The Rise and Rise (and Rise) of Honey Prices

Spend Matters welcomes this guest post form Liliana Gonzalez of Mintec.

Honey is one of the oldest sweeteners in the world with history dating back to ancient times. It is renowned for its health benefits and is in products such as cough medicine, is used in industrial ingredients in beauty products, and used a well as a flavoring in many delicious foods. Honey production is one of the wonders of nature in itself. After the bees have extracted the nectar of flowers, it is converted into honey by a process of regurgitation and evaporation, before finally being put into wax honeycombs in the hive.

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There are more than 300 types of honey in the US, all varying in color and flavor, depending on the blossoms or the bees’ nectar source. Most of the honey sold in the US is in liquid form, which is more useful for food blending.

For over 10 years, honey prices in the US have been rising steadily as a result of low domestic supply. There has been a decline in production since 2000, with latest values showing that 67,800 tonnes of honey were produced in 2013, down 5% year-over-year, but down 35% from what was produced 20 years ago. This drop is due toa fall in yield per colony.

This yield fall is the result of a phenomenon named Colony Collapse Disorder (CCD) in which workerhoney bees disappear, resulting in a dead colony. There is much debate as to the cause of CCD, with no hard and fast reasons emerging as yet, however some believe it is naturally occurring. CCD has also had adverse effects on agricultural crops that need bees to pollinate fruit, vegetable and field crop flowers.

For honey though, the result of this intriguing and unexplained phenomenon, leading to a fall in production, is a seemingly unstoppable upward trend of honey prices in the US. Currently, prices are 13% higher y-o-y, but have risen over 80% since 2006. That’s on top of an increase in demand over the past 10 years. Due to the imbalance of supply and demand, imports into the US have been rising steadily, with volumes in 2013 reaching 153,750 tonnes, up 8% y-o-y, totalling around 65% of total US supply.

Due to the importance of bees in crop and tree pollination, large investments and initiatives have been done in the US to research CCD and to improve bee management practices, with action plans set up a few years ago by the USDA. It is estimated that bees pollinate around $15 billion worth of crops every year in the US, hence the importance to know more about this phenomenon and how to prevent further losses.

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