said honey prices above $2 per lb. could become the norm for beekeepers, but he doesn’t think higher retail prices will curtail sales because honey is a healthy product relative to other sweeteners.
“People are becoming more and more aware that high fructose corn syrup may not be the best thing for health,” he said.
“There’s getting to be a shift back to the … health benefits of honey. Dr. Oz did a big show on it.”
Scarlett said Canada’s honey industry has a fantastic opportunity to expand and capture more of the U.S. market, but beekeepers need to sort out labour needs and other issues to take full advantage of the market void.
