29 May 2024

Honey has a plan and is sticking to it

By Karin Kos, Chief Executive of Apiculture New Zealand 

Farmers Weekly’s front-page article last week would have readers believing the end is nigh for the New Zealand honey-producing industry. But that is far from the case.

That is not for a moment to deny the very real pain being felt by beekeepers around the country. The combination of high operating costs and honey prices below expectations have taken their toll on many.

Understandably, it is difficult in this environment to consider the significant opportunities that still lie in the NZ honey industry’s path.

NZ’s uniqueness in the world as a high-value honey producer in a relatively low-value global commodity honey market means there is still plenty to strive for.

Less than 0.1% of consumers in our potential export markets have an awareness of mānuka honey and its heralded properties. Other emerging food producing sectors would love to have that runway in front of them.

It’s not just looking to the medium and long term that should encourage some optimism.

Both exporters and businesses servicing the honey export sector are currently reporting the slowdown in their own operations that followed the initial covid spike in demand is finally turning around.

This is being borne out in recent export trends. Revenue from honey shipments for the year to April this year are up 15% on the same four months in 2023.

Not only that, but the value of our honey has started to rise again. The average price per kg for the first four months of 2024 was up 10% from 2023. We know that export price rises don’t necessarily trickle down to producers in real time. But some honey exporters are reporting they are paying 30% more for some lower value grades of honey than they did last year.

That said, there is no disputing the struggle that beekeepers have been experiencing over successive seasons.

A confluence of challenges emerged in the immediate post-covid years that made beekeeping a more difficult financial proposition than it had been during the years when overseas demand for mānuka honey was escalating beyond expectations.

Many of these impositions have been shared by producers of other NZ food exports, including a rapid rise in input costs that in many cases exceeded the trajectory of returns.

For honey producers, the sharp increase in costs came at a time when the industry’s successive years of over-production (the volume of honey harvested in NZ far exceeding the demand from both domestic and overseas consumers) was inevitably matched with a significant tailing off of demand for honey, with so much already stored, harvested across multiple seasons.

In response, the sector has understandably been downsizing. It’s always easy to make in hindsight, but the reality is the sector expansion was unchecked, with producer prices rising sharply in the 2010s and attracting a whole new cohort of beekeepers.

Other primary sectors have experienced similar bursts of growth in the past, driven by such favourable pricing incentives. The downsizing has been painful for many, and there is nothing to be gained from saying “told you so” when people are trying to manage an exit in circumstances of financial hardship.

At the same time, there is a responsibility among those still managing to operate successfully, and the industry’s nominated leadership to understand how an unchecked cycle of expansion and contraction can be prevented again, and ultimately work out how the industry can grow sustainably, so businesses at all levels of the NZ honey supply chain can confidently invest in its future.

Industry-good body Apiculture New Zealand recognised the need for a plan to better manage the sector growth several years ago and commenced a project, with funding support from the Ministry for Primary Industries and the honey industry, to develop a strategy to  future-proof NZ apiculture.

After consultation with industry participants throughout the country and input from experts who had contributed to turnarounds in other sectors, the New Zealand Honey Strategy 2024-2030 was published in February this year.

One of the key recommendations is for the sector to do better at working together and leading with a strong voice. To date the apiculture sector has not been optimally aligned, and to some extent the advent of the unchecked production was due to different parts of the supply-chain not communicating effectively with each other in a timely way.

That’s a priority being addressed in the work programme, as is bee health and biosecurity, critical to support the farming and horticultural sectors with pollination services.

We know it will take time for a turnaround to occur and that the sleepless nights being experienced by beekeepers over their viability won’t disappear straight away. However, there is a strong will, a solid plan and industry investment in building a sustainable future for the apiculture sector.