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

Updated March 2008 by Diane Huntrods, AgMRC, Iowa State University.

Overview 
According to USDA reports, more than 2.4 million honey-producing colonies generated 155 million pounds of raw honey worth $161 million in 2006. The states producting the most honey were (in order) North Dakota, California and Florida. The average price for domestically produced honey was $1.04 per pound in 2006, up 14 percent from $0.90 in 2005.  
 

Demand
U.S. consumption of honey is nearly 350 million pounds of which 200 million pounds are typically produced domestically. To meet demand, the United States imported 2.4 million pounds of honey in 2007, primarily from China, Argentina and Vietnam. The total value of honey imported that year was over $154.9 million.

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. Individual consumers, who purchase small amounts of honey for personal use, also significantly contribute to overall consumption in the United States.

Product

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. In the last ten years, honey production peaked in 1987 with 227 million pounds. Since 2001, annual production has ranged from 170 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 Disease (CCD), which caused the die-off of 30 to 90 percent of U.S. commercial honeybee (Apis mellifera) colonies in more than 22 states. The disease is characterized by low numbers of adult bees but few signs of dead bees. In September 2007, researchers announced that they had discovered a link between CCD and a honeybee virus called Israeli acute paralysis virus.     
 

To add value to the raw honey market, many producers 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 by-product of the honey harvest.
 
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 $175 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.

Competitive Products

Inexpensive imported honey provides constant pressure on the domestic industry. Recent imports from China and Argentina and very low prices have tightened margins for producers of all sizes.

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 2.4 million 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 about 315 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 the National Honey Report of February 2008, the three leading importers of U.S. retail (that is, comb and packaged) honey in 2007 were (in order) South Korea, Yemen and China. The largest importers of natural U.S. honey that year were Israel, Canada and Japan. The total value of U.S. honey exports in 2007 was over $10.1 million.
 

Government Regulation

The apiary industry falls under USDA regulatory control for grading of product and can participate in commodity loan programs as well as other risk management programs.

Outlook
Between 1947 and 2006, honeybee colony numbers nationwide declined by over 40 percent, from 5.9 million to 2.4 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.

The new Farm Bill authorizes funding for research on CCD and other issues. It also stipulates that the the honey's country of origin be indicated, enabling consumers to distinguish U.S. honey from imported honey.     

Sources
American Beekeeping Federation 
National Honey Board
National Honey Report
USDA - AMS
USDA - FAS
USDA - NASS