Subject: wholesale honey market

From: [email-masked] (Andy Nachbaur)
Date: Mon, 29 Apr 1996 02:54:00 GMT

*FYI* OFF THE BEE-list
KJ>From: Kirk Jones <[email-masked]>
  >Date:         Sun, 28 Apr 1996 18:16:50 -0400
  >Subject:      wholesale honey market

KJ>I would appreciate any reports of current pricing on wholesale loads of
  >honey. Allen Dick reported lower prices on Argentine honey coming in.

I missed that report, but there will be no new Argentine crop until
next November and much of that honey has moved into the market. Sue
Bee had to purchase 4+ million pounds which was "new" business for
Argentine honey.

KJ>Some packers are offering contracts on this years crops. Anyone care to
  >predict at what prices packers may offer in Sept-Oct?

Honey packers in California are saying "big crop" here, this is far from
the truth and the crop will be much less then last year because of the
lack of rain from LA south, and that the area that can make up the big
crops is LA south. The Orange flow was cut short by cold weather here in
Central California and in Florida. Plant condition reports are not all
good from producing areas with some lateness of bloom due to local
weather conditions. The Dakotas are reported to look good, but Texas is
suffering from the lack of rain. Bee conditions overall are not great
with much makeup because of winter loss.

KJ>With the honey loan program nixed(so I hear), I thought that the market may
  >soften somewhat this fall, but may pick up at the end of the year.

Yes, no LOAN program on honey, but it should not make that much
difference as there are still banks open. As for the market it's all
guess work as in the history of honey marketing we as producers have
never have experienced. You can be sure the packers will be doing
everything to force the market down. The consumption of all sugars
was up in 1995 world wide and is expected to be up another 4-5% this
year.

KJ>One packer offered .90/lb. We're tempted to contract.

That is a very good price and may be the highest price you have ever
received. But so is the gas you buy... Cash sales made last week for old
crop white honey (as private report) were still at $1.01 cents per
pound delivered, drums back. All in all, the price you sell for is the
market price and .90 cents ahead of production is very nice with this:

WARNING!!

Honey packers have a history of not honoring early contracts. "yor honey
is dark'er, wet'er, or whatever" So be sure you have a real contract and
know your buyer. If the price is higher then .90 cents you will not have
a worry.
                         ttul  Andy-

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---

From: [email-masked] (Allen Dick)
Date: Tue, 30 Apr 96 12:29:24 GMT

(I'll quote the whole thing below, seeing as many newsfeeds are what 
they are...  (One provider I use has 19 articles under this group, 
another has 4 !!!))

Andy makes some good points -- as always, and provides some useful 
facts.  Moreover wintering losses up here in Canada are much greater 
than usual -- about double.

In any market, prices will fluctuate, going down a bit, then up a bit 
as various buyer weigh in for their various reasons -- season, 
currency fluctuations, etc.

What I guess is the unknown factor is the matter of *end user 
resistance*.  

Due to the nature of honey distribution, there is about a  four to 
five month delay from the time that the beekeeper gets an increased 
price to the time that the price increase hits the consumer.

The consumer's reaction will determine what ultimately happens to 
honey prices.  We do not know a whole lot about the elasticity of the 
supply/demand curve -- especially in this newly elevated price 
territory.  Until the results of theis 'experiment' come in, we'll all 
be guessing.

-- After all, a year ago, who would have been guessing some of us 
would  be turning up our noses at $1 per pound.  (How soon we forget).

There are a number of consumers: the export market, the industrial 
market, the grocery market, and the specialty market.  Each one will 
have a different reaction to price increase, and that may change over 
time as the customer adjusts to the increase, and perhaps finds 
substitutes.

The export markets of course break down into sub goups, just as the 
domestic markets do.  Currency, seasonal, political, and cultural 
factors distinguish them.

In the industrial markets (food manufacturers, bakeries, beverages, 
etc.) there may be a short term *inability* to switch away from honey 
due to formulations, contracts, packaging printed and on hand, etc.  
Whether honey provides a sufficient marketing advantage compared to 
other ingredients vs. the per unit cost will determine the degree of 
customer loyalty here.

In the grocery markets, some shoppers are price conscious, and others 
have no idea what anything costs.  The former group may resist buying 
temporarily or permanently, or buy because of previous plans, but 
modify the honey budget.  What happens, time will tell.  The buyers 
for the major chains defend and attack prices with great 
determination, and since honey is not an essential item in many 
stores, some brands stand in danger of being de-listed.

The specialty market is interesting because it is not clear what 
further prices can be demanded for comb or gift packs in light of bulk 
price increases, inasmuch as these items are often priced by 'price 
point' methods, not by cost or competitive basis.

Information on prices comes to a great extent from buyers who are 
presently shopping around.  Some are more honest (candid) than others 
when it comes to what the true market conditions are.

MArket activity in bulk honey tends to come in waves,as rumours 
circulate and various interests try to influence price.  In the 
absence of orders and active buying interest, prices tend to slope off 
a bit, to again firm in the face of any renewed buying interest.

Sometimes the lulls last days, sometimes weeks, sometimes months, and 
sometimes even years.

Lately buying interest has been frequent, and the prices have been 
rising more than falling, and there is some considerable buyer 
interest in securing comittments for supplies, not only to get to the 
next harvest, but enough to be able to wait out the turbulence that is 
possible around that time.

There is some speculation as to what would happen if there is a short 
crop -- or a surplus.  It is difficult to plan for both, since there 
is no futures market in honey, and individual contracts are subject to 
so many abuses and defaults on both sides.

So, it is interesting to watch, and to try to find a price level that 
provides maximum profit.

I suppose the old saw applies here:

"The bears make a little & the bulls make a little -- but the hogs get 
slaughtered".

--------------------------------------------
In article <[email-masked]>,
>know your buyer. If the price is higher then .90 cents you will not 
have

Regards

Allen

W. Allen Dick, Beekeeper                                    VE6CFK
Rural Route One, Swalwell, Alberta  Canada  T0M 1Y0
    Honey, Bees, & Art <http://www.cuug.ab.ca:8001/~dicka/>