The Honey Industry

The Honey Industry

Following are the results of Jeromie Miller's very hard work researching the Honey industry today as we work together on business planning for Bee Inspired. One of the really cool benefits of having a hard-working intern helping me right now is having access to a big huge database. Bigger than any news feed I've ever experienced.

  • The U.S. produces 150 million pounds of honey per year, but consumes 400-450 million pounds. (Taylor, 2013)
  • Two of the nations largest honey suppliers charged with buying illegally imported Chinese honey to avoid $80 million in Anti-dumping duties. (Mokhiber, 2013)
  • For both quality and duty reasons, legal imports of Chinese honey are presently absent from the US honey market. (Phipps, 2013e)
  • As part of the negotiated conditions for US support of China’s entry into the World Trade Organization, China agreed to allow its dumping cases to be resolved and judged by Third Country Surrogate Analysis. (Phipps, 2013e)
  • It is the treatment of China as non-market economy that underlies both 1) the huge number of anti-dumping petitions against all kinds of Chinese products such as honey, solar panels and shrimp, and 2) the prohibitively high anti-dumping duty rates resulting from Third Country Surrogate Analysis. (Phipps, 2013e)
  • If China is treated as a market economy in anti-dumping cases, then it will become much more difficult to win high and prohibitive anti-dumping duty margins. This issue is due to be reviewed no later than 2016, which is around the corner. American honey packers are already thinking about how to regain access to Chinese honey. (Phipps, 2013e)
  • Chinese companies are being encouraged to make overseas direct investments, which means buying hard assets rather than low yield U.S. treasury bonds. Already they have tried and succeeded to some degree in buying into the U.S. honey industry. They have been active in Brazil and Argentina. (Phipps, 2013e)
  • Just a few years ago, Chinese companies made a large purchase of highly fertile lands in California for which there are unrestricted water rights from the Colorado River. (Phipps, 2013e)
  • In his speech to the American Honey Producer’s Association in January 2013, attorney Mike Coursey described the confessions by Alfred L. Wolff Company employees to elaborate schemes to circumvent Chinese honey via Russia, India, Malaysia, South Korea, Mongolia, Indonesia, Taiwan, Philippines and Thailand. (Phipps, 2013e)
  • Wolff fraudulently entered honey valued at $39 million, and in addition over 2,000 drums of honey were seized from warehouses in Minnesota, Illinois and Washington. (Phipps, 2013e)
  • While substantial progress has been made over the past several years to prevent circumvention of Chinese honey, it will take several months to determine if disruption of the collusion that underlies circumvention will continue or mature in 2013. (Phipps, 2013e)
  • The circumvention of Chinese honey through a number of schemes such as transshipment through Indonesia, India, Malaysia, Thailand, South Korea, Taiwan, Russia and the Philippines, as well as the use of fraudulent customs categories. (Phipps, 2013a)
  • In 2012 the U.S. termination of the exclusion of honey blends from the dumping case imposes a duty of 2.63/kg. on honey blends and closes another significant loophole in the existing anti-dumping order on Chinese honey. (Phipps, 2013a)
  • Packers are convinced that 2013 will see further and dramatic success in curtailing circumvention and legally punishing those who have conspired to circumvent Chinese honey in violation of U.S. law. (Phipps, 2013a)
  • As fraudulently entered honey declines in volume US honey consumption may be far higher than current estimates indicate, since so much imported honey has entered the market either via transshipment or via non-honey customs classifications. (Phipps, 2013a)
  • 2012 declared imports were up 9% in volume over 2011. As of the end of December, the total value of imported honey for 2012 was $438 million. (Phipps, 2013a; via "National honey report," 2013)
  • American beekeepers in the first months of 2013 have expressed growing alarm at the severe loss of bee colonies. Some beekeepers have reported losses of over 50% of their bee population. (Phipps, 2013a)
  • Fifteen years ago it was typical for American beekeepers to produce 70-80 kilos per hive. In recent years, 20-25 kilos is usual and 35 kilos is regarded as a good extraction. This has affected not only supply of white honey, but has led to increased prices. (Phipps, 2013b)
  • Because of the threats of continuing economic malaise and/or recession in Europe, Japan and the USA, there is a possibility of “currency wars” as nations are tempted to de-value their currencies, lower their prices and thereby, increase their exports. In the overall global context, nonetheless, demand for white honey exceeds supply and prices remain at historically high levels. (Phipps, 2013b)
  • In the last few years, imports of white honey from India and Indonesia have declined sharply, in part due to government scrutiny of imported honey by ICE/U.S. Customs and the FDA. (Phipps, 2013b)
  • Total imports from Argentina for the first 11 months of 2012 were about $116 million. (Phipps, 2013c)
  • The reduction of pasturelands for the dairy and meat industries has in turn reduced Argentina’s total honey production from over 110,000 metric tons per year to a range of 65-80,000 tons per year. (Phipps, 2013c)
  • Abundance of flowers in the southern plains states in March and April of 2012 and in South Dakota in June. Expectations were high, but cold and rain intervened and the field did not turn into abundant honey in the drums. As a consequence, prices rose and the US white crop sold at very firm prices very quickly. As experienced members of the industry have learned from their predecessors, “don’t sell honey until it is in the drums.” (Phipps, 2013c)
  • Expectations were that the Argentine crop would be large, early, white and cheap, and an atmosphere of acute speculation developed. But El Niño brought more rains and cold and Argentina’s spring crop (September-December) was substantially delayed, reduced and darkened. (Phipps, 2013c)
  • Contrary to expectations, the proliferation of exporters did not result in lower prices, but in higher prices in early 2013, in some cases up to 20%. Overall inflation remains at about 25% in Argentina. (Phipps, 2013c)
  • Argentine Government reported to be demanding a quid pro quo t for Argentine importers of lucrative, high profit margin high tech items to be able to import, they must export an equivalent value of Argentine products to the world market. If reports are correct, new players may begin to export Argentine honey independently or in collaboration with traditional Argentine honey exporters. Such arrangements are both in violation of World Trade Organization rules and potentially a source of price distortion. lack of experience in quality control may lead to problems for new, inexperienced honey exporters in this era of Non-tariff Trade Barriers. (Phipps, 2013c)
  • Reports from Chile indicate that the same severe drought that threatens to significantly reduce Argentina’s third extraction is affecting their 2013 crop (Phipps, 2013c). Chile is 5th in white honey, 6th in light amber honey. ("National honey report," 2013)
  • Total exports from Vietnam declined in 2012 to 22,000 metric tons from 27,000 metric tons in 2011. (Phipps, 2013d)
  • In the first quarter of 2012, exports to the US declined significantly and then recovered later in the year. (Phipps, 2013d)
  • Vietnamese honey exporters are hopeful that they will be able to export to EU countries after March 2013. The lightest color from Vietnam is in the ELA range, and most Vietnam honey is Light Amber. (Phipps, 2013d)
  • Import patterns of Indian White, ELA and LA honey over the past 2 years showed a dramatic decrease in White imports and an increase in Light Amber. (Phipps, 2013d)
  • In 2012, some honey shipments imported into the US from India from 4-5 major Indian exporters was found to have residues of chloramphenicol, which was typically found in Chinese honey a decade ago and led to automatic detention of Chinese honey. (Phipps, 2013d)
  • Other Indian, Malaysian and New Zealand shipments were found by the FDA to be adulterated with corn or cane syrup. (Phipps, 2013d)
  • Honey and honey/syrup blend shipments from Thailand and Hong Kong tested positive for antibiotic residues. FDA import alerts were issued in December 2012 and February 2013. (Phipps, 2013d)
  • A serious and prolonged disruption of foreign production and U.S. imports for industrial honey could provoke a supply and price crisis for ELA and LA honey comparable to that faced by white honey in 2012 and 2013. (Phipps, 2013d)
  • There is an imperative to create a broader scientific database of primary honey samples to assess the complex chemical profiles of the world’s growing diversity of honey supply. The number of significant honey exporting nations is growing as are the number of floral and botanical sources. Honey from primary and pure floral sources must be scientifically gathered, authenticated and professionally analyzed. (Phipps, 2013f)
  • Vietnamese Beekeepers Association is welcoming the establishment of an international collaborative effort among private laboratories, government laboratories, independent and non-commercial academic scientists and experts to develop such a database for Vietnam. (Phipps, 2013f)
  • The majority of the Vietnamese honey crop comes from honey produced from leaves rather than from flowers, according to Vietnamese beekeepers. New floral sources are also becoming significant commercial sources of honey. New adulteration tests were based largely upon samples of honey produced from an older and narrower base of floral sources. (Phipps, 2013f)
  • Establishment of authenticated samples is, therefore, important, and the Vietnamese Beekeeping Association, government authorities, and government and private laboratories are supportive of a collaborative study, which may be conducted later this year. (Phipps, 2013f)
  • The lack of an adequate database that takes into account all the variables that affect the chemistry of honey has hurt, as Dr. Bowden pointed out, American beekeepers, not merely foreign exporters. Even the narrow base of non-authenticated samples used to establish testing parameters reveal a far greater diversity and far wider range in chemical profiles of honey than was originally hypothesized. (Phipps, 2013f)
  • As Dr. Bowden, who was a referee scientist for the USDA, noted, along with other scientists, there is a much wider range of variables such as floral source, climate (aridity or its opposite), elevation, season, soil content and atmospheric content that affect the photosynthetic and metabolic processes which determine the chemistry of the world’s diversity of honey. (Phipps, 2013f)
  • Therefore, it is both scientifically and legally imperative to do the fieldwork necessary to acquire authenticated samples from the world’s growing honey supply and to understand the multiplicity of variables, which determine the diverse chemical profiles. (Phipps, 2013f)
  • Since bees and plants, whose interaction produces honey, are both vulnerable to various diseases and pests, beekeepers must protect their bees and thereby the large-scale agricultural production of food for which bees is responsible. The modes and methods of protection of bees and plants inevitably lead to residues in honey. (Phipps, 2013f)
  • Developing global standards that promote use of safe protective methods and residue and testing levels that take into account average daily intake are tasks that will become essential as the world becomes increasingly economically integrated and interdependent. (Phipps, 2013f)
  • The essential role of bees in food production and especially antioxidant rich foods needs to be further communicated. (Phipps, 2013g)
  • The functional attributes of honey as an ingredient, along with product development and packing, await further efforts, efforts which give us the opportunity to learn from the European honey industry, the wine industry and the growth of the tea and coffee industries. (Phipps, 2013g)
  • Based upon international scientific investigations, honey must develop a solid scientific foundation to put the halo of health around this heaven-given nectar of the gods (Phipps, 2013g)
  • 32% increase compared to 2009(National Honey Board, 2012)
  • 85% of current users report that honey is used at least once a month in their household. (National Honey Board, 2012)
  • Honey continues to be used predominantly for food-related purposes, including in tea (67%), as an ingredient in a recipe (64%) and on toast/biscuits/muffins/cornbread (62%). (National Honey Board, 2012)
  • Revenue- $268.9M 2012, Up 3.3% from 2011, expected to go up 8.8% in 2013 for rev of $298.6M due to new uses of honey. (Kruchkin, 2012)
  • Import- $420.6M, 63.1% of demand, expected to be 70% by 2017. (Kruchkin, 2012)
  • Beekeeping farms declining at 1.4% annually.(Kruchkin, 2012)
  • Wages 29% of revenue. (Kruchkin, 2012)
  • As price of sugar increases the demand for alternative sweeteners will increase creating opportunity for honey industry. (Kruchkin, 2012)
  • Argentina has 27.5% of honey market as largest source of foreign honey. (Kruchkin, 2012)
  • Many industry operators now source their bees to crop farmers for pollination purposes. (Kruchkin, 2012)
  • Because honey farmers do not receive government price subsidies, revenue and profit remain volatile. (Kruchkin, 2012)
  • The increasing focus on healthy and organic food products will drive demand for naturally made honey, opening a door for US producers. (Kruchkin, 2012)
  • The use of bee products in medicine may also influence demand for the industry's products over the next five years. (Kruchkin, 2012)
  • Propolis, a resinous mixture used to seal hives, is used in a variety of natural medicines, including antibiotics, dentists' anti-plaque agents and anti-tumor growth agents. (Kruchkin, 2012)
  • Research into the properties of propolis may discover new uses for the product. Moreover, demand for natural medicine alternatives will likely rise, boosting demand for natural honey. (Kruchkin, 2012)
  • The almond crop in California is forecast to expand, and because almond farmers are some of the heaviest users of outsourced pollination services, who also pay the highest price for these services, a renewed demand is expected to boost prices for bees. (Kruchkin, 2012)
  • Every year, about four million pounds of beeswax is produced, valued at about $7.0 million. (Kruchkin, 2012)
  • Beeswax could be sold in the production of cosmetics and pharmaceuticals, candles and new honeycombs for bees. Beeswax is also used in the manufacture of crayons and polishes. (Kruchkin, 2012)
  • Royal jelly and propolis are used quite widely in natural and traditional medicines. (Kruchkin, 2012)
  • Interest for Beekeeping industry products, however, largely depends on research into the antioxidant and antimicrobial benefits of honey, propolis and other products. (Kruchkin, 2012)
  • About half of the bee colonies in the United States are rented to pollinate the California almond crop in February and early March. (Kruchkin, 2012)
  • Beekeeping operations: the Plains, generating about 40.5% of the industry's total product in 2012, followed by the West with 15.7% and the Southeast with another 15.1%. (Kruchkin, 2012)
  • North Dakota produces the greatest volume of industry goods at about 22.2%, followed by South Dakota, California, Montana and Florida. These top-five producing states house large commercial apiaries, and thus together account for over half of industry production at about 61.5% in 2012. (Kruchkin, 2012)

References
Kruchkin, Agiimaa. (2012). Beekeeping in the US (IBISWorld Industry Report-11291). Retrieved from Stevenson University, Library Research Database: http://ezproxy.stevenson.edu:2151/reports/us/industry/default.aspx?entid=68

Mokhiber, R. (2013, March 11). Foley & lardner’s lisa noller on securing deferred prosecution agreements. Retrieved from http://www.corporatecrimereporter.com/news/200/lisanoller03112013/

National Honey Board. (2012). Market research: Use & Attitude survey. Retrieved from http://www.honey.com/honey-industry/honey-and-bee-research/market-research/

Phipps, R. (2013a, February 21). The march to monopoly has lost its momentum. Retrieved from http://www.dadant.com/news/international-honey-market-update

Phipps, R. (2013b, February 21). The march to monopoly has lost its momentum: Honey Supply.

Retrieved from http://www.dadant.com/news/international-honey-market-update

Phipps, R. (2013c, February 21). The march to monopoly has lost its momentum: South America. Retrieved from http://www.dadant.com/news/international-honey-market-update

Phipps, R. (2013d, February 21). The march to monopoly has lost its momentum: Asia. Retrieved from http://www.dadant.com/news/international-honey-market-update

Phipps, R. (2013e, February 21). The march to monopoly has lost its momentum: Chinese honey in North America?. Retrieved from http://www.dadant.com/news/international-honey-market-update

Phipps, R. (2013f, February 21). The march to monopoly has lost its momentum: Identifying Honey’s Diverse Botanicals. Retrieved from http://www.dadant.com/news/international-honey-market-update

Phipps, R. (2013g, February 21). The march to monopoly has lost its momentum: Opportunities for Marketing Honey as a Healthy, Natural Product. Retrieved from http://www.dadant.com/news/international-honey-market-update

Taylor, S. (2013, March 13). How to avoid doctored food keeping it real: Prescriptions for avoiding doctored food. Chicago Tribune.

U.S. Department of Agriculture, Fruit and Vegetable Programs. (2013). National honey report (No. XXXIII – 3). Retrieved from http://usda.mannlib.cornell.edu/usda/ams/FVMHONEY.pdf

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