Honey Update:

April 2009

Drought seems to be the major factor in an ongoing struggle to increase
world raw honey supply. Severe droughts in South America and China
dramatically reduced their last honey crops, and we are starting off the
2009 honey crop in the U.S. with drought issues in California, reducing
their crop projections. The orange blossom honey crop is very poor.

A good honey crop in India helped to stabilize prices somewhat, but the
heavy demand for all raw honey on the world market has kept prices strong.
World demand for honey remains strong, especially for industrial type honey.
Even the world wide economic crisis has not yet weakened demand. Many honey
producers throughout the world are holding honey off the market for better
prices. U.S consumption is still strong as we continue to consume over
twice as much honey as we produce in this country

Europe continues to buy aggressively, and the U.S. dollar is again weakening
against other world currencies, making it more difficult for U.S. Packers to
compete for this honey.

Unfortunately, the only favorably priced honey in the market seems to be of
Chinese origin, either sold as Chinese honey or as a "packer's blend", or
circumvented through a 3rd country to avoid duties or hide adulteration.
With contamination and adulteration issues still prevalent with Chinese
honey, U.S. regulatory agencies are trying to crack down on mislabeled or
transshipped Chinese honey.

While there are still reports of Colony Collapse Disorder, it has not been a
major factor in raw honey pricing. Beekeepers still bear the brunt of the
expense to rebuild their hives, but these costs can only be passed on to
packers if world prices remain strong.

The projection for pricing through the rest of 2009 and into 2010 is that
prices will remain strong, but may be more stable than last year.

January 2009

Sioux Honey is reporting to us that they believe that there are still some
substantial price differences between legitimate honey in the world market
and honey that is highly questionable (adulterated, contaminated,
circumvented through a 3rd country). Sorting out the good from the bad can
be very difficult (costly & time consuming). Sioux is still leading the
industry with their testing, and they continue to reject any honey that
does not meet their stringent standards.

The raw honey market has been very fickle in the last few months as honey
producers throughout the world try to determine what effect the world wide
economic crisis will have on honey consumption. Prices started to soften,
then quickly firmed up because demand has not fallen off. Additionally
there appears to be more evidence of lower priced Chinese honey entering the
U.S. market transshipped through a 3rd country

Colony Collapse Disorder is still a real issue. Sioux has received reports
of some beekeepers losing up to half their colonies. More CCD reports will
probably start coming in as beekeepers prepare to move their bees into the
almond groves in California for pollination. The time period from now
through March is when we they get the best indications of how bad CCD will
be this year.

U.S consumption is still strong as we continue to consume over twice as much
honey as we produce in this country. Final numbers for the 2008 U.S. honey
crop are not in yet, but the crop was considerably better than last year.
Prices for U.S. honey were very strong as the crop came in, but we did see
some softening of those prices over the last couple months, again as
uncertainty in the economy grows

The strength of the U.S. dollar against the Euro is a factor that has helped
the U.S. to compete for some of the honey in the world market. Over the last
year, the weakened U.S. dollar had put them at a huge disadvantage competing
against Europe for the same honey. That exchange rate has fluctuated over
the last months, and most believe are now in a better position to bid for
raw honey in the world market.

Europe, whose insatiable appetite for honey has slowed a little, still is a
major factor in world honey market pricing. They continue to shy away from
Chinese and other Asian honey as they concentrate on South American honey
that is just entering the market. Much of South America is under extreme
drought conditions. Argentina has been especially hard hit, and their honey
crop projections are dismal (possibly half their normal crop).

Even with raw honey crop shortages in South America and demand for this
honey remaining strong, prices could stabilize at slightly lower prices
going into the 2nd quarter of 2009.

December 2008

A Below is a detailed and comprehensive Honey Market Report by Ron Phipps
CPNA International, Ltd. This report covers the factors that are driving
the pricing in the raw honey market. It discusses the widening price spread
between legitimate honey on the world market and suspect honey that is
entering the world market. The suspect honey is suspect in it's origin and
also it's quality. Adulteration (or even contamination) and circumvention
of honey seem to go hand in hand. Those packers such as Sioux Honey
Association, that due their due diligence, resist the temptation to buy this
highly suspect honey at bargain basement prices knowing the repercussions if
and when the honey tests positive for adulteration or contamination.
Circumvented Chinese honey is muddying up the honey pools of some countries
that were once very good sources of quality honey. While the price
disparity of good versus bad honey has temporarily softened some honey
prices, prices could firm up again when Europe, who is shying away from
Asian honey starts bidding for South American honey early in 2009.

Honey Market Report
November 25, 2008

Ron Phipps

The international honey market has entered a period of turmoil and
considerable aberrational phenomena in import patterns have been observed.
There has been great tension in the American honey market between a market
for inexpensive "illicit" honey and the market for legal and reasonably
priced honey. This tension is experienced by beekeepers, packers and
importers.

Major Economic Conditions

Over-shadowing the tense honey market is a global economy that is clearly in
a recession that borders upon and flirts with a depression that could occur
if the financial crisis is not handled with wisdom by the leaders of major
economies of the world. Currency relations and energy costs are in flux.
These concerns are compounded by: 1) questions regarding global
environmental conditions and their effect upon agricultural production and
2) ongoing struggles to protect the health and vigor of the global
population of bees that are needed for both pollination of crops and honey
production.

The financial crisis has threatened the solvency of major banks and global
insurance companies. There is an old saying, "If you owe the bank a million
dollars, the bank owns you. If you owe the bank a billion dollars, you own
the bank." To this saying we may add, "If you owe a trillion dollars, you
own the government." As banks teetered towards insolvency with huge
portfolios of non-performing mortgages, it became clear that it was an
illusion that there are no ceilings to asset valuations and a dangerous
delusion that we could export and dissipate risks in the forms of bundled
mortgages and derivatives. To overcome the real threat of insolvency to the
financial system, a bailout was initiated and partial nationalization of the
financial system began to everyone's surprise.

This bailout both greatly increases the national debt and the money supply.
Both of those factors would tend to weaken the US Dollar and indeed that may
eventually happen. However, since this is such a global financial crisis,
the immediate effect has been to substantially increase the strength of our
currency relative to the Euro. In the second half of the year, the Euro
went from about 1.59E/1USD to 1.25E/1USD. That strengthens the competitive
position of the American market in buying honey in competition with European
buyers. U.S. dominated prices should weaken as a result. The increased
strength of the US Dollar relative to the Canadian Dollar has had a similar
effect on Canadian honey prices. Petroleum prices have plummeted as have
prices for many agricultural commodities such as soybeans. Consumer
confidence is down and both consumer debt and unemployment are up. As 2009
commences the macro-economic factors are very different from the
macro-economic conditions when 2008 commenced.

Supply/Demand

The overall international supply/demand relations point to a firm honey
market.

On November 7, 2008, the U.S. Federal Register published a preliminary
ruling whose impact will be to both: 1) increase anti-dumping rates for
Chinese exporters and 2) change the basis from ad valorum to weight for
Chinese honey imported into the U.S.A. These changes may take effect as
early as December, 2008. The anti-dumping duty rate will be $1.20/lb. which
should put a floor price of about $2.00/lb. on all Chinese honey entering
the U.S.A.

The clear intent of the U.S. Department of Commerce in making these changes
is to stop the U.S. Customs fraud that is associated with gross
undervaluation of Chinese honey entering the U.S. market. That this mode of
fraud is serious is manifested by the fact that a whopping 6.4 million
pounds of Chinese honey entered Los Angeles in the month of August valued at
$0.22/lb. For the first 8 months of 2008, the average customs value for
imported white Chinese honey was $0.189/lb. By so grossly under-valuing the
honey, the importers' cash deposit requirements became minimal. If, and
when, the duty basis is changed to weight and the anti-dumping rate
increased to $1.20/lb., the effect will be huge and the option of
undervaluation as a means of circumvention of the intent of the anti-dumping
orders governing honey will be lost. There may be huge retroactive duties
associated with this change.

The two other forms of circumvention remain, namely: 1) Bringing in "honey"
under the so-called "packers' blend" or other designations and 2)
transshipping Chinese honey through third countries. The Chinese are
talking of their new "joint venture" honey factories and businesses in
Indonesia, Malaysia, India and Thailand.

There has been a surge of "new companies" with no history of importation of
honey from countries with no history of producing those specific qualities
and quantities which are appearing in the marketplace. For example,
countries with tropical and semi-tropical climates tend to have flora
sources that produce amber, light amber and extra light amber honey, not the
huge quantities of white honeys that are produced in Canada, China,
Argentina and the U.S.A.

Some of the surprising and aberrational trade patterns are indicated below.

India

A total of 38,312,000 pounds from India were imported in 2007, with 65%
Extra Light Amber. Of the 24,520,000 pounds that entered in 8 months of
2008, about 41% was White, 17% Extra Light Amber, and 41% was Light Amber.
In June, 2008, a report that antibiotics and lead were found in Indian honey
led to talk of a ban on Indian honey in Europe and other international
markets.

China

Chinese White Honey had an average customs value of $0.226/lb. for the month
of August, 2008, and $0.189/lb. for the first 8 months of 2008. These
values are absurdly low, and have led to the imposition by the DOC of a per
kilogram duty based on weight, not value as indicated by invoices. White
Indian honey by comparison in August 2008 was valued at $1.29/lb.

Indonesia

White Honey imports up through August 2008 showed a 407% increase over the
total amount imported in 12 months of 2007. All the imported Indonesian
honey was white or extra light amber in 2008. 2008 imports from Indonesia
are projected to increase by nearly 200% over 2007 volumes and reach
7,569,000 lbs. for the year.

Malaysia

Total imports through August 2008 were 5,691,601 lbs., compared to 3,817,586
lbs. for 12 months of 2007. In 2007 and 2008 white or ELA colors comprised
100% and 80% of imports, respectively. This is unusual for a region that
would be expected to produce primarily darker honeys. In 2007, 91% of
Malaysia's honey exports were made to U.S. destinations, and the total
volume of Malaysia's exports increased 900% over that of 2006.

Thailand

White honey imports reached 1,262,100 pounds through August 2008, almost 10
times the volume of Thailand white honey which entered during 12 months in
2007. Honey imports from Thailand in 2007 were 85% Light Amber in color.

Packers report having received over the past year many samples from new
importers who offer honey in large quantities from new sources. Those
samples have flavor profiles that are like Chinese honey. Pollen analyses
have shown that most of the pollen has been filtered out of the honey, but
the pollen that remains suggests Chinese origin.

The two-tiered market is crushing to both the packers and importers, no less
the beekeepers, who try their best to conduct business with integrity and
responsibility. The price gaps are so huge that the unfair price advantages
are devastating. How much of the surge of under-valued imported honey
remains as carry-over and where it is will influence current tendencies.

Our country does not produce enough honey to meet its demands. So we need
imported honey to supplement our national production. But the honey should
enter the marketplace fairly so that all can compete on a level playing
field governed by law and business ethics.

Brazil

Brazil is becoming an important source of honey, both conventional and
certified organic. Brazil also has the potential to significantly increase
its honey production since it is a large agricultural producing nation that
can produce honey throughout the year. But roughly 80% of Brazilian honey
is darker grades like LA, ELA and Amber. The total 2008 crop is estimated
to be between 17,000MT and 22,000MT.

The U.S.A. has become the major market for Brazilian honey. In September
and October, exporters reported major increases influenced by the declining
availability of the 2008 Vietnamese honey crop most of which was already
exported. Both Brazil and Vietnam serve the industrial honey market with
the exception that Brazil also serves the organic honey market which has
grown so significantly in recent years.

Through October 2008, Brazil exported 11,318MT to the U.S.A., 2,130MT to
Germany and 782MT to Canada. The European Union is now open to Brazilian
honey exports. Germany has traditionally paid higher prices than has the
U.S.A.; during the first part of this year when the Euro was as high as
1.60E/1US Dollar, Europe could pay considerable premiums.

But the Brazilian Government has established many strict regulations that
must be followed in order to obtain the right to export honey and other
agricultural products. Step by step the Brazilian government is authorizing
more exporters to ship honey to Europe. Germany, Spain and England are all
eager for Brazil to participate in their markets and, thus, compete with
Argentina. The European market favors darker colors and stronger flavor
profiles. Therefore, Brazil's predominant production of darker grades
conforms to European flavor preferences.

Brazil's currency the Real weakened relative to the U.S. Dollar during the
early stages of the global financial crisis. This provides some
deflationary pressure on U.S. Dollar prices for honey. The second half of
2008 saw prices decline from what had been historic highs for Brazilian
honey.

Brazil worries about the potential decline in consumption as the world
enters what could be a protracted recession. Unlike many luxury goods, food
is not part of discretionary purchases. In countries like Germany where the
per capita consumption level is much higher than in the U.S.A., honey is
part of daily consumption. The work of the Committee for the Promotion of
Honey and Health becomes especially valuable in maintaining consumption
during periods of consumer uncertainty and caution.

Argentina

Argentina's 2007/2008 honey crop was about 70,000MT; 62,000MT of which was
exported by October. Europe bought about 70%-80% of the Argentine crop with
Germany taking 40% and the U.S.A. 15%. The carry-over is only about
8,000MT. Eighty percent of 2008 crop was LA and ELA and only 20% white. In
general, the Argentina honey crops have been declining from 100,000MT to
80,000MT to 70,000MT per annum. The color has also been drifting to darker
colors largely as a consequence of delayed crops that lead to a mingling of
sunflower with clover and alfalfa honey.

As a consequence of both anxiety for the economic environment and the 15%
devaluation of the Euro, U.S. Dollar prices during the 4th Quarter have
declined by 10% from about $3,200/MT, which represented historic highs.
That is equivalent to a change from $1.60/lb. to $1.45/lb. Demand is both
weak and confused as most packers in Europe and North America are waiting to
see how crops develop in Uruguay, Brazil and Argentina.

Argentina's 2008 autumn (our spring) was very dry. Early spring rains gave
a boost to the nectar flow but by mid-spring, high temperatures and dry
conditions returned. Parts of Argentina, like Chile and Uruguay, are in
mid-spring (our autumn) extremely hot and dry. Friends in Chile and
Argentina have reported that prior to Thanksgiving parts of the Pampas were
like "tinder boxes."

If dry conditions are not relieved by December 2008, Argentina will again
face a delayed, short and darker honey crop. The prospects for a bumper
crop of 100,000MT, as Argentina had in the past, have diminished, as they
have for the U.S.A. crop.

The political and economic situation in Argentina has grown tense. The
Government nationalized private pension funds and has intervened to impose
ownership upon the 30 biggest Argentine companies. Credit for both
companies and consumers is increasingly under the control of the national
Government.

Canada

Canada produced about 62 million pounds of honey in 2008, a decline of 10%
from the 2007 crop. Average yields declined by about 10% to 106 lbs. per
hive accounting, thereby, for the overall decline. The quality remains very
white and the flavors wonderful as is typical of Canadian honey. Sunflower
and buckwheat crops did not materialize so the 2008 crop is predominantly
white, clover and alfalfa.

Colonies remained at about 585 thousand hives. Costs of production were
high because of the previous high prices for fuel, labor and medications to
keep the bees healthy. Beekeepers are striving to keep hive numbers high as
a precaution against winter losses.

By mid-November, about 60% of Canada's 2008 honey crop was either shipped or
sold for shipment. The weak Canadian dollar allowed U.S. Dollar prices for
Canadian honey to drop and become very attractive. Canadian dollar
denominated honey prices began at 1.35 and have moved to 1.60 as more of the
crop was sold and beekeepers immediate need for cash decreased.

The Canadian banking system is highly regulated and there appears to be less
concern for insolvency in the Canadian financial system. This may result in
a strengthening of the Canadian dollar in 2009 when the magnitude of the
U.S.A. multi-tiered bailout becomes clearer and the new Administration
tackles the economic malaise caused by cumulative national and consumer
debt.

U.S.A.

The U.S.A. crop was about 160-170 million pounds, a promising improvement
over 2007. Good weather conditions in the Dakotas contributed to the
recovery from the disappointing 2007 crop. Inventories of previous crops
are depleted.

Many beekeepers report their bees are in good condition. The concern for
bee losses seems to be centered in Texas where many bees are wintered.
California wintered bees start out with minimal losses. There is concern
that there will not be adequate bees for pollination of the almonds in
February.

In Florida, the State Department of Agriculture is recommending 5 annual
sprayings of the citrus groves to protect against pests. The pesticide used
has been shown to cause larvae deaths in bees. This is creating concern for
Florida's important orange honey crop.

The American honey market, perhaps more than any other international honey
market, remains saddled with the tension between the two tiers of the
market. Beekeepers have been very active to try to prevent distortion of
the market by illegal circumvention schemes. Many foreign producers also
are concerned to bring stability and a level playing field that will
eliminate the circumvention of Chinese honey in the American honey market.
Hopefully, progress will be made.

Vietnam

The major Vietnamese honey exporters and the Vietnamese Beekeepers
Association estimate that the total 2008 crop will be between 37 million and
41 million pounds. At least 99% of that crop is LA, ELA and Amber honey.
There are about 6 or 7 major floral sources including rubber, coffee,
lychee, longan and cashew honeys. Vietnam's major market is the U.S.A., but
the Japanese Government has recently reduced duties on Vietnamese honey from
25% to 12%.

The quantities exported by Vietnam over 8 months of 2008 are similar to 2007
exports, and 85% is Light Amber in color, similar to the percentage of 89%
Light Amber for 12 months of 2007. Vietnam, like most nations, is
expressing concern regarding the potential negative consequences to the
honey market of the global economic crisis.

Science and Honey

There is growing international awareness that the principle Science First,
Standards Second is essential for honey.

Honey is a marvelous natural product that results from the interaction of a
wide range of botanical life forms and zoological life forms. Those
interactions are affected by a wide multiplicity of variables. Those
variables reflect the diverse flora, environmental, metabolic and
photosynthesis process and conditions found in the broad regions of the
planet where honey is produced. Honey's chemistry, like that of tea and
wine, is very complex, subtle and heterogeneous.

In respect to important questions of adulteration, flavor profiles, pollen
content, or country of origin, it is increasingly clear that a comprehensive
database encompassing the plethora of variables must be scientifically
gathered and a catalogue of authentic data of honey profiles must be
established. Academic scientists, commercial laboratories throughout the
world, and scientists from the FDA are becoming clearer about this need.
Some producing countries have begun to provide samples for such a requisite
database of different types of honey produced in different areas and under
different climatic conditions.

Without such a database, false positives become all too common. Friends in
the U.S. Department of Agriculture told me a story about a French accusation
made some years ago that a vineyard in the State of Washington of
adulterated its famous and excellent wines. The basis of this erroneous
claim was differences in the magnetic resource profiles of the nuclei of the
compounds in the wine as compared to the nuclear resonance profiles for
French and European wines. It was shown that the differences in test
results did not arise from adulteration by the Washington winemakers but
reflected differences in the metabolic processes of the plants producing the
grapes used in the wines.

We need a more comprehensive database. There are independent scientific
experts who recognize that fact and are willing to help analyze a
comprehensive database of the world's honey which is so rich in chemical
diversity.

Testing Limits and Tolerance Levels

If you attend virtually any meeting, any place in the world of beekeepers,
you will observe there are extensive and urgent scientific discussions
regarding how to protect bees. Bees like other forms of botanical and
zoological life are vulnerable to disease. This means that honey does not
dwell in a realm of absolute, pristine and mythical purity any more than
bees dwell in a mythical realm of invulnerability to disease.

The international beekeeping industry will find reasonable and realistic
ways to protect both bees and the people who consume the products made by
bees. The dairy industry, beef industry, poultry industry and seafood
industries have recognized the fact that their products have traces of
residues. The honey industry needs to do the same and work with the
Government to establish testing limits and tolerance levels based upon ADI
(average daily intake) levels. This is necessary for scientifically
assessing both risks and benefits.

Publications

I want to conclude this report by referencing two new books relevant to the
international honey industry. The Honey Revolution, co-authored by Dr. Ron
Fessenden and Mike McGinnis of the Committee for the Promotion of Honey and
Health, is being published. E. O. Wilson, prize-winning biologist from
Harvard, has co-authored The Superorganism; The Beauty, Elegance, and
Strangeness of Insect Societies. Both of these works will hopefully be of
value, increase our understanding and promote a positive agenda for the
future of the American and global honey industries.

November 2008

A good US raw honey crop has helped the world raw honey supply a bit, but
the demand is still high for honey. The Canadian raw honey crop is
comparable to last year, which was well below average. Brazil is just
starting to sell honey into the world market and India will be getting some
honey into the market very soon. This too should help on the supply side,
but somewhere down the road it is believed that demand is going to have to
drop to equalize the supply or allow supply to overtake the demand. At that
time prices will most likely soften. We are not at that point yet. We are
probably several months to a year away from that, so some would argue that
raw honey prices have not yet peaked.

What we have seen though, is that as new crop honey enters the market, it
tends to be offered at a lower price than what has been typical, but prices
quickly firm up and start to rise as demand warrants. This is a slightly
different trend than what we have seen in the past, where prices start high
and then are reduced when buying stalls. If this trend continues, this
could help to stabilize prices down the road. The Argentina drought is
still a concern, although they have had some beneficial rains recently. It
is still too early to get a good prediction of that crop.

The bottom line feeling is that raw honey prices are still trending higher,
though not as dramatically as we have seen since last February.

September 2008

With the demand increasing for Light Amber Honey, mostly as a lower cost
replacement for White honey, Light Amber honey prices continue to escalate
as this demand rises. At the same time, with what appears to be the best
U.S. White clover honey crop in several years, there was a very brief period
where it looked like White honey prices may dip. Prices firmed up very
quickly though as packers started to buy, and those white honey prices are
now again rising. With some U. S beekeepers holding honey off the market
for higher prices, White honey prices will probably continue to rise, which
in turn will also raise Light Amber honey prices.

Argentina raw honey prices are at historically high levels. Europe
continues to buy most of that honey with their much stronger Euro compared
to the U.S. dollar. Inflation has also driven Argentina honey prices
higher. With most of the 2008 Argentina honey crop sold and several months
before their new crop comes in, those prices should remain strong. Brazil
has been a strong honey supplier into the U. S. market the last few years,
but now with the European ban on Brazilian honey lifted, more of that honey
will end up in Europe and this will raise prices on that honey coming into
the U.S. Likewise, honey from Chile and Uruguay, which once found its' way
to the U. S., is now ending up in Europe. Brazil has good potential to
increase their honey production, and incentive should be high with current
raw honey prices. This could help to ease world wide honey supply shortages
in the future.

The Canada honey crop will be below average due to poor weather conditions
and heavy bee losses last winter. Canada honey prices could be higher than
U.S. honey prices.

New crop India honey should enter the market in January helping to
supplement the Extra Light Amber and White honey supply. Prices for this
honey could enter the market at prices lower than U.S. honey prices, but
could escalate quickly if demand is heavy.

Vietnam has become a good supplier of Light Amber honey into the world
market producing about 40 million lbs. Last years' honey crop has been
sold, and their new crop won't enter the market until about February.
Vietnam honey prices will probably be even higher than last years
historically high levels because of inflation and heavy demand for their
honey.

August 2008

The USA honey crop is just coming in. Although it doesn't appear to be
anything close to a bumper crop, it looks to be better than last year's
crop. Reduced bee populations due to Colony Collapse Disorder should have
minimal impact on the size of the honey crop as some beekeepers have been
able to increase their colonies. Reduced forage area probably will play a
bigger role in lost honey production as more acres are turned over to
cropland or are lost to urbanization. Many prime honey producing areas are
seeing excellent crop conditions with heavy honey flow, while other prime
areas are still struggling with weather extremes, either continued drought
conditions, or the other extreme where the weather has been too cool and too
wet for good honey production. We expect to have better indications of the
size of the crop by the end of August or early September. Prices for new
crop honey are 50% to 70% higher than last year at this time, depending on
the type of honey. White honey prices are still about 25 % higher than
light amber honey prices. Prices should remain strong as demand for this
honey will be heavy.

The health and wellness attributes of pure, natural honey have helped to
increase its' use directly out of the bottle, as a food sweetener, and as a
nutritious, long lasting energy source. This increased demand, along with a
worldwide shortage of raw honey, is the main driver for steadily escalating
raw honey prices. Increased energy and production costs have also
contributed to the rising raw honey prices. The weak U.S dollar will also
force us to pay a higher price to compete for honey in the world market.

As prices for raw honey have increased, we have seen an increase in
adulterated and contaminated honey entering the market. This adulteration
can occur at the raw honey source, or after the raw honey has been purchased
by a honey packer. Much of this adulteration is difficult to detect, and
requires diligent testing. Evidence has shown that adulterated honey can
lead to product failures when used as an ingredient because of the different
chemical makeup. Undetected contaminated honey can be an even bigger
problem when recalls and health issues are involved.

The leading importers of White honey into the U.S so far this year have been
Canada and India. New crop honey from these countries should be coming into
the market soon. The Canada honey crop will be short due to poor crop
conditions and heavy bee losses last winter. White honey should be
available, but with heavy demand, it will be higher priced.

The leading importers of Extra Light Amber honey into the U.S. so far this
year have been Russian Federation, China, and Brazil. ELA honey is
virtually off the market at this time waiting for new crop honey to come in.
ELA prices are getting closer to White honey prices.

The leading importers of Light Amber honey into the U.S. so far this year
have been Brazil, Vietnam, and India. Light Amber honey is also scarce at
this time.

July 2008

As you may know, Sioux Honey Association, as the world's largest honey
marketing organization, is engrained in the fabric of the world honey
market.

Their Co-op members typically produce between 37 million to 42 millions lbs.
of raw honey each year. This volume amounts to approximately 60% of Sioux's
total raw honey needs. They purchase the remainder of their needs on the
world market with approximately 70% of their purchased honey being imported
honey.

Sioux purchases imported honey out of necessity for supply and economic
reasons. The U.S. consumes about twice the honey that is produced in this
country, so importing raw honey is essential.

We are currently experiencing very tight supplies and escalating prices over
the last 5 to 6 months, forwarded contracting becomes impossible, unless
willing to pay above market prices. Even then, if the market continues to
rise, the honey contracted for you on the open market may be sold out from
under you, and companies like Sioux are left scrambling to purchase raw
honey at an even higher price.

We have seen light amber honey prices rise over 25% and white honey prices
rise over 50% over the last 5 to 6 months and those prices are still
escalating. We are doing whatever we can to protect our customers during
this time of volatility in the market, both with supply and with price, but
obviously, we cannot no one can sell at a loss.

June 2008

Raw honey prices continue to escalate with Light Amber honey prices starting
to escalate more rapidly. This was expected with the large price disparity
between Light Amber honey and White honey, and as Light Amber honey fills
the void for the short supply of White honey. There are reports of several
hundred containers of imported honey being held up by customs for possible
adulteration, and this has added to the supply issue.

The California honey crop, although better than last year, is still
projected to be below average. In the prime honey producing areas of the
Upper Midwest, conditions look favorable as rains have helped to relieve
some drought areas in that region. Things can change very quickly, but right
now weather conditions look favorable for a good crop. The issues that
could negate good crop conditions are:

Reduced forage areas as much more of this area is turned over to cropland or
is lost to urbanization.

Colony Collapse Disorder is becoming a bigger problem than originally
expected with more and more reports of heavy bee losses. Many beekeepers
will again opt to forsake a honey crop to rebuild their colonies for the
very lucrative pollination season.

Although expectations are for a better crop than last years' dismal 148
million lb. crop, we don't expect anything close to an average crop in the
U.S. The 200 million lb. average crops of a few years ago are probably
history as that number continues to drop, and 170 to 180 million lb. crops
may become the normal.

The Canadian honey crop is also expected to be below average, and prices
should mirror U.S. honey prices. Most of the 2008 South American honey crop
has been bought up by Europe as the U.S. found it difficult to compete for
that honey with our weaker dollar.

In summary, the raw honey price should remain strong through the end of this
year into 2009. Needed to stabilize prices will be more honey entering the
world market from Asian countries, but with many of these countries
utilizing their honey for their own needs, and with reluctance on the world
market to buy some of this honey for quality reasons, this will probably not
ease the supply issue. Not until raw honey prices reach a level that
reduces the demand for honey, will we see softening prices.

May 2008

HONEY MARKET REPORT

MAY 15, 2008

WESTERN STATES HONEY PACKERS AND DEALERS ASSOCIATION

Ronald P. Phipps of CPNA International, LTD.

From the perspective of European and Argentine honey friends who recently visited us, 2008 will remain a year of an international shortage of honey. The strong Euro and high petroleum prices will also play their role in keeping prices for honey firm. I quote from an article published on May 11, 2008 by Robert Wright, Shipping Rates Near Record Levels, "Consumers of basic commodities face some of the highest ever costs to ship goods after a combination of port delays, strong demand and ship shortages last week sent bulk shipping rates back close to record levels."

January 2008 imports of honey from Argentina to the U.S. were reduced to equal only 6% of the volume of the previous year, and imports from China were reduced to 5% of what they had been in January 2007. The few containers of Chinese honey which did come in had CIF import values in the range of $0.9-0.12/lb. Total import volume in January 2008 was down by 56% year compared to January 2007. The average price of all honey imports in January 2008 was up by 17.8% over January 2007.

The farmers' strike in Argentina has resumed in 4 provinces, including Buenos Aires. Transportation within Argentina and export of commodities remains under threat. Last Friday there were about 230 road blockades in Argentina, according to the New York Times, and thousands of farmers had taken to the picket lines. Thus far, Argentina has exported or sold over half of their short crop of 55,000MT-60,000MT. Prices still remain above U.S domestic honey prices, but the gap is narrowing. Argentine honey exporters have to be careful that they do not sell honey to the U.S. at lower prices than they sell to Europe. To do so would violate antidumping law and would trigger retroactive antidumping duties. The prices to Europe are a floor below which the honey cannot be sold to the U.S.

Due to the fact that Argentina discouraged export of beef to increase domestic consumption while soybean prices soared, much of the land previously devoted to pastures and clover and alfalfa production has been converted to soybeans and other grains that do not produce honey. It is expected that this is a long term change which will result in smaller quantities and darker colors of honey from Argentina not only this year, but for the foreseeable future. But that is not certain as Argentina has considerable social and economic volatility.

Recent reports indicate that Vietnam has sold almost all of their 2008 rubber honey crop. There may be trickles of lychee honey and later some longan honey. Offers are very hard to obtain from the only major international legitimate supplier of honey that has sold honey in the range of $0.95-$1.06/lb., Ex-Dock.

Vietnam is also working to open the European market this spring/early summer for Vietnamese honey. Thus, both Brazil and Vietnam, both of which have been important sources of honey to the U.S.A. market, are looking to export to the European Union where prices are higher due to a currency not saddled with or weakened by a triad of deficits, including national debt, trade deficit and consumer debt.

Brazil remains the major supplier of organic honey for the international market. Brazil also intends to expand honey production, as it has expanded beef production. But Brazil is lured to the large European market whose currency is strong and where the demand for organic foods is even stronger than in the U.S.A. Currently the northern Brazilian honey crop is being produced. This week's report indicates heavy rains have reduced the output from the north. Normally 80% of Brazil's crop is light amber honey. But recently there has been more extra light amber honey and white honey and less light amber honey from the harvest concurrent with our meeting. Prices remain very steep for conventional honey, about 25% higher than for Vietnamese honey of comparable color. Exports to Europe have not resumed yet. When they do, the impact on availability and prices for both organic and conventional grades of honey may be substantial.

Uruguay and Chile have had reduced crops and their preferred market remains Europe.

China is increasingly precluded from the U.S. market. The Department of Commerce and U.S. Customs records show Chinese honey being entered at absurdly low valuations such as $0.07/lb., $0.09/lb., etc. The intent is obvious; namely, to reduce antidumping duties now paid in cash by changes in U.S. law. That same honey is being exported at high valuations for Chinese Customs in order to maximize export rebates. In essence, based on the statistics, one could be led to conclude that Chinese honey exporters are submitting fraudulent documents to both the Chinese and U.S. Governments. Such documents might include fraudulent Country of Origin, fraudulent Bills of Lading and fraudulent Inspection Certificates. A casual reading of newspapers reveals reports of fraud on a wide range of Chinese products subject to antidumping duties.

Ironically, China is suffering a serious inflation of food prices. Under pressure, China is appreciating the value of its currency the Renminbi - Yuan, making export prices higher. Chinese factories are increasingly turning to the domestic market which has a population whose size has grown over the past 15 years to be between 1.5-2 billion people. Thus, China, unlike many nations, can readily absorb declines in export of many products, including honey. China's 2008 honey crop is reported to have declined.

Some interesting quotes from the Chinese press include:

"The central parity rate of the Yuan yesterday [April 21, 2008] breached the psychological mark of 7 against the US Dollar, exacerbating the woes of exporters and manufacturers. The central bank set the rate at 6.992 Yuan to the greenback, the first time the currency has broken through 7 since the Yuan's peg to the U.S. currency was scrapped in July, 2005."

"The Yuan's relentless rise has been pinching many exporters who have had to raise prices, shorten contract periods or shift to domestic sales."

"Meanwhile, fast appreciation of the Chinese Yuan may also be the beginning of the country's efforts to narrow its trade imbalance. A ballooning trade surplus in recent years has added to tensions between China and some of its largest trading partners..Now the continuous strengthening of the Yuan has begun to squeeze Chinese exporters hard enough to bring down growth of the trade surplus. China's net export plunged from $19.5 billion in January to only $8.6 billion in February."

"A too precipitous rise of the Yuan could pose a grave challenge to the export sector that is under increasing pressure from surging costs for labor, energy and materials."

The New York Times, April 30, 2008 article - "Some Chinese Exporters Prefer Euros to Dollars," by Keith Bradsher

'Facing the double-barreled threat of a falling dollar and weakening American demand, some Chinese exporters are starting to ask European customers to pay in euros.

Others are trying to increase domestic sales. This, in a nation whose economic juggernaut was built on exports.

Quite a few Chinese exporters are concluding that the best way to minimize currency risk may be to turn inward and sell more at home."

There remains concern about Chinese honey showing up via the grey market as "funny honey" from nations that: 1) historically are minor producers of honey, 2) have not been exporters of honey and 3) have well established relationships with overseas Chinese business people. Clearly American beekeepers all over the nation are talking about this and are concerned to prevent circumvention and allow business in honey to be conducted on a level playing field.

Market Direction

It is unlikely the market will decline. The real issues of concern: 1) will prices stabilize or surge even higher, 2) will there be adequacy of supply and 3) will there be adequate light amber honey for the international market and adequate white honey for the retail market?

What will happen to the Northern Hemisphere honey production this summer will obviously influence the prospect for stabilization of prices. Weather conditions in California are much better than in 2007. But there are new wildfires in Florida and drought conditions in some parts of the clover belts in the Dakotas. There were significant losses of bees after almond pollination. Some large beekeepers suffered losses of 40% of their hives. But great and successful efforts have been made to restore American bee colonies which, as a whole, are vigorous.

We should bear in mind the old agricultural adage: "Low prices are the best cure for low prices and high prices are the best cure for high prices." The fact that poor 2007 crops in Argentina and the U.S.A., coupled with the decline of legally viable access of Chinese honey to the U.S.A. market, has caused the market prices to steadily rise, finally gives producers adequate incentives to produce honey. Some beekeepers have indeed expressed their hope that prices will stabilize at levels that provide fair remuneration for all levels and segments of the industry.

Honey and Health

Our position is that we need to use good science as a marketing tool to increase consumption and consumers' perception of value. We also have to overcome the tendency to use poor science as a weapon to beat up producers. We need tolerance levels rather than myths. Both of these premises and goals are attracting support from the mature and thoughtful leaders of the international honey industry. There is no honey to market and sell if there are no bees. And bees, like other forms of life, whether botanical or zoological, are vulnerable to disease. Bees need protection through miticides and antibiotics. And the industry needs, as other larger, mature and scientifically sophisticated industries have already done, to establish reasonable and safe tolerance levels and testing levels since honey does not dwell in a land of mythical ultra purity. Absolute views are inconsistent with science.

If, on the other hand, we continue to document the importance of honey to major and chronic health concerns, the rise in honey's prices will be perceived as modest relative to honey's healthful benefits. This is a growing imperative within the international honey market.

March 2008

Raw honey prices are rising rather dramatically as a seemingly insatiable worldwide demand for honey and honey products have depleted whatever excess honey supply was available throughout the world. More and more countries throughout the world are utilizing their honey production for their own needs, and this coupled with smaller crops throughout the world seems to have helped diminished any surplus. The U.S. crop alone last year was down to 150 million lbs. This was the smallest U.S. crop in a 7 year sequence of declining crops going back to a 220 million lb. crop in 2000 and a high of 235 million lbs. in 1987. Bidding for new honey crops as they enter the world market has become frantic, and U.S. packers are finding it difficult to compete against the much stronger European euro and other world currencies. Although raw honey prices were expected to continue rising, no one expected the dramatic price increases that we are currently realizing.

White honey is leading the way with raw white honey prices already up over 30% higher than last year, and indications that price increases of 50 % over last year could be realized. Extra light amber honey and light amber honey are following suit.

February 2008

Raw honey prices on the world market continue to rise, and these price increases are beginning to escalate.

Beekeepers are reporting more & more bee losses, as Colony Collapse Disorder appears to be rearing its' ugly head again. Although it appears that the losses are not as devastating as last year, there is growing concern that the affects of CCD will be much greater than originally expected.

Projections for the 2008 South American honey crop are still unfavorable, due mostly to the extremely cold weather, a late spring, and heavy bee losses.

The European ban on Brazilian honey will soon be lifted. With the great demand for honey on the world market by Europe, packers are contracting for Brazilian honey in anticipation of the ban being lifted and much of the South American honey, including Brazilian honey, is destined for Europe, and won't make it into the U.S. because of the extremely high prices. Europe is sourcing raw honey throughout the world, and with the strength of their dollar versus the weaker U.S. dollar, Europe is aggressively buying honey even at the higher prices.

Some countries such as Turkey have turned from a honey exporting country into a honey importing country because of poor crops and higher demand. Even China is utilizing more of its' honey crop for its' own needs and reducing exports. Chinese honey exports are also limited due to ongoing quality concerns, and hesitation from quality conscious countries and packers to buy Chinese honey.

January 2008

The India honey crop is still selling for higher than anticipated prices as Europe continues to aggressively compete for that honey

Projections for the 2008 South American honey crop are still unfavorable, due mostly to the extremely cold weather, a late spring, and heavy bee losses.

The European Union banned Brazilian honey over 2 years ago, not because of quality issues, but because of a failure between the EU and Brazil to agree on testing procedures and standards. It appears that the EU and Brazil are close to an agreement on these issues at this time, and a meeting between the EU and Brazil scheduled for February 28, 2008 could result in the ban being lifted. With the great demand for honey on the world market by the EU, packers are contracting for Brazilian honey in anticipation of the ban being lifted. This has again raised prices for Brazilian honey, and basically all raw honey on the world market. This comes on the heels of steadily increasing raw honey prices over the last year. World raw honey supplies continue to struggle to keep up with world demand, thus it appears that we will see increasing raw honey prices over the next several months even if South America ends up producing an average or better honey crop.

November 2007

There are still limited raw honey offerings in the world market at this time. Prices remain strong as crop projections are reduced for in season honey crops. The U.S. crop will be smaller than last year, unable to recover from a very poor California crop. Regarding Colony Collapse Disorder, there are isolated reports of heavy bee losses, but most beekeepers are reporting fairly healthy colonies at this time.

Early projections for the South American honey crop are not favorable. A very cold winter has resulted in up to 30% bee losses in some areas, and the late spring will probably set back honey producing floral sources. The honey crop could be delayed up to 3 or 4 weeks. This will intensify competition for South American honey and will probably escalate prices earlier than expected. By January, we should have better indications of how the South American honey crop is fairing, and have a better indication of prices going forward into 2nd quarter 2008.

September 2007

There are not a lot of raw honey offerings in the world market at this time.  Prices remain strong as crop projections are reduced for in season honey crops.  Prices are expected to remain strong, with strong demand in the world market.  With the demand remaining strong, much of the available honey in the world market is being held off the market in anticipation of increasing prices, or it is being offered at very high prices, thus creating a somewhat artificial supply shortage.   

The USA crop is smaller than originally expected.  It should be comparable to last year’s crop, which was well below normal.  Drought stricken California produced a very poor crop.  A hot dry summer through the West and Midwest reduced floral sources in those regions.  Although a late honey flow is possible, many beekeepers are opting to shut down their hives, treat for mites, and prepare for winter migration and pollination.  Overall bee health is pretty good, as beekeepers are taking better care of their bees to reduce stress, and hopefully prevent a reoccurrence of Colony Collapse Disorder. There are some reports of bee losses but most beekeepers are reporting fairly healthy colonies. It is still too soon to know if dramatic die offs will happen this fall into winter.  The Canada honey crop is also much smaller than normal. Low bee populations, and poor spring weather conditions are responsible.

Little honey remains from this years Argentina honey crop.  A much smaller than expected crop this year strengthened world prices, which have steadily increased since last February, except for a brief period during the summer before a projected bumper crop from the USA fizzled into a less than average crop due to extreme heat and little moisture. 

The European ban on honey from Brazil should be lifted in time for their fall crop to be sold.  Forward contracting from Europe for that crop has strengthened Brazilian raw honey price.

As usual, most of the honey crop from Mexico is headed for Europe with small volumes coming into the USA. There are few offerings from India & Viet Nam as they await their new crops this fall. 

China is again expected to use much more of their honey crop for their own needs.  There was not a lot of “real honey” coming into USA from China until last month when the U.S. imported over 4 million lbs. The USA had previously been receiving a lot of packer’s syrup from China. (honey blended with other sugar syrups)  It is uncertain if this was actual packer’s syrup, or possibly actual honey sold as packer’s syrup to avoid duties.  The probability is high that any actual packer’s syrup entering this country would be blended with and sold as real honey.

August 2007

This has been a summer of concern, speculation, and some over exuberance of a possible bumper honey crop in the upper Midwest of the U.S. Excessive heat and a lack of rain have quickly dried up a once flourishing clover crop in that region. Drought in the West, especially California, had already reduced the honey crop in those areas. Raw honey prices, which had been rising since last February, stabilized a bit in July, but now have bumped up again on the realization that the U.S. crop will be smaller than originally projected. With the increased U.S. demand for honey, supply is still a bit short on the world market. The E.U. ban on Brazilian raw honey should be lifted in September, and the E.U. is already contracting for that honey, which has also firmed prices. It appears that raw honey prices will remain strong going into 2008. Improved Asian honey crops, and a good South American honey crop are needed to increase world honey supply, and possibly soften prices. Colony Collapse Disorder is still a real threat throughout the world, and if some of the colonies that have been rebuilt start to die off again this fall, supply concerns could again start to raise raw honey prices.

February 2007

Many have heard or read of a beehive disease called 'Colony Collapse Disorder'. There have been many reports and articles recently regarding this disorder. The website attachment below will help to explain the disorder and what it means. The brunt of the affect of this disorder is now in the hands of the beekeepers that will have the responsibility and expense of rebuilding their hives.

As far as what effect this will have on the beekeeping industry, honey supply, and honey pricing remains to be seen. If hive rebuilding resolves the problem, then the impact could be minimal. If colonies continue to disappear as fast as they are rebuilt, the situation could become critical. Sioux Honey Association together with S. Kamberg & Company will continue to monitor the situation very carefully, and we will keep you posted on any new developments or projected long range effects of this disorder.

http://maarec.cas.psu.edu/pressReleases/FallDwindleUpdate0107.pdf 

January 2007

There has not been a lot of buying activity for raw honey on the world market the last few months as most packers had filled there inventory needs in anticipation of even higher raw honey prices. This lack of activity plus projections of a very good South American raw honey crop has driven prices lower in the last month, and that trend should continue until packers start buying again, which should be in the very near future. With a good supply, prices should remain softer. If all packers start buying at once, prices may firm a bit in the short term, but the long term trend will probably be declining prices heading into the U.S. crop in late summer. Even though U.S. prices will remain higher than most imported prices, price pressure from imported honey should drive U.S. raw honey prices down as well.

December 2006

Honey prices have gone up steadily for about a year and a half now. First quarter 2007 prices will reflect the highest raw honey prices that we have seen for over 2 years. The good news is that Raw honey prices appear to be flattening as we enter 2007 and we hope those prices will begin to soften when the South America honey crops come in February and March 2007. This should translate to stable or lower prices entering the 2nd quarter of 2007 and should carry into the 2nd half of 2007.

October 2006

The world raw honey market is reported to be extremely volatile at this time. Prices continue to rise, and this trend is expected to continue for several months by some within the industry. Offerings for raw honey on the world market are few as demand exceeds supply for this honey. Honey packers have scrambled to buy whatever honey is available on the international market, as some suppliers could not deliver honey that had been previously contracted for.

The U.S. honey crop is smaller than average again this year with reduced production in Florida, Texas, California, and parts of the upper Midwest. Much of this honey is being held off the market in anticipation of higher prices.

Offerings later in the fall for some Asian honey may help feed the supply chain, but prices will be high. China is still not offering much honey into the world market at this time. Some supply relief could come in February or March 2007 as the South American honey crop comes in. This honey will most likely be snapped up quickly, prices will be high and may even still continue to escalate until the supply chain is completely full.

August 2006

The year has seen steadily increasing raw honey prices. With light amber honey in very short supply, the price gap between light amber honey and white honey has narrowed. Most of last seasons honey crops from South America, India, Viet Nam, and other Southern Asian Countries has been sold. The expected price stability with the onset of new crop honey from North America & China has not come to fruition. China’s honey crop is poorest in 10 years. Reports are that the Chinese crop may be down 30% to 50% of normal. China has been slow to get their crop into the world market. Prices for the honey that they are selling have been higher and more typical of other world raw honey prices. China is using more of their honey for their own consumption, replacing honey for sugar, as their sugar crop is also extremely short. The new shipper bill has passed both the House & the Senate and will be signed into law. This legislation will remove the loophole for exporting duty-free honey from China into the U.S., retroactive back to April 1, 2006. Passage of this bill has already raised world raw honey prices .05 to .07 / lb., and this trend should continue, as demand remains greater than the supply. U.S. raw honey prices continue to rise as the crop comes in. Production looks good in some regions while exceptional drought has severely limited production in other regions. The total crop looks to be smaller than last year, which was well below average in a succession of below average years. Canada’s honey crop looks to be below average as well, with prices reflecting U.S. prices.

May 2006

DOMESTIC:
Activity is still slow in the U.S. honey market. Many domestic honey producers are still holding some honey for higher prices. Light Amber honey is virtually unavailable, and White Clover honey prices have risen dramatically in the last month. U.S. packers are still apparently only buying U.S. honey for their immediate needs. The California crop is looking good with the possible exception of the early sage honey and orange blossom honey as these crops look to be smaller than average. Texas will start producing some light amber honey later this month into June with an average crop projected. It is still too early to project the crop in the prime clover honey producing states of the West and Midwest, but spring rains have given an improved outlook for an average crop. Prices for early domestic honey will remain high as demand will be high, and those prices could remain strong as the majority of the crop comes in later this summer into early fall.

IMPORTS:
Import raw honey prices have shown a steady strengthening since December. The remainder of South American raw honey is still in high demand, with Europe and the U. S. competing for this honey. Argentina withdrew their honey from the market in March as new antibiotic issues arose with both Chinese and Brazilian honey. They reentered the market in early April at a substantially higher price. Most South American honey has been sold, as well as India and Vietnam honey.

New crop Chinese honey will be entering the market soon. Prices for legitimate Chinese honey have already risen based on world market pricing and the projected passage of the New Shipper Bill by both the House of Representatives and the Senate. This bill would effectively stop exporters from shipping duty free honey from China into the U.S. Circumvention of Chinese honey will still be an issue. This honey will be sold at a cheaper price, but contamination and adulteration could and will still be prevalent with this honey. The Chinese honey crop coming in, along with the U.S. crop entering the market in late summer, should help stabilize pricing.

March 2006

The domestic raw honey market seems to be stagnant at the moment. Activity has been slow with a large volume of U.S. honey being held off the market. Income from lucrative almond pollination contracts, and the ability to place their honey under loan, has allowed producers to hold their honey for projected higher prices. Some had sold at higher prices but still had honey on hand, so packers were evidently buying only for their immediate needs. With weather conditions in the West and Midwest not favorable for honey production at this time, one would say it is possible to projecting escalating prices at least until fall, even with the extra 2005 crop honey on hand. At that time pricing could stabilize somewhat before the onset of the 2007 South American raw honey crop.

South American raw honey is still in high demand, with Europe and the U. S. competing heavily for this honey. Reports seem to confirm that Argentina's crop could be down as much as 20-30%. It is reported that import prices have shown a steady strengthening since December and there appears to be nothing in the near future which would cause them to decline. Thus, South American raw honey prices, which usually start higher than other world raw honey prices, remained higher. This generally raised other world raw honey prices with the possible exception of Chinese honey, which continued to be of questionable quality.

Some new issues have risen regarding both Chinese and Brazilian honey. Reports have surfaced of antibiotics in honey again, with Chinese honey and possibly Brazilian honey involved. With the amount of circumvention reported, it is difficult to know if other countries other than China are actually involved. With this, and the apparent non-compliance to meet sanitary issues required by the EU, reports are that Brazilian food products, including honey, may be banned from the EU, with a reported effective date of March 17, 2006. The EU is already shying away from Chinese honey, and if contaminants are confirmed, another ban on Chinese honey may follow. This has caused Argentine exporters to temporarily withdraw from the market in anticipation of even higher demand for their honey. If Chinese and other honeys are held out of the market even for a short period, there could be a surge in honey prices due to short supply concerns.

In other world markets it appears that much of the Indian and Vietnam honey crop has apparently already been sold.

November 2005

Raw honey prices have risen the last several months, and it is felt by many in the industry that this is a trend that could continue into next year.

Another smaller than average US crop has kept domestic honey prices high, and created a shortage of domestic light amber honey.

Europe is buying large volumes of honey in the world market, but shying away from Chinese honey as much as possible. Europe is paying higher prices for better quality honey, which has caused world raw honey prices to rise. Much of the previously contracted raw honey in South America that was destined for the U.S. was sold out from underneath these contracts as Europe offered higher prices.

New crop South American honey, which will hit the market in January or February, 2006 will start out higher priced, and remain there as long as demand holds, which could be for their entire crop.

China has lowered their raw honey prices to try to sell their honey, but much of this honey is still sub-standard and (or) adulterated.

September 2005

Raw honey prices have risen the last couple months, and this is a trend that could continue through the end of the year. A projected short U.S. crop has raised domestic honey prices, and imminent passage and execution of the English / Thomas Bill will probably raise imported raw honey prices in the coming months. This bill closes the loophole allowing new shippers in China to export Chinese honey to the U.S. without tariffs. With this loophole closed, Chinese honey prices should be higher, and since Chinese honey prices usually dictate price for all foreign honey, these prices could rise as well. Congress is also looking for ways to stop circumvention of Chinese honey.

The 2005 South American honey crop has basically been sold. The crop was short and darker than usual. South American prices started out high and then dropped when packers did not buy. Packers who contracted at lower prices for South American honey are now finding out that their honey has been sold for higher prices, and those packers are now paying higher prices to fill their needs.

The U.S. crop has been affected by drought in the upper Midwest and West and failure by some beekeepers to rebuild their hive populations after mites devastated their colonies. Many beekeepers opted to rebuild colonies instead of producing honey this season to be ready for the now more lucrative pollination business. The government loan program for beekeepers has assured a price level for U.S. beekeepers’ honey to maintain a healthy beekeeping industry.

Although supply still looks good worldwide, it will probably be lower than the last 2 years. Many of the beekeepers who got into the business when supplies were low and prices were high are now leaving the business due to lower prices.

May 2005

South America
The South America honey crop is below average, and most of the honey has been higher priced than the average world raw honey market price. World raw honey prices have risen somewhat in the past month while South American honey prices have declined under pressure from world honey market pricing, narrowing the price gap. With lower South American honey prices, Europe has been buying more South American honey. The U.S. has lifted duties on Argentina honey for 8 exporting companies, so more Argentina honey is coming into the U.S. Argentina has a higher proportion of dark honey than usual. Almost half the crop remains to be sold due to higher pricing and low demand. Argentina appears to have done a good job policing themselves in regards to cleaning up Nitro Furans contaminated hives, and restricting sales of contaminated honey.

China
China is still the largest raw honey supplier into the world market, and world honey prices are usually defined by Chinese honey prices. Chinese honey prices have risen slightly in the last month. Much of the Chinese honey entering the world market is highly suspect for adulteration as the Chinese continue to ultra-filter chloramphenical out of their honey.

India
The India honey crop started out well before drought greatly reduced the Eucalyptus honey crop. Prices have risen in the last month for India honey.

Mexico
The Yucatan honey crop is poor due to drought, and prices have been comparable to Argentina honey.

Viet Nam
The Viet Nam honey crop is below average, and harvesting has been slowed by rain. Prices have remained steady to slightly higher over last month.

USA
Projections are for another smaller than average USA honey crop. Mites have devastated hives, and beekeepers are struggling to strengthen bee populations going into the main honey crop season. Extended drought in much of the West and Upper Midwest of the nation is also expected to reduce the honey crop. USA honey prices should start out higher than average world market prices, which may raise overall world market prices. Unless the crop is extremely small, prices should soften somewhat under imported honey price pressure.

Canada
The Canada honey crop should be close to average with prices mirroring USA raw honey prices.

Overall raw honey prices appear to be bottoming out, and prices should remain somewhat stable over the next several months. A short USA crop coupled with a short Chinese crop may raise world raw honey prices, but sharp raw honey price increases are not forseen at this time.

January 2005

With a good supply of honey, and many packers reluctant to buy for fear of continued declining raw honey prices, prices have dropped even more than what was projected last quarter going into this quarter. Prices cold firm quickly if buying becomes heavy heading into the South American crop season, but realistically this trend could continue even though South American honey prices will start out higher. Pricing will be driven down under continued price pressure from Asian honey, especially Chinese. With large volumes of Chinese honey, and ultra filtered Chinese sweetener being sold freely into the world market, supply, and price pressure should remain strong. This could continue until all contaminated Chinese honey has been ultra filtered and flushed through the system. It is uncertain at this time whether the Chinese are producing contaminate free honey or at what levels.

Some issues that we think could influence raw honey pricing are:

A short South American honey crop, or contamination issues (nitro furans), that plagued them last year.
Continued mite problems that have plagued U.S. beekeepers. Mites are devastating bee colonies and producers of replacement bees. Once effective miticides are no longer working, and biological controls appear to be years off.
Larger than suspected volumes of low priced ultra filtered Chinese sweetener flooding the market.
Passage of the New Shipper Review Amendment Act that would end importation of duty free honey from China, and essentially firm up or raise import honey prices.

The unknowns are probably the biggest factor in regards to future honey prices, any number of factors can dramatically alter raw honey price, but with all that we can see, honey prices will probably continue to drop into next summer with some leveling and stabilization at that time.

October 2004

As new crop honey continues to be processed, most Southern Hemisphere honey has been reported to be all sold, and concentration is now on Northern Hemisphere Honey.

The USA honey crop is in, but final volume numbers are still out. The crop looks to be comparable to last year, which was well below average. Prices are declining under pressure from imported honey, but are still higher than most import honey prices. The Canadian honey crop is in, and appears to be well below average. Prices will parallel US honey prices.

Europe will need to import large volumes of honey for its’ needs. The EU has lifted the ban on both Chinese Honey and USA honey. Europe will probably rely more heavily on Chinese honey imports rather than South American honey. Europe will import Chinese honey under close scrutiny.

The Chinese honey crop appears to be below average. How much contaminated honey they still have, and how much ultra filtered sweetener they have left to sell is anybody’s guess. A large volume of Chinese honey is coming into the US either directly or circumvented through other countries. Much of this honey is still adulterated. Much of it is coming in duty free, due to some loopholes in the way duties are collected. Legislation is pending to close these loopholes, and to require cash deposits instead of bonds for the duties. If this legislation passes, Chinese honey prices may firm up very quickly, and may even rise. Even without this legislation, imported honey prices may be close to bottom.

The next South American honey crop will be ready for export starting in January or February 2005. With Europe allowing imports of Chinese honey, more South American honey will be imported into the US. Duties have been eased on imports of Argentina honey into the US, and Argentina seems to be doing a better job policing themselves on exports of honey contaminated with Nitro Furans.

June 2004

The honey market as we all know has tumbled from very high levels.  Many believe the key reason for the decline has been that new Chinese Shippers who, faced with high anti-dumping duties, have set up subsidiary “front” companies that neither pay cash deposits for their anti-dumping liabilities, nor even factor those anti-dumping duties into their selling prices.  Instead, these front companies have used bonds and are prepared to disappear if and when confronted to pay cash rather than bonds.  Legislation is in the works for cash deposits of Anti Dumping Duties.

This factor has been even more negative in its impact than the illegal circumvention in 2003 of the county of origin law, which resulted, it is widely believed, in Chinese honey entering through third party countries.

American beekeepers have suffered from the decline of honey prices and are hoping the market reverses its downward trend.  There is serious draught in many states suffering excessively dry conditions.  The total US crop is predicted to be below normal.  An optimistic estimate may be 185,000,000 pounds, to sustain consumption of about 400,000,000 pounds.  A pessimistic estimate could be as low as 170,000,000 pounds.

The Chinese Honey crop did not start well.  Strong efforts on the legal front and among Chinese beekeepers to prevent CAP and ultra-filtration of honey are making these largely problems of the past.  Negotiations are under way to agree on the levels of testing for antibiotics that will allow for accurate and consistent results and avoid false positives.

The Argentine honey crop is both shorter than expected and darker than usual.  Strict inspection for nitrofurans by the Argentine Government has made the actual export of Argentine honey slow and tedious.  Argentina is taking this problem seriously.

The Vietnamese honey crop is normal.  The Vietnamese Government has taken serious steps to prevent transshipment of Chinese honey.

In general it is felt within the industry that market conditions at home and abroad should lead to a more stable and firmer market unless, of course, the North American honey crop unexpectedly explodes.

May 2004

Raw honey prices continue to decline under pressure from cheaper imported honey but the problem remains that much of the imported honey is still questionable quality.

Ultra-filtered sweetener adulteration is rampant.  Argentina honey imports are down due to higher prices and possible nitro-furans contamination.  Chinese and Argentina honey is finding its way into the US through other countries to avoid duties and to hide adulteration.  Large volumes of adulterated and contaminated Chinese and Argentine honey is finding its’ way into Canada, either direct or circumvented thought other countries, and then make its way into the US.

Chloramphenicol contamination is still an issue, and nitro-furans contamination is becoming a larger problem.  The FDA is finally starting to more closely monitor honey coming into this country from Canada and other countries.  They are also increasing sampling of domestic honey, looking for adulterated products.  If this action results in reduced honey imports, supply could tighten.  If imports of cheaper, suspect honey slow, the price decline could slow and prices could firm up.

April 2004

Raw honey prices continue to soften somewhat driven by lower import prices from Asia. Much of this Asian honey is still highly suspect for CAP & adulteration, so testing is still critical for all imported honey. Processed honey prices should continue to decline modestly through the rest of the year, with some possible firming at that time.

January 2004

The price difference between Domestic raw honey prices and imported raw honey prices should continue to narrow bringing more price stabilization to the market. Although there may be some spikes, the overall trend should be mostly stable to slightly downward. While supply is now greater than demand, much of the supply is of questionable origin & quality. A large volume of ultra-filtered Chinese adulterated honey is creating an artificially large supply. This has, in some respects, created two separate markets - The higher priced legitimate raw honey market & the questionable lower price raw honey market. If the FDA or the honey packers & importers themselves decide to crack down on this adulterated honey entering the US, supplies could tighten. This could again firm up or even raise raw honey prices. Ongoing concern over illegal antibiotics is still an issue & could create some supply issues in the future.

The 2004 Argentina crop is reported to be smaller than average. Argentina raw honey prices, which generally set the market for all of South American pricing, are fairly high and stable. These prices will probably stay firm until the crop is sold. These prices could also rise as the value of the US dollar weakens against the European Euro.

The 2004 US crop will have a bearing on pricing. If floral sources, such as clover, recover from the drought damage and if weather conditions remain favorable, the US could expect a more average crop, which would keep supply even with or ahead of demand. US raw honey will still be more expensive than imported honey, but is of much higher quality.

The 2004 Chinese honey crop picture is still cloudy. It will still be an unknown as to how much uncontaminated raw honey they will produce & whether they will contaminate the clean honey they produce by blending it in with the large supply of chloramphenicol contaminated honey & ultra - filtered sweetener they still have. This would be done to get CAP readings under undetectable levels. Whether the Chinese sell their raw honey into the world market legally or illegally, the volume that they sell should keep supply strong.