By Ray Hansen, content specialist,

By Ray Hansen, content specialist, AgMRC, Iowa State University, hansenr@iastate.edu.

Updated April 2012 by Malinda Geisler, AgMRC, Iowa State University.


Overview
According to USDA reports, 2.5 million honey-producing colonies in 2011 generated 148 million pounds of raw honey, down 16 percent from 2010. The states producing the most honey in 2011 were (in order): North Dakota, California, South Dakota, Florida and Montana. The average price for domestically produced honey was a record high $1.73 per pound, up 7 percent from 2010. For the most part, honey prices during 2011 were up in all color classes and in all markets. (NASS)

Demand
Individual consumers who purchase small amounts of honey for personal use contribute significantly to overall consumption in the United States. According to the National Honey Board, per capita consumption of honey in the United States is approximately 1.3 pounds per year.

The United States is one of the world’s largest markets for industrial honey. This sector accounts for approximately 45 percent of total domestic consumption. The primary users of industrial honey are bakery, health food and cereal manufacturers. Other users, such as the food service industry, account for another 10 percent of domestic consumption.

Because many foods such as fruits, vegetables and nuts (especially almonds) require pollination by bees, there is a growing demand to rent or sell bee colonies for improved pollination of these crops. From 2004 to 2007, the price of honeybees to pollinate California almonds jumped from $50 per colony to $150 per colony. Honeybee rental for commercial pollination is a viable component of the bee-keeping industry. For 2007, the average commercial beekeeper reported receiving 68 percent of his annual gross income from pollination rentals, which shows the importance of this income. The annual value of honeybee pollination to U.S. agriculture is estimated at over $15 billion, far exceeding the value of wax and honey sales.

Production
Raw honey production has consistently declined over the past decade, and prices have risen until large quantities of cheap, imported honey put pressure on domestic prices starting in 2000. Honey production peaked in 1987 with 227 million pounds. Since 2001, annual production has ranged from 150 to 185 million pounds of honey.

Some of this market shift can be attributed to the accidental introduction in the 1980s of two parasitic mites and the rise of Colony Collapse Disorder (CCD), which caused the die-off of more than 30 percent of U.S. commercial honeybee (Apis mellifera) colonies during the 2006/2007 and 2007/2008 winters. The disease is characterized by low numbers of adult bees but few signs of dead bees. Study of the numerous possible causes for CCD has led researchers to conclude that the disorder may be caused by many different factors, working in combination or synergistically. These factors may include a new parasite, diseases, management stresses and pesticides. (Congressional Research Service 2010)

To add value to the raw honey market, many beekeepers also prepare and market (1) wax products, such as candles, cosmetics and crafts, and (2) specialty honey products, such as pollen as a food supplement for bees and humans, and propolis and bee venom, which are being researched for their health benefits. About 3.9 million pounds of beeswax worth about $7 million are produced annually as a byproduct of the honey harvest.

Competitive Products
Inexpensive imported honey provides constant pressure on the domestic industry. Very low prices on honey imports from China have tightened margins for U.S. producers.

Honey is a natural sweetener and competes with traditional sugar cane and corn sweeteners, but its biggest competition comes from within the industry. There are over 300 different types of honey with varied colors, flavors and densities. These variations are attributed to the blossoms on the flora of the geographical area. Honey colors range from white to dark brown, and flavors vary from very mild to very bold. The USDA classifies honey into seven color categories and four quality classes based on a combination of flavor, clarity, absence of defects and moisture content.

Competitive Intensity
The bee-keeping industry is easily accessible; entry and exit from the industry is relatively easy.

The industry is segmented into three types of production: hobbyist, part-time and commercial. Hobby-sized operations are those with 25 colonies or less, hobbyists with less than 5 colonies are not included in the colonies reported by the USDA. Part-timers are those with 25 to 300 colonies, and commercial operations are those with over 300 colonies. Hobbyists and part-timers account for roughly 40 percent of the honey production, and 1,600 commercial beekeepers are responsible for the remaining 60 percent of production.

Approximately a dozen large commercial honey packers process over 50 percent of the domestically prepared commercial honey. The balance of the domestic production is processed, packaged and sold by smaller firms or individual beekeepers. With more than 300 members in more than 30 states, Sioux Honey Association is the leading packaging cooperative and processes approximately 40 million pounds of honey annually in their three locations. Sioux Honey markets its products globally under the following labels: Sue Bee, Clover Maid, Aunt Sue, Natural Pure and North American brands. Additional packers, wholesalers and distributors can be located on the “honey locator” furnished by the National Honey Board, which can be found at www.honeylocator.com.

Exports
According to USDA's FAS, the total value of U.S. honey exports in 2011 was $18.7 million, an increase of $4.9 million from the previous year. The leading markets for U.S. honey in 2011 were (in order by value): Israel, Yemen, Canada, Japan and South Korea.

Imports
To meet demand, the United States imported honey valued at $387.9 million in 2011, primarily from Argentina, India, Vietnam, Brazil and Canada.

Government Regulation
The bee-keeping industry falls under USDA regulatory control for grading of product.

The 2008 Farm Bill authorizes funding for research on CCD and other issues. It also stipulates that the honey's country of origin be indicated, enabling consumers to distinguish U.S. honey from imported honey. Other provisions in the Farm Bill support honey producers through the bill's crop insurance and permanent disaster assistance programs. For example, beekeepers who suffered honey production losses during the crop year may participate in the new Supplemental Revenue Assistance Payments (SURE) program. (Congressional Research Service 2010)

Since enactment of the 2008 Farm Bill, USDA has created the Emergency Assistance for Livestock, Honeybees, and Farm-Raised Fish Program (ELAP). This program, administered by USDA’s Farm Service Agency, provides disaster assistance for honey producers. (Congressional Research Service 2010)

Trends
Between 1947 and 2008, honeybee colony numbers nationwide declined from 5.9 million to 2.3 million. Colony shortages were so critical that in 2005 honeybees were imported from outside the United States for the first time in over 80 years. According to the 2007 Census of Agriculture (2009), however, the number of farms, number of bee colonies and pounds of honey collected all increased between 2002 and 2007.