Massive stockpiles of both mānuka and non-mānuka honey are the downside of a decade’s worth of double-digit growth as producers face the reality of disposing tonnes of product at severe discounts just to stay afloat.
Jane Lorimer, Waikato beekeeper and president of New Zealand Beekeeping Inc, said she expects to witness a lot of pain before any real gains come out of the industry’s current situation.
The country’s total stock of honey in storage is estimated to exceed one year’s entire production.
“There will be pain before we see any real gain, most definitely. There are people who came into the industry thinking they would make money relatively easily out of mānuka, only to find they now have to exit.”
Lower prices for blended and non-mānuka honeys have been prevalent for the past two years, but Lorimer said in the past six months mānuka is also feeling the sting of price pressure, particularly on the mid-range UMF mānuka grades.
Multi and mono-floral mānuka honey forms about 75% of NZ’s honey production, accounting for about 11,000t a year of exports.
Industry sources confirmed mānuka in the mid-range, which would have made $65-$85 a kg in 2018, is now struggling to make $25/kg. South Island mānuka of lower grade that used to fetch $36/kg is now down to $20/kg.
Lorimer said the entire sector is being challenged on what constitutes a sustainable production scale.
Bee researcher Dr Mark Goodwin has described NZ as being overstocked with bees, with total hive numbers peaking in 2019 at 900,000 – more than Australia has.
That total has now fallen to 800,000 in 2021 survey data, but is still double what it was 10 years ago.
Lorimer said she believes a more sustainable level is about 600,000 hives, and NZ’s current annual production of about 25,000t of honey is well in excess of the country’s ability to sell it in a timely manner.
“I estimate there is probably at least 14,000t of honey sitting in storage around NZ, and some estimate it could be as high as 35,000t.”
As a country, NZ consumes only 0.5kg per head a year, or 2500t.
“I understand a number of big corporates have dropped hive numbers and closed depots. There is going to continue to be a downward trend,” Goodwin said.
Cheltenham honey beekeeper and honey processor Jason Prior echoed Lorimer’s concerns about the sector’s immediate future.
He said blended and pasture type honeys had increased slightly from their lows of about $4/kg recently, to nearer $7/kg for clover honeys, but the brakes have been on production in the past year.
“We would normally have processed 100t, but only did 15t last year. People just stopped harvesting it.”
He said bank pressure on beekeepers and processors to move long-stored honey is ramping up as they seek working capital to kick off a new season with.
“I know of one beekeeper with 100t in storage and they have sold none of it.”
Retail prices in overseas markets remain firm, with distributors reporting solid sales in United States and United Kingdom.
“The issue is someone else is making the money. Brokers are not selling at a discount offshore, they know they can buy it from people here who have to sell it.
“There is mānuka honey with a 10 UMF rating selling for $22/kg, take it or leave it, and they have to take it.”
If storage temperatures are low enough honey can keep for years, but if not cooled adequately it can become suspect after only two to three years before a breach in quality levels renders it unsuitable for export to China and the European Union.
Prior said the impact on the sector has been worsened by a lack of focus on research and development. Lorimer acknowledged the industry’s failure to get a commodity levy over the line, but cited concerns over where the funds may have been focused if it had.
John Rawcliffe, spokesperson for the UMF Honey Association, said despite the challenges exporters have faced with covid and shipping, China, the US and UK all remain positive and growing.
But he acknowledged as an industry an adjustment to lower supply volumes is coming.
“During any boom a number of players have found it quite difficult when previously it may have been easy. Hives have dropped from 900,000 to an estimated 730,000 this year and will probably go lower still.”
