Honey producers in Whanganui grapple with market oversupply

Apiculture NZ chief executive Karin Kos said a bumper crop in 2020 and sustained growth in the years before led to an oversupply of honey in New Zealand.

Beekeepers in Whanganui are choosing not to increase honey production in response to an oversupplied market.

Apiculture NZ chief executive Karin Kos said a bumper crop in 2020 and sustained growth in the years before led to an oversupply of honey in New Zealand.

Canaan Honey has been making and selling honey for 40 years, and owner Michael Brandon said despite his hard work selling his honey at markets and their store in Mosston Rd, after expenses he wasn’t earning minimum wage.

The business was stuck in a place where it could not increase revenue because of the saturated market, he said.

“The hope is we will sell some manuka [and the] hope is we will sell some beehives, but people are sitting on hundreds of tonnes of mānuka and people are selling up beehives or virtually giving them away ... so both those upsides are gone.”

He said Canaan had the right balance of beehives at the moment, selling everything it produced.

Canaan had the land and ability to go and produce more mānuka, but Brandon said he would struggle to sell it.

Despite it being a 40-year business with “intergenerational” customers, growth opportunities were drowned out in the present market, Brandon said.

Michael and Melissa Brandon, of Canaan Honey, at a market last year. Photo / NZME

“[We’ve] basically just broken even and that means lots of effort for nothing ... I’m worth more than that.”

Kai Iwi Honey apiarist Chris Valentine said his company was lucky to have a good buyer.

He had about eight or nine drums of honey stored up.

But his storage was also filled with 100 drums of other beekeepers’ honey — a symptom of the oversupply in the market.

“I’ve got mates that [have] got three to four years’ supply in their sheds.”

Selling was getting a little harder, and Valentine said a recent batch sold for less than it normally would.

Valentine said it did not make sense to increase hives and production at the moment.

“We just kind of stay static and just watch costs.”

Two bad production seasons could lead to the large stockpiles around the country being used more, Valentine said, therefore helping balance the supply and demand situation.

Kos said it’s estimated 27,000 tonnes of honey was produced in 2020 — well above the yearly average of 19,000.

There had been “sustained inflated growth” in the honey business from about 2012 to 2017, Kos said.

“Not just in production, but also in prices for all our honeys.

“It was unrealistic to sustain that.”

Now the industry was seeing a significant correction and it was hurting beekeepers big and small.

Kos said Apiculture NZ was now working on a strategic plan that focused on creating more sustained growth.

“The thing we tell our beekeepers [is] they’ve really got to talk to their buyers, talk to their banks. They need to understand what demand is going to be over the next year.”

Brandon said he would like to see a cooperative where beekeepers around the country joined forces to create a monopoly style business.

He said that would allow smaller players to get a “fair price that people can live on”, before devolving the monopoly into smaller large companies.

Production was down compared with the bumper 2020 crop. In the year ended June 2022, an estimated 22,000 tonnes of honey was produced.

The number of hives was dropping in response to the oversupply, Kos said, with a peak at 918,000 in 2019.

“It’s now sitting at 731,000 for the 2022 season,” Kos said.

The decline won’t stop there.

“We’re expecting that to drop to about 600,000 by the end of next year.”

Karin Kos said Apiculture NZ was now working on a strategic plan that focused on creating more sustained growth. Photo / NZME

Add to that the number of operators with between 1000 and 3000 hives had fallen by a third since 2019, Kos said.

“What it’s showing is there’s an adjustment going on.”

There was some drop in the prices for honey but demand, particularly for mānuka honey, remained strong.

Kos said the removal of honey tariffs in the European Union and United Kingdom markets would make New Zealand product more competitive, and the return of tourists here would also help increase demand.

Last week Māori agribusiness Ātihau-Whanganui Incorporation reported a loss in its apiary business, according to Local Democracy Reporting.

Ātihau chief executive Andrew Beijeman said sales were down due to the market oversupply of honey, despite a recent record production of 103 tonnes from the company’s 3600 hives.

“Put simply this is because, for a period of time, more honey has been produced than has been sold. There’s a lot sitting in sheds,” Beijeman said.

“This has resulted in a decrease in the price of honey and because we have some honey sitting in our shed unsold, we have revalued it and that took $2.7m out of our profit for this year.”

In response to this oversupply issue, the industry was going through a correction.

“At home, we’ve made the decision to pause the growth in our apiary business, and to leave numbers at what they were last year.”

Development of the apiary business would remain on hold until honey markets recover.