Commercial Honey Industry

 
 
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 Industry highlights | Regulatory basics | Marketing basics | Production basics | Economic/finance basics | Resources | Key management issues | Footnotes

The purpose of this factsheet is to introduce honey production and marketing as a potential business opportunity. This overview focuses on the key management issues in developing and operating a honey enterprise in Alberta. This profile isn't intended to be a substitute for individuals making their own thorough assessment of all the key factors that would influence the success of their individual enterprise.

Industry Highlights

  • Honey was the world's primary sweetener prior to the use of refined sugar. The popularity of honey is largely due to it being a natural sweetener.
  • Honey can be used as a food spread, in home baking and in beverages. Commercial uses of honey include being a sweetener in cereals, cake mixes, processed foods, jams, jellies and increasingly as an ingredient in health and beauty products.
  • Commercial honey production is a year-round operation with the most intense activity being from March to October.
  • The honey industry also produces:1
    • beeswax for use in the pharmaceutical and dental industries as well as for cosmetics, ointments, candles and household waxes
    • pollen, rich in protein, which is used as a diet supplement
    • propolis which is becoming widely used as an ingredient in cosmetics and lip balms, as well as a tonic
    • royal jelly which is increasingly used in skin creams and lotions for its potential beneficial effect on aging skin
  • In Canada there are an estimated 10,500 beekeepers operating more than 563,000 hives.2
  • The following table documents the key production statistics for the Alberta honey industry over the past 10 years.3
    Table No. 1 Historical Data on Alberta Honey Production
    Year
    Number
    of
    Beekeepers
    Number
    of
    Colonies
    Colonies
    per
    Beekeeper
    Production
    per
    Colony (lbs)
    Price
    per
    Pound
    1988
    1,140
    150,000
    132
    154
    $0.399
    1989
    855
    143,500
    168
    119
    $0.490
    1990
    840
    152,000
    181
    154
    $0.581
    1991
    830
    147,000
    177
    143
    $0.578
    1992
    800
    148,000
    185
    156
    $0.587
    1993
    761
    148,000
    194
    160
    $0.617
    1994
    750
    159,000
    212
    195
    $0.682
    1995
    750
    175,000
    233
    122
    $0.833
    1996
    750
    175,000
    233
    116
    $1.25
    1997
    725
    175,000
    241
    135
    $1.10
    1998
    730
    205,000
    281
    187
    $0.887
    1999
    725
    205,000
    283
    121
    $0.813
    2000p
    747
    215,000
    288
    108
    $0.80
    p Preliminary data
  • Honey production in Alberta includes hobbyists, side-liners and commercial producers. Hobbyists produce for themselves, relatives and friends. Generally side-liners have less than 250 hives and produce honey for sale to consumers and processors. Commercial producers operate more than 250 hives and produce honey for sale to consumers, to processors and distributors of honey and honey products.
  • The following break down of beekeepers by size of operation is compiled from the annual registration of beekeepers.4

    Table No. 2 Registered Beekeepers by Size of Operation
    Size of Operation
    (No. of Colonies)
    1995
    1996
    1997
    1998
    1999
    2000
    0
    132
    164
    144
    122
    118
    138
    1-50
    377
    350
    326
    390
    393
    396
    51 - 100
    23
    35
    34
    38
    38
    38
    101 - 200
    28
    20
    28
    34
    31
    32
    201 - 600
    69
    60
    59
    51
    52
    57
    601 - 1250
    41
    41
    40
    48
    43
    40
    1251 - 2000
    21
    16
    13
    21
    19
    15
    2000+
    18
    18
    22
    24
    28
    31
    Total
    709
    704
    666
    728
    722
    747

  • The Prairie provinces account for 80 per cent of Canadian honey production. Alberta is the largest honey producing province, producing about 40 per cent of Canadian honey. Average honey production in Alberta is 141 pounds per hive annually, twice the world average.5

    Table No. 3 Annual Alberta and Canadian Honey Production in Tonnes (000's pounds)6
    1996
    1997
    1998
    1999
    2000p
    Alberta (t)
    9,169
    10,719
    17,393
    9,301
    10,532
    (000lbs)
    (20,215)
    (23,625)
    (38,335)
    (20,500)
    (23,220)
    Canada (t)
    26,985
    31,019
    46,096
    34,643
    31,461
    (000 lbs)
    (59,475)
    (68,366)
    (101,595)
    (76,353)
    (69,359)
    p Preliminary data

  • Alberta honey producers have the following advantages:
    • long daylight hours in the summer
    • access to vast expanses of clover, alfalfa and canola that provide foraging for bees and results in a mild white honey that is sold for premium prices
    • a world wide reputation as suppliers of quality honey
  • The critical management issues for Alberta honey producers are:
    • the wide variation in production levels from year to year (it's not unusual for production to rise or fall 50 to 100 per cent from one year to the next)
    • volatile market prices
    • disease problems
    • maintaining colony count in spite of winter losses and limited offshore supplies of queen bees
  • New entrants to the honey industry, (as well as their families) must recognize that keeping bees means being stung. For most people, a bee's sting means a brief period of discomfort. However a small portion of the population (0.4%) is in danger of death from anaphylactic shock due to a bee sting. Shortness of breath, hives over the body and itching in locations away from the actual sting are causes for concern.
  • Individuals considering entering the honey industry must carefully consider the following factors:
    • ability to achieve acceptable levels of production (pounds per hive) for the areas they are working in
    • ability to achieve costs of production that are competitive with world market prices
    • ability to survive periods of low production or low prices
    • passion and commitment to working with bees on a daily basis
    • ability to effectively manage their time
Regulatory Basics
  • The Alberta Bee Act regulates beekeeping in the Province of Alberta. The act requires all persons who own or possess bees or used beekeeping equipment to register annually with the Provincial Apiculturist.
  • The Alberta Bee Act requires that a permit must be obtained from the Provincial Apiculturist in order to import honey bees into Alberta from any other Canadian province. A certificate of inspection at the originating province isn't a permit to move bees into Alberta.
  • The Canada/U.S. border has been closed to honeybee imports since 1987, when the varroa parasitic mite was first detected in the United States. A permit from the Canadian Food Inspection Agency (CFIA) is required to import honey bees from Hawaii.
  • Bees can be imported from Australia and New Zealand. The appropriate permits must be obtained from CFIA.
  • The CFIA is now monitoring the Africanized honeybee found in Central and South American.
  • Federal regulations stipulate that all honey must be free of foreign material and be fit for human consumption.
  • CFIA also regulates the packing of domestic and exported honey.7 Individuals who intend to export honey out of the province or country or sell into retail stores, must have their honey houses inspected and registered by CFIA.
  • All honey to be exported from Canada must be inspected by officials from CFIA. It must be certified and have the number of the registered honey processing facility on its label.
  • Honey for export to the United States must be shipped in containers that meet the requirements of the U.S. Food and Drug Administration (FDA) and U.S. Customs.
  • Producers who market their honey directly to consumers or a wholesaler must comply with labeling regulations. The label must include: the common product name, quantity, name and address of producer or packer, grade and color of the honey. Honey shipped out of Alberta must have a registration number on the label.8
  • Commercial beekeepers who operate in cities, towns, villages and some rural areas may be required to obtain business permits from the local municipality.
    Marketing Basics
    • Domestic honey consumption data for key honey consuming countries are presented in Table Number Four.9

      Table No. 4 Domestic Honey Consumption for Selected Countries (tonnes)
      Canada
      China
      Germany
      United States
      1995
      24,550
      75,205
      93,000
      155,000
      1996
      25,144
      85,760
      88,950
      151,526
      1997
      26,605
      120,003
      85,798
      149,161
      1998
      26,900
      123,100
      88,000
      151,000
      1999
      27,250
      122,500
      92,749
      152,300
      2000p
      27,500
      123,300
      87,800
      153,200
      p Preliminary data

    • Approximately one-half of Canadian honey is sold to domestic consumers or processors, while exports average 9,000 to 14,000 metric tonnes annually.10

      Table No. 5 Canadian Exports of Honey
      United States
      Other Countries
      Total Exports
      1996rtonnes
      8,002
      1,980
      9,981
      $'000
      22,835
      5,171
      28,006
      1997tonnes
      3,941
      3,479
      7,420
      $'000
      12,530
      8,867
      21,397
      1998tonnes
      7,050
      4,158
      11,208
      $'000
      18,820
      9,540
      28,360
      1999tonnes
      12,084
      2,632
      14,716
      $'000
      25,782
      5,180
      30,962
      2000tonnes
      12,963
      2,360
      15,323
      $'000
      26,342
      4,638
      30,980
      r revised

      Table No. 6 Alberta Exports of Honey
      United States
      Other Countries
      Total Exports
      1996rtonnes
      624
      732
      1,356
      $'000
      2,223
      1,951
      4,174
      1997tonnes
      624
      1,726
      2,350
      $'000
      1,918
      4,465
      6,383
      1998tonnes
      1,545
      2,615
      4,160
      $'000
      4,250
      6,025
      10,276
      1999tonnes
      2,649
      1,667
      4,316
      $'000
      5,443
      3,312
      8,755
      2000tonnes
      1,746
      1,164
      2,910
      $'000
      3,686
      2,343
      6,029
      r revised
      Source: Statistics Canada
      Prepared by: Statistics and Data Development Unit (AAFRD)
    • Honey produced in Alberta accounts for about 1 per cent of total world production and 1.5 to 2.0 per cent of total world honey trade. Approximately 20 per cent of Alberta's honey is used in Alberta. Significant amounts are used in Quebec, Ontario and the lower mainland of British Columbia.
    • Alberta honey has earned world-wide respect for being a high quality product. The pure white clover honey produced in Alberta often earns a premium price in world markets.
    • The primary honey producers in the world are China, United States, the former Soviet Union, Mexico, Argentina and Canada.
    • The key exporters in the world honey market are China supplying 30 to 35 per cent, Mexico supplying 20 per cent and Argentina supplying 15 to 20 per cent. The three biggest honey importers are Germany, Japan and the United States.
    • Even though the United States produces 50 per cent of North American honey, most of it is consumed domestically. Since 1994, U.S. imports have ranged from 40,000 to 74,000 metric tonnes every year.11
    • The United States is the largest importer of Canadian honey purchasing 50 to 80 per cent of annual exports. Germany, Great Britain, France, the Netherlands, Sweden and Japan are also notable buyers of Canadian honey.
    • Canadian honey is preferred by American packers due to its high quality and pale color. A large portion of Canadian raw, bulk honey imported into the United States is blended with the darker colored honey produced in the U.S.
    • Since Alberta beekeepers compete in the world honey market, they are influenced by changes occurring in other producing and importing areas. Factors such as increasing Chinese production and the U.S. Farm Policy need to be considered when evaluating the long term prospects for Canadian honey in world markets.
    • Honey is graded according to moisture and color. The color classifications for packaged honey are white, golden, amber and dark. Bulk honey also includes an extra white and light amber classification.
    • The maximum moisture content for pasteurized and non pasteurized honey regulations are currently under review.
    • Alberta producers can sell their product to: retailers, honey co-operatives, honey packers and dealers, consumers or the export market.
    • Honey producers should evaluate the following factors when comparing these markets:
      • payment terms
      • whether the buyer or the seller provides the barrels
      • whether the price is quoted for the farm gate or delivered to the buyer
      • how weights are determined
      • how and where quality is determined
    • Honey can be sold directly to consumers through sales made at the honey house, road side stands or at farmers' markets.
    • Producers who sell their honey directly to consumers must ensure their honey is clean, below the maximum moisture content, in new clean containers and properly labeled. Producers who market at farmer's markets have to determine the appropriate preparation, packaging and pricing for their product.
    • Pricing is an important issue in achieving sales and profitability. There are several important considerations in pricing honey. The price should be based on the cost of production. The minimum acceptable price should cover all production, marketing, transportation and labor costs. Competitor prices are an important consideration in pricing honey for sale to consumers. However, pricing at the same level as your competitors can be dangerous if your costs of production aren't taken into consideration. Pricing too low can be harmful to the industry.
    • Farm gate sales at the honey house require proximity to large populations centres, good roads, a parking area, good signage, facilities to accommodate consumers and liability insurance.
    • The advantages of farm gate sales include:
      • cash payments from consumers without incurring transportation costs
      • opportunity to market honey as "farm fresh"
      • opportunity to develop products for niche markets
      • opportunity to develop a complimentary agri-tourism operation
      • gaining a sense of independence and accomplishment
    • There are several limitations to farm gate sales.
      • The potential to increase sales is limited and producers may not be able to market all of the product through their outlet. As a result, producers need other marketing channels for honey that can't be sold at the farm gate.
      • Farm gate sales require additional facilities, equipment, staff and liability coverage. Consumers often fill their own containers, so a heated tank with a continuous supply of honey is desirable. Also, honey sold at the farm gate requires packaging in various sized containers. This can be expensive.
      • Farm gate sales require a significant level of advertising and product promotion.
    • The critical management considerations for farm gate sales are:
      • a highly visible location to attract customers
      • the ability to manage labor costs, particularly if retail sales requires having an additional person to manage the sales outlet
    • Farmers' markets generally consist of a number of growers and producers selling their product directly to consumers at a common location. Each producer has a separate stall or stand at the market. There are farmers' markets located in most urban centres in Alberta. A publication listing the farmers' markets is available from the offices of Alberta Agriculture, Food and Rural Development or on the department's web site at www.agric.gov.ab.ca.
    • The advantages of farmers' markets include:
      • benefits from collective promotion
      • opportunity to gain new market exposure
      • provision of parking and good access to consumers that may not be available to individual producers
      • opportunity to market product and gain exposure at a number of markets since there are numerous farmers' markets operating during the summer season
    • The limitations of farmers' markets are:
      • producers must package and transport their honey to the market
      • individual producers must be prepared for intensive price competition from other vendors in order to make sales
      • producers must be prepared to have unsold honey at the end of the day
    • Some producers have developed their own label and market their honey directly to retailers in competition with packers. Selling to retailers requires providing the product in the size of packaging, quantity and time specified by the retailer.
    • Producers who sell their honey to retailers must understand the marketing strategy employed by the retailer. For example, one retailer may pursue a strategy of lowest price while another retailer may pursue the strategy of selling high quality products.
    • Honey producers considering selling to retailers must be prepared to perform the following marketing activities:
      • make business calls on retailers to develop their markets
      • maintain contact with retailers
      • respond to changing customer tastes and preferences
      • package and handle the honey product as required by the retailer
      • be prepared to work with several different retailers each requiring different packaging
    • Honey co-ops, like Alberta Honey Producers Cooperative Ltd. in Spruce Grove, receive, grade and handle the honey delivered by member producers. This Alberta co-op and its sister in Manitoba, market honey in Canadian and export markets.
    • In order to ship honey to the co-op, a producer must be a member and be able to ship at least 5,000 pounds of honey. Some members have a contract that requires all honey to be shipped to the co-op. Quota 88 holders have an established quota they must ship. Over production must be sold elsewhere.
    • The Alberta co-op uses a two-price system to determine payment to its members. Production up to a specific quota level is given one price with honey over the quota amount may be paid at a lower price.
    • Selling honey to a honey co-op offers the following advantages:
      • marketing expertise that an individual producer may not have or wish to develop
      • provision of free honey barrels to members
      • protection against non payment for honey
      • provision of a range of services including liability coverage and insurance against loss or damage to honey when it is shipped in co-op barrels
    • The limitations of selling honey to co-ops are:
      • payments for honey take longer than through other market channels
      • loss of control over the price
      • production is committed to the co-op
      • over quota production can only be sold to the co-op at a lower price
        Note: The Alberta Honey Co-op Ltd. gives Quota 88 producers the flexibility to market this over quota production in other markets
    • Honey packers are privately owned businesses who purchase honey from producers and resell it in either domestic or export markets.
    • Selling honey to a honey packer offers the following advantages:
      • full payment for honey within a few months of delivery
      • honey is purchased in barrels, thus eliminating the need for producers to repackage their honey
      • opportunity to negotiate freight costs, payment terms and delivery dates
      • opportunity for producers to develop long term markets for their honey
    • There are limitations to selling honey to private packers. Producers must supply their own barrels or arrange for return of their barrels from the packer. As a result, producers must consider the cost of barrels and freight. There is also the risk that a packer may not be able to pay a producer for their honey or the terms of the sale may be changed.
    • Alberta producers can sell their honey in foreign markets either directly or through honey agents. Selling into the export market may increase returns to producers by receiving a premium price for their honey paid at the farm gate.
    • Producers considering selling into the export market require a high level of knowledge and skills, together with the ability to deal with an increased level of paperwork. Because of the distances involved, any problems that arise can be expensive and difficult to sort out.
    • Honey producers who sell to packers or into the export market may be exposed to increased risk of non-payment for their honey. In addition to ensuring they are dealing with a reputable buyer, producers may want to diversify and deal with a number of buyers.
    • A detailed overview of the many issues associated with exporting honey is available in Exporting Honey , Module 10, in the Agricultural Marketing Manual, published by Alberta Agriculture, Food and Rural Development in March 1995.
    • Market potential for honey and its by-products is expanding in the medicinal and cosmetic industries as a result of growing interest in natural ingredients.
    • A growing market opportunity is honey with the essence of a specific wild flower, herb or special crop. These products are in demand for their nutritional, culinary and medicinal properties.
    • New Zealand is a leader in honey related agri-toursim and direct marketing honey and its products. There is potential for expansion in Alberta.
    • Wax sales contribute revenues of $10 per hive or more for Alberta beekeepers. Generally, wax prices will rise and fall with honey prices.
    • An alternative market for a limited number of Alberta beekeepers is providing bee colonies to ensure pollination of crops including hybrid canola, borage, alfalfa and clover. The beekeepers are paid on a per hive basis for providing the service. Beekeepers must be prepared to respond to the demands of the crop owner with respect to the moving hives. Beekeepers have found that hives committed to this pollination produce substantially reduced honey crops. Revenue is mostly generated from renting beehives. In 1999, there were over 80,000 pollinating hives in Alberta.
    • The critical marketing issues for Alberta beekeepers are:
      • ability to identify the specific markets for Alberta honey products
      • careful assessment of the supply and the demand characteristics for these markets in order to determine the prices available for honey
      • determining the various activities and costs required to gain access to various domestic markets and export markets
      • determining the knowledge and skills required to market honey into the various markets
      Production Basics
      • New entrants to honey production must be prepared to study both existing operations and published material in order to gain information that will assist them in establishing their enterprise.
      • Beekeeping practices are best learned by working with an experienced beekeeper. Only through hands-on experience can new entrants gain the basic skills required for opening hives, removing frames, identifying queens, recognizing the difference between brood and honey cappings, and recognizing the difference between honey and pollen in a cell.
      • Producers must be familiar with the nectar flows of various crops and the impact weather will have on these flows. The nectar is collected by the bees and used to produce honey for the hive. Generally, there are three nectar flows on the Prairies. The spring flow is left for the bees to build up the hive. The main flow generally occurs from the end of June to the end of July. This flow produces the surplus honey that is harvested by beekeepers. The fall flow is generally left for the bees to build up for over wintering.
      • Plants that are considered major nectar producing plants in Alberta include dandelions, canola, clovers, sanfoin, alfalfa and, to a lesser extent, sunflower and faba beans.
      • Prior to 1988, most Alberta beekeepers were dependent on package bees imported from the United States. On December 31, 1987 the Canada - U.S. border was closed to package bee imports. As a result, most beekeepers responded by overwintering hives to produce their own supply of bees for the next year.
      • Beekeepers require a fundamental understanding of honey bee behavior.
        • Bees are social animals. The basis of this social behavior is the transferring of food as well as pheremones from individual bee to individual bee throughout the hive.
        • The honey bee colony is a family consisting of a single mother (the queen), many daughters (the workers) and a varying number of sons (the drones).
        • The bee colony perpetuates itself through successive cycles of brood rearing.12
        • A shortage of honey, pollen or water will lead to a reduction or even a stoppage of brood rearing activities.
      • The key resource requirements for commercial honey operations are location and equipment.
      • Location is important. A honey operation requires long-term access to productive beeyards, as well as labor and room for expansion.
      • Important considerations for establishing beeyards are:
        • they shouldn't be located near private residences or hamper others from using near by land for recreation
        • there should be access to an abundant supply of nectar-secreting and pollen bearing plants
        • there should be protection from predators, vandals and the elements
        • there should be an acceptable distance from the honey house and the beeyards of other beekeepers
        • they should be accessible in all types of weather
      • Basic honey production equipment includes structures for the bees and equipment for the processing and transportation of the honey.
        • Hives provide an environment similar to those bees would seek in nature in order to build wax combs consisting of hexagonal cells that are used for brood rearing as well as storing pollen and honey. The boxes that make up bee hives are known as supers. They should be a standard length and width so you can exchange supers from hive to hive. This will also produce a higher resale value. Each hive will require a bottom board as well as a cover.
        • The hexagonal wax cells are enclosed by frames that can be moved from super to super. Depending on the needs of the beekeeper, a standard super may have 8, 9, or ten frames.
        • Dark colored combs are preferred by the queen for egg-laying while light colored combs are used for storing honey. Generally, two brood chambers (supers) and three to five honey supers are required per hive.
        • Feeders are required for supplementary feeding during spring and fall. When feeding sugar, it must be mixed, taken to the hives and distributed. This involves some kind of tank and mixing system. Most beekeepers place a tank and pump on a trailer behind a truck.
        • Smokers and hive tools are required for working the beehives. Coveralls, a helmet and a veil are required for protection from bees when working the beehives.
        • Extracting equipment includes an uncapper, an extractor, pumps and a storage tank. A key management consideration for extracting equipment is matched to the size of the operation, the facilities and the available labor.
        • Additional equipment includes carts, pallets or forklifts for moving hives. Scales, a pressure washer and wax handing equipment are also needed.
        • A honey house is required to provide a loading area, hot room, extracting area and storage area.
        • Trucks equipped with flat decks or trailers are required for hauling supers and honey.
      • Generally, the production process for a commercial honey enterprise begins with wintered hives or purchased bees in the spring. The critical production activities during the year are as follows:
        • feeding the hive until nectar and pollen becomes available
        • providing medication treatments to ensure diseases don't become established
        • managing the hive to control swarming and replacing winter losses
        • managing the hive during the honey flow
        • extracting the honey
        • preparing the hives for winter
        • managing the hives during the winter period if indoor wintering is used
      • Beekeeping operations have a high labor requirement. In most enterprises, the owner operator needs to determine labor requirements, recruit the best possible individuals, provide the necessary training and provide effective supervision for the employees.
      • A high quality product is essential for every honey operation. Managing key factors in the extraction process will affect honey quality.
        • Excessive heat during extraction will darken the honey. Certain export markets have minimum standards for diastase (an enzyme which can be destroyed by heat) and the level of sugar breakdown due to heat. To prevent heat damage to honey, producers need to carefully manage the wax melting process and pay attention to storage conditions.
        • The process of extraction introduces air, bee parts and beeswax. These impurities cause the honey to granulate more readily. Management practices to reduce natural impurities focus on developing an extraction process that removes wax and bee parts, and reduces the amount of air incorporated into the honey.
        • Excessive moisture in honey may cause it to ferment. Furthermore, honey is hygroscope, meaning it will take on moisture from the surrounding air. Although very dry honey is not likely to ferment, it will become very hard when granulated. Pasteurizing will kill the natural yeasts in honey and thus prevent fermentation.13 However, pasteurization isn't a feasible practice for many beekeepers.
        • Crystallization is the process of granulating. Consumers have accepted finely granulated honey, but find a coarsely granulated product to be unsatisfactory. Crystallization is generally managed through proper storage temperatures.
      • A critical production management issue for new entrants to honey production is recognizing their limitations with respect to the size of honey operation they can comfortably handle.

      Economic/Finance Basics
      • New entrants to the honey industry must carefully assess the profitability and cash flow implications of their proposed operation.
      • Detailed economic information for honey production in Alberta is available through the Economics of Honey Production in Alberta 2000.14 The economic data provided in this publication is based on a survey of 24 beekeepers located throughout Alberta.
      • Table No. 7 presents a summary of production costs and returns originally presented in the above publication.


        Table No. 7 1999 Honey Production Costs and Returns (per hive) by Size of Operation
        Up to 600 Hives
        $/Hive
        601 to 1,000 Hives
        $/Hive
        Over 1,000 Hives
        $/Hive
        A
        1Bulk honey sales
        88.39
        54.29
        60.22
        2Bulk honey inventory
        0.00
        24.00
        11.27
        3Consumer pack sales
        12.00
        10.66
        .04
        4Consumer pack inventory
        1.59
        60.23
        30.86
        5Other honey sales
        .72
        .34
        .29
        6Wax/pollen/other sales
        2.82
        3.89
        4.59
        7Crop insurance receipts
        0.00
        2.75
        0.00
        8Miscellaneous receipts
        0.00
        0.00
        .15
        9Less - honey purchase for resale
        0.00
        .19
        0.00
        Value of Production
        $105.53
        $156.35
        $107.43
        B
        1Bee purchases - package bees
        0.00
        1.16
        8.15
        2Bee purchases - queens
        2.22
        3.35
        2.98
        3Freight & trucking
        2.49
        1.19
        .45
        4Feed - sugar
        5.15
        12.79
        10.58
        5Medicinal sugar/bee repellent
        3.77
        2.44
        3.83
        6Product & crop insurance
        .01
        .29
        .35
        7Fuel
        6.90
        6.60
        1.76
        8Repairs - machine
        11.47
        8.49
        3.77
        9Repairs - buildings & improvements
        7.63
        4.22
        1.63
        10Utilities & heating fuel
        7.36
        4.96
        1.62
        11Custom work & machine rental
        .03
        3.78
        2.02
        12Assoc. dues, prof. fees, promotion & travel
        3.48
        4.69
        1.73
        13Small tools, supplies & miscellaneous expenses
        11.11
        7.49
        8.87
        14Operating interest
        .30
        2.37
        1.76
        15Paid labour & benefits
        3.23
        20.81
        17.65
        16Unpaid labour
        35.39
        19.58
        12.77
        Variable Costs
        $100.55
        $104.21
        $79.93
        C
        1Land rent/lease, building rent & forage access
        .96
        .66
        .71
        2Taxes, licences & general insurance
        10.32
        5.35
        3.29
        3Equipment & building (a) depreciation
        30.02
        36.67
        28.69
        (b) lease payments
        .26
        0.00
        0.00
        4Paid capital interest
        10.42
        9.68
        1.71
        Total Capital Costs
        $51.98
        $52.37
        $34.41
        D
        Cash costs(B + C - B16 - C3a)
        87.41
        100.33
        72.88
        E
        Total production costs(B + C)
        152.53
        156.58
        114.33
        F
        Gross Margin(A - D)
        18.41
        56.02
        34.55
        Return to Unpaid Labour(A - E + B16)
        (11.61)
        19.35
        5.86
        Return to Investment(A - E + C4)
        (36.59)
        9.46
        (5.20)
        Return to Equity(A - E)
        (47.01)
        (.23)
        (6.91)
        Management
        Number of hives
        277.00
        794.00
        2,567.60
        Average yield per hive (lbs.)
        131.33
        194.19
        136.46
        Honey produced (lbs.)
        36,379.17
        185.20
        50,371.80
      • The following budgets assess the investment and operating requirements for a commercial operation of 794 hives. For more financial information refer to the Economics of Honey Production in Alberta 2000.
      • These budgets provide producers with a framework that identifies the type of information required and the types of analyses required to assess the viability of a proposed operation.
      • Table No. 8 describes the capital investment required to acquire the land, equipment and facilities needed to establish a 800 hive operation. Also included in this budget are estimates of depreciation and interest (opportunity) cost of capital.
      • Table No. 9 provides estimates of the revenues, costs and returns from operating the proposed 800 hive operation.


        Table No. 8 Honey Production Enterprise Investment, Alberta by Size of Operation (600 - 1,000 Hives) 1999
        Investment Summary
        Total $
        $/Hive
        Land7.00 acres
        4,625.00
        5.82
        Buildings
        62,540.00
        78.77
        Bee equipment
        208,737.60
        262.89
        Machinery
        37,435.00
        47.15
        Total Investment
        313,337.60
        394.63
        Investment Detail
        Enterprise Value
        ($)
        Age
        (years)
        Depreciation
        ($)
        Land
        4,625.00
        Honey house
        35,880.00
        16.80
        1,794.00
        Wintering shed
        4,800.00
        .40
        240.00
        Houses (25%)
        4,900.00
        19.35
        245.00
        Other buildings
        16,960.00
        12.16
        848.00
        Buildings Sub-total
        62,540.00
        3,127.00
        Hives
        143,200.00
        24.20
        16,468.00
        Pallets
        3,030.00
        14.20
        348.45
        Fork lift
        8,500.00
        0.00
        680.00
        Hive feeders
        3,640.00
        12.00
        418.60
        Super elevator
        0.00
        0.00
        0.00
        Uncapping machines
        3,900.00
        10.40
        312.00
        Honey extractor
        4,100.00
        16.40
        328.00
        Dryer/heat exchanger
        0.00
        0.00
        0.00
        Wax spinner/separator
        1,480.00
        10.80
        118.40
        Honey tank & pipe
        5,620.00
        13.20
        646.30
        Feed tank
        2,500.00
        6.66
        287.50
        Storage vessel
        0.00
        0.00
        0.00
        Boiler furnace
        600.00
        10.00
        48.00
        Water system
        0.00
        0.00
        0.00
        Compressor
        350.00
        4.20
        28.00
        Pressure washer
        359.00
        4.60
        28.72
        Fuel tank
        0.00
        0.00
        0.00
        Scales
        636.00
        15.80
        73.14
        Barrels
        2,069.40
        1.40
        237.98
        Barrel loader
        0.00
        0.00
        0.00
        Carts
        450.00
        15.00
        51.75
        Fencers/shockers
        703.20
        8.62
        80.87
        Shop tools
        7,700.00
        6.00
        885.50
        Staplers
        662.00
        1.40
        76.13
        Office equipment
        0.00
        0.00
        0.00
        Lawn mover
        1,780.00
        5.20
        142.40
        Over-wintering equipment
        2,965.00
        3.20
        340.98
        Miscellaneous equipment
        14,493.00
        12.06
        1,330.90
        Equipment Sub-total
        208,737.60
        22,931.62
        Trucks
        26,620.00
        11.21
        1,889.60
        Tractors
        3,800.00
        10.20
        304.00
        Other machinery
        10,015.00
        8.86
        651.60
        Power Equipment Sub-total
        37,435.00
        2,845.20
        Total Investment
        313,337.60
        28,903.82


        Table No. 9 Honey Production Costs and Returns, Alberta by Size of Operation (600 - 1,000 Hives) 1999
        Total $
        $/Hive
        $/Lb.
        A
        1
        Bulk honey sales5,5096.00 lbs
        43,102.90
        54.29
        .28
        2
        Bulk honey inventory27,395.20 lbs
        19,053.89
        24.00
        3
        Consumer pack sales4,780.00 lbs
        8,466.00
        10.66
        4
        Consumer pack inventory66,372.00 lbs
        47,822.14
        60.23
        5
        Other honey sales542.00 lbs
        271.00
        .34
        6
        Wax/pollen/other sales1,034.00 lbs
        3,091.50
        3.89
        7
        Crop insurance receipts
        2,185.20
        2.75
        8
        Miscellaneous receipts
        0.00
        0.00
        9
        Less - honey purchase for resale
        150.00
        .19
        Value of Production
        124,142.63
        156.35
        .81
        B
        1
        Bee purchases - package bees
        925.00
        1.16
        2
        Bee purchases - queens
        2,656.40
        3.35
        3
        Freight & trucking
        947.60
        1.19
        4
        Feed - sugar
        10,159.00
        12.79
        5
        Medicinal sugar/bee repellent
        1,939.00
        2.44
        6
        Product & crop insurance
        228.80
        .29
        7
        Fuel
        5,239.00
        6.60
        8
        Repairs - machine
        6,744.40
        8.49
        9
        Repairs - buildings & improvements
        3,349.93
        4.22
        10
        Utilities & heating fuel
        3,940.40
        4.96
        11
        Custom work & machine rental
        2,997.40
        3.78
        12
        Assoc. dues, prof. fees, promotion & travel
        3,721.20
        4.69
        13
        Small tools, supplies & miscellaneous expenses
        5,944.80
        7.49
        14
        Operating interest
        1,881.98
        2.37
        15
        Paid labour & benefits1,659.80 hours
        16,523.80
        20.81
        16
        Unpaid labour1,480.60 hours
        15,546.30
        19.58
        Variable Costs
        82,745.00
        104.21
        .54
        C
        1
        Land rent/lease, building rent & forage access
        525.00
        .66
        2
        Taxes, licences & general insurance
        4,245.60
        5.35
        3
        Equipment & building(a) depreciation
        29,118.87
        36.37
        (b) lease payments
        0.00
        0.00
        4
        Paid capital interest
        7,689.48
        9.68
        Total Capital Costs
        41,578.95
        52.37
        .27
        D
        Cash costs(B + C - B16 - C3a)
        79,658.78
        100.33
        .52
        E
        Total production costs(B + C)
        124,323.95
        156.58
        .81
        F
        Gross Margin(A - D)
        44,483.85
        56.02
        .29
        Return to Unpaid Labour(A - E + B16)
        15,364.98
        19.35
        .10
        Return to Investment(A - E + C4) 2.4%
        7,508.15
        9.46
        .05
        Return to Equity(A - E)
        (181.32)
        (.23)
        (.00)
        Management
        Number of hives
        794.00
        Average yield per hive (lbs.)
        194.19
        Honey produced (lbs.)
        154,185.20


      • Table No. 10 presents the capital required to establish a pollination production enterprise. Table No. 11 presents estimates of revenues, costs and returns for this operation. These figures are based on averages from eight beekeepers who rented their hives for pollination purposes in 1999. Note that almost 85 per cent of the income for this group was generated from renting bee hives for pollination purposes. The balance of the income was received from honey sales, wax and pollen and miscellaneous receipts.


        Table No. 10 Pollination Production Enterprise Investment, Alberta 1999
        Investment Summary
        Total $
        $/Hive
        Land
        11.38 acres
        5,370.63
        1.37
        Buildings
        171,720.31
        43.68
        Bee equipment
        946,259.00
        240.70
        Machinery
        142,837.50
        36.33
        Total Investment
        1,266,187.44
        322.08
        Investment Detail
        Enterprise Value
        ($)
        Age
        (years)
        Depreciation
        ($)
        Land
        5,370.63
        Honey house
        85,000.00
        16.13
        4,250.00
        Wintering shed
        0.00
        0.00
        0.00
        Houses (25%)
        10,851.56
        24.50
        542.58
        Other buildings
        75,868.75
        10.00
        3,793.44
        Buildings Sub-total
        171,720.31
        8,586.02
        Hives
        751,616.50
        6.17
        86,435.90
        Pallets
        33,359.38
        6.25
        3,836.33
        Fork lift
        10,250.00
        0.00
        820.00
        Hive feeders
        7,087.50
        4.38
        815.06
        Super elevator
        0.00
        0.00
        0.00
        Uncapping machines
        2,500.00
        8.00
        200.00
        Honey extractor
        18,937.50
        6.00
        1,515.00
        Dryer/heat exchanger
        1,133.13
        2.50
        90.65
        Wax spinner/separator
        3,750.00
        5.50
        300.00
        Honey tank & pipe
        3,950.00
        13.59
        454.25
        Feed tank
        4,175.00
        6.88
        480.13
        Storage vessel
        0.00
        0.00
        0.00
        Boiler furnace
        1,537.50
        6.88
        123.00
        Water system
        0.00
        0.00
        0.00
        Compressor
        1,081.25
        10.50
        86.50
        Pressure washer
        1,549.38
        3.38
        123.95
        Fuel tank
        0.00
        0.00
        0.00
        Scales
        2,393.75
        8.75
        275.28
        Barrels
        3,962.50
        3.25
        455.69
        Barrel loader
        0.00
        0.00
        0.00
        Carts
        812.50
        6.50
        93.44
        Fencers/shockers
        25.00
        2.50
        2.88
        Shop tools
        12,500.00
        3.25
        1,437.50
        Staplers
        647.50
        2.50
        74.46
        Office equipment
        250.00
        0.00
        20.00
        Lawn mover
        1,400.00
        4.13
        112.00
        Over-wintering equipment
        17,015.63
        2.50
        1,956.80
        Miscellaneous equipment
        66,325.00
        6.44
        5,337.06
        Equipment Sub-total
        946,259.00
        105,045.87
        Trucks
        125,037.50
        7.05
        10,003.00
        Tractors
        0.00
        0.00
        0.00
        Other machinery
        17,800.00
        7.07
        1,277.00
        Power Equipment Sub-total
        142,837.50
        11,280.00
        Total Investment
        1,266,187.44
        124,911.88


        Table No. 11 Pollination Production Costs and Returns, Alberta 1999
        Total $
        $/Hive
        $/Lb.
        A
        1
        Bulk honey sales122,812.50 lbs
        89,825.00
        22.85
        .44
        2
        Bulk honey inventory0.00 lbs
        0.00
        0.00
        3
        Consumer pack sales3,875.00 lbs
        4,062.50
        1.03
        4
        Consumer pack inventory72,000.00 lbs
        51,087.50
        13.00
        5
        Other honey sales3,917.63 lbs
        2,820.69
        .72
        6
        Wax/pollen/other sales6,045.63 lbs
        11,136.88
        2.83
        7
        Crop insurance receipts
        0.00
        0.00
        8
        Miscellaneous receipts
        244.63
        .06
        9
        Less - honey purchase for resale
        184.63
        .05
        10
        Hive rental - pollination
        352,968.75
        110.52
        Value of Production
        512,330.57
        130.32
        2.53
        B
        1
        Bee purchases - package bees
        59,871.00
        15.23
        2
        Bee purchases - queens
        15,677.69
        3.99
        3
        Freight & trucking
        4,612.25
        1.17
        4
        Feed - sugar
        45,088.32
        11.47
        5
        Medicinal sugar/bee repellent
        11,089.00
        2.82
        6
        Product & crop insurance
        211.00
        .05
        7
        Fuel
        12,460.75
        3.17
        8
        Repairs - machine
        16,250.88
        4.13
        9
        Repairs - buildings & improvements
        5,916.63
        1.51
        10
        Utilities & heating fuel
        7,556.50
        1.92
        11
        Custom work & machine rental
        5,137.13
        1.31
        12
        Assoc. dues, prof. fees, promotion & travel
        10,587.000
        2.69
        13
        Small tools, supplies & miscellaneous expenses
        28,326.50
        7.21
        14
        Operating interest
        4,086.88
        1.04
        15
        Paid labour & benefits12,987.93 hours
        135,031.70
        34.35
        16
        Unpaid labour2,978.25
        31,271.63
        7.95
        Variable Costs
        393,174.83
        100.01
        1.94
        C
        1
        Land rent/lease, building rent & forage access
        3,431.25
        .87
        2
        Taxes, licences & general insurance
        9,831.38
        2.50
        3
        Equipment & building(a) depreciation
        125,131.94
        31.83
        (b) lease payments
        0.00
        0.00
        4
        Paid capital interest
        33,140.50
        8.43
        Total Capital Costs
        171,535.07
        43.63
        .85
        D
        Cash costs(B + C - B16 - C3a)
        408,306.33
        103.86
        2.02
        E
        Total production costs(B + C)
        564,709.90
        143.65
        2.79
        F
        Gross Margin(A - D)
        104,024.23
        26.46
        .51
        Return to Unpaid Labour(A - E + B16)
        (21,107.71)
        (5.37)
        (.10)
        Return to Investment(A - E + C4) -1.5%
        (19,238.83)
        (4.89)
        (.09)
        Return to Equity(A - E)
        (52,379.33)
        (13.32)
        (.26)
        Management
        Number of hives
        3,931.25
        Average yield per hive (lbs.)
        51.54
        Honey produced (lbs.)
        202,605.13

      • The long-term viability of a honey operation will depend on:
        • achieving an acceptable level of production
        • managing operating costs
        • achieving acceptable market prices for product
      • In terms of financing, conventional lenders, such as banks, may not be familiar with honey enterprises. In order to acquire the capital needed to develop an enterprise, individual managers will be required to have:
        • a solid business plan complete with marketing plan
        • high levels of equity capital to put into the venture
        • access to capital from private sources such as family and friends
        • a sound production process
        Resources

        Industry associations
        Alberta Beekeepers Association
        #102, 11434 - 168 Street
        Edmonton, Alberta T5M 3T9
        Phone: (780) 489-6949
        E-mail: honeybee@albertabeekeepers.org

        Canadian Honey Council
        236, 234 - 5149 Country Hills Blvd. NW
        Calgary, Alberta T3A 5K8
        Phone: (403) 208-7141
        Fax: (403) 547-4317
        E-mail: chc-ccm@telusplanet.net

        Central Alberta Beekeepers Association
        Phone: (403) 782-6025

        Calgary and District Beekeepers Association
        Phone: (403) 932-4204

        Edmonton and District Beekeepers Association
        Phone: (403) 362-3951

        Southern Alberta Beekeepers Association
        Phone: (403) 223-8784

        Peace River Beekeepers Association
        Phone: (780) 323-4283

        Publications
        Alberta Bee News
        Published by the Alberta Beekeepers Association

        The Economics of Honey Production, Alberta
        by G. Nabi Chaudhary, Economics Unit
        Alberta Agriculture, Food and Rural Development
        September 2000

        Websites
        Alberta Agriculture, Food and Rural Development
        www.agric.gov.ab.ca/

        All About Canada's Honey Industry
        Agriculture and Agri-Food Canada

        FAO Agriculture Services Bulletin Beekeeping
        www.beekeeping.com/index_us.htm

        Government Resources
        Production and Marketing- Provincial Apiculturist
        Crop Diversification Centre North
        Alberta Agriculture Food and Rural Development
        Phone: (780) 422-1789
        Fax: (780) 422-6096
        E-mail: kenn.tuckey@gov.ab.ca

        Apiculturist
        Alberta Agriculture, Food and Rural Development
        Falher, Alberta
        Phone: (780) 837-2211
        Fax: (780) 837-8228
        E-mail: douglas.colter@gov.ab.ca

        Business Planning- Rural Development Specialists - Business; contact your local
        Alberta Agriculture, Food and Rural Development district office.

        Economics- Farm Management Specialists; contact your local Alberta
        Agriculture, Food and Rural Development district office.
        Economics Unit
        Economic and Competitiveness
        Alberta Agriculture Food and Rural Development
        Phone: (780) 422-4054

        Regulatory- Honey Export Regulations
        Canadian Food Inspection Agency
        Agri-Food Product Program
        Phone: (403) 292-5867
        Website: www.cfia-acia.agr.ca
        Regulation: laws.justice.gc.ca/en/C-0.4/C.R.C.-c.287/index.html

        Bee IMport Licensing
        Canadian Food Inspection Agency
        Animal Health Program
        Phone: (403) 292-5825
        Website: www.cfia-acia.agr.ca
        Import Permit Application Form: www.inspection.gc.ca/english/anima/heasan/import/permit_covere.shtml

        Key Management Issues

        • If you continue to investigate honey production as an agricultural business opportunity, it's essential that you are able to answer the following questions concerning the honey industry and the management requirements of an honey enterprise.
        • Have you identified specific markets for your honey?
        • Have you clearly defined the marketing activities that you will be required to perform to market your product to specific markets?
        • Have you clearly defined the production process and the production resources that you will require in addition to the production costs you will incur to produce honey and market it to specific markets?
        • Are you aware of the amount of time you will be required to devote to continuously researching your markets and to adjusting your production activities to best meet the needs of the market?
        • Are you aware of the amount of time required to manage the production activities of a commercial honey operation?
        • Are you aware of the key performance factors and the level of performance needed in order for your business to be economically viable?
        • Have you assessed your level of passion and commitment to working with bees on a regular basis?
          Footnotes

          1.All About Canada’s Honey Industry; Agriculture and Agri-Food Canada factsheet.
          2.All About Canada’s Honey Industry; Agriculture and Agri-Food Canada factsheet.
          3.The Economics of Honey Production; by G. Nabi Chaudhary, Economics Unit, Alberta Agriculture, Food and Rural Development, September 2000; p.4.
          4.The Alberta Bee Act requires all person who own or have in their possession bees or used beekeeping equipment to register annually with the Provincial Apiculturist. These registration numbers will also include owners of equipment who are not active in honey production.
          5.All About Canada’s Honey Industry; Agriculture and Agri-Food Canada factsheet.
          6.Source Statistics Canada, prepared by Statistics and Data Development Unit, Alberta Agriculture, Food and Rural Developement.
          7.Honey imports, exports and interprovincial trade must comply with the Canadian Agricultural Products Act and the Canadian Honey Regulations.
          8.Up to date information concerning private labels for honey are available through the Retail Manufactured Foods, Canadian Food Inspection Agency, Room #205, 7000 - 113 Street Edmonton AB T6H 5T6; Phone (403) 495-3333.
          9.Honey Situation and Outlook in Selected Countries; presented in Sugar:World Markets and Trade, November 1995.
          10.This data was prepared by the Market Analysis and Statistics Branch of Alberta Agriculture, Food and Rural Development.
          11.Data collected by Provincial Apiculturist, Alberta Agriculture, Food and Rural Development.
          12.Brood is the immature or developing stages of bees including eggs, larvae and pupae.
          13.There are several different ways to pasteurize honey. One method is to heat the honey to 68 C for 5 minutes then cool very rapidly.
          14.The Economics of Honey Production; by G. Nabi Chaudhary, Economics Unit, Alberta Agriculture, Food and Rural Development, September 2000.

          Revised by:
          Lori-Jo Graham - Business Development Specialist
          Alberta Agriculture, Food and Rural Development

          Orginally Prepared by:
          Dennis Dey - Farm Management Consultant

          Technical Advisors:
          Kenn Tuckey - Provincial Apiculturist; Alberta Agriculture, Food and Rural Develpment
          Nabi Chaudhary - Senior Economic Analyst - Crops; Alberta Agriculture, Food and Rural Develpment
          Barrie Termeer - Past President; Alberta Beekeepers Association
          Eric Abell - Beekeeper

          Source: Agdex 616/830-1. Revised July 2001.

           
           
           
           
          For more information about the content of this document, contact Duke.
          This information published to the web on July 1, 2001.
          Last Reviewed/Revised on June 18, 2007.