Something in the news caught my attention. The falling price of honey is now a national news item. We noticed that prices began falling a year ago, when wholesale prices started their tumble from $2.25 to $1.25. Now even the press has caught the story. Here’s a sheet from the USDA’s monthly honey price report:
That’s right. You can buy barrels of Canadian organic honey for as little as $1/pound. It might as well be free.
I figured that beekeepers would suffer this price-tragedy in silent resignation, but then a major news network carried this headline: Global Honey Glut Stinging Manitoba Beekeepers: Producers worry over-supply could force some out of business. This refers to Manitoba beekeepers, but the story is identical across the country. And around the world.
Here in Canada, last year’s crop was almost 10% larger than the year before, so beekeepers found themselves with a lot of 2015 honey on hand. In fact, some beekeepers may have miscalculated and decided to hold their honey when prices first began to drop, hoping prices would soon recover. Tonnes of last year’s honey are in shops while the 2016 crop is being extracted.
Honey is in temporary oversupply. Nothing too dramatic. It only takes a small surplus to collapse prices. Let’s say, for example, there is 5% more honey than the world needs. That would be a hundred million pounds excess. No one wants to be among the folks holding that hundred million pounds. The sad reality is that a 5% oversupply can cut prices in half.
So, beekeepers drop their price to move their stock. As soon as one or two major suppliers sell cheap, others have to match the trend or risk holding honey that becomes less valuable each day. (It works the other way, too. If there is a shortage, beekeepers could hold their crop, hoping prices will continue trending upwards, thus adding to scarcity and pushing prices even higher.)
I suspect with the current downturn, some beekeepers will reduce their colony numbers, and wait for the price to rise again. It will, but it could take a year or two. For beekeepers who have been struggling, two years may be too long to wait. Beekeepers without supplementary income or deep pockets may need to close their businesses. Of course, that will create a future shortage and higher prices.