U.S. honey producers stung by imports

By Marilyn Bay Wentz

U.S. honey production is anything but sweet these days as producer prices have dropped to about half of what they were in 1995.

“I’m sitting on 600,000 pounds of honey I can’t get anyone to buy (at a reasonable price),” said Mark Brady, a 47-year-old honey producer from Waxahachie, Texas, just 30 miles south of Dallas. “The best offer I can get at this time is 42 cents a pound from a buyer who told me to ‘come back when I get desperate’.”

With 6,000 hives or about 300 million bees, Brady is one of the state’s largest honey producers. He estimates his cost of production for honey at 60-70 cents per pound.

Rocky Mountain Farmers Union member Paul Hendricks of Englewood, Colo., says most cost-of-production estimates he has heard are even higher, in the 80-cent to $1.15-per-pound range.

The cause of the precipitous drop in producer prices, according to the beekeeping industry, is excessive below-cost-of-production honey imports from China and Argentina. In 1999, Argentina supplied 95 million pounds or nearly one-third of the U.S. demand for honey. China sold 48 million pounds into the U.S. market, which is about one-sixth of the U.S. honey market.

The glut of honey has led to plunging producer prices, resulting in U.S. beekeepers going out of business or operating in the red. In July, the nation’s largest beekeeper Horace Bell Honey Company, near Orlando, Fl., announced it would go out of business, putting its 40,000 hives on the auction block.

“The beekeepers that are still in business are expending the equity in their operations, but that can only last for so long,” Brady said. “For me, I keep hanging on because every dime I have is invested in this business.”

Producers like Brady and Hendricks are hopeful an anti-dumping petition against China and Argentina will be their salvation. U.S. honey producers are gathering pledges for the $700,000 it will take to file the petition. They have gathered two-thirds of the money and hope to file the petition with the U.S. International Trade Commission sometime in October.

“We have to pay for studies to prove China and Argentina are selling honey into the U.S. market below their costs of production and also that this action is injuring U.S. producers,” said Richard Adee, president of the American Honey Producers Association. “Not only is there a dumping issue, but in the case of Argentina, its honey producers receive subsidies.”

According to Adee, the petition will request that tariffs and quotas be levied against the Chinese and Argentine honey imports. “Both of these countries labor costs are lower than the United States. We favor free trade but only if it is fair trade.”

In the United States, it is estimated that 35 percent the cost of producing honey is the cost of labor.

U.S. honey producers have already been successful with an anti-dumping petition. In 1995, they won a similar suit, which resulted in the United States imposing a quota and minimum price for Chinese honey. The minimum price, which expired July 31, 2000, helped restore 1995 prices from 50 cents a pound to 90-95 cents a pound.

Despite today’s plummeting producer prices, consumer honey prices remain virtually unchanged. Currently, more than half of the honey on U.S. supermarket shelves is imported, a fact that has become a bur under the saddle for U.S. producers who are mandated to pay a portion of their honey proceeds into a national marketing and promotion fund.

The promotion program is distasteful to producers who say they are being forced to promote their competitors. As a result, they have asked for a referendum on continuing it.

“U.S. honey producers have an opportunity Sept. 5-30 to vote on whether or not they want to continue paying to promote foreign honey which is putting them out of business,” Hendricks said. “The problem is that the promotions are generic. They do not specifically promote American honey.”

While honey may not seem to be a mainstay in the American diet, it is heavily used in processed foods, especially in breakfast cereals, breads and confectionary items. But there is another area in which the beekeeping industry is vital to U.S. agriculture.

“We perform a valuable service for all of agriculture through pollination of plants,” Brady said. “Livestock producers need us because they will not have alfalfa hay without bees to pollinate it. In fact, 30 percent of food plants need honey bee pollination.”

Brady, who says beekeepers can no longer survive unless they also have pollination work, has been asked to increase his hives for use in seed alfalfa pollination.

“I provide bees for 1,000 acres of seed alfalfa. The grower would like to increase his production to 5,000 acres, but I just cannot take the risk,” Brady said. “Even with the pollination contract, beekeeping is a money-losing business. Unless the anti-dumping petition brings us relief, we cannot make it.”

Other agricultural sectors have already begun to suffer from the difficulties facing U.S. beekeepers.

According to Hendricks, there has recently been a shortage of bees used in pollination of California’s almond crop. It takes 1700 semi-loads of bees to pollinate California’s almonds and 70 percent of the world’s almonds are grown in California. Bees also are vital to the pollination of many other crops, including cucumbers and melons.

“There will be a domino effect,” Hendricks said. “As commercial beekeepers fold, food costs will increase.”