Market Farming

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http://www.insidedenver.com/drmn/news_columnists/article/0,1299,DRMN_86_622278

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Jensen: Beekeepers can't compete with Chinese

SEDALIA -- One does not think of bees having a nationality until one sees the 
business card of Paul Hendricks, president and sole employee of the Colorado 
Sunshine Honey Co. 
"Candles and honey," it reads, "made in USA by American bees." 

This then is a story of American bees versus Chinese bees or, in the broader 
context, free trade versus protectionism. 

Hendricks, 51, used to be a Sears Roebuck salesman before he became what he 
called a "basement beekeeper" back in 1976. That is, beekeeping wasn't 
profitable enough to sustain him and his family, and he had to work two jobs 
for 15 years before the honey money started rolling in. 

He became a full-time beekeeper 10 years ago and now has about 600 hives, or 
colonies, placed on 25 farms in Jefferson, Douglas and Elbert counties. His 
bee count varies from 3,500 per hive in winter to 60,000 in summer, and each 
hive produces 90 pounds of honey per year. 

Hendricks is the only commercial beekeeper in the tri-county area and one of 
only 15 in Colorado, so his bees are much in demand. 

That's because there aren't enough bees in the United States to pollinate all 
its agricultural produce -- we killed off most wild bees with crop-spraying 
-- and without pollination the nation would lose a third of its food supply. 

"Back at the turn of the century there were 5.9 million bee colonies in this 
country," said Hendricks. "Now there are about a million. There used to be 
30,000 colonies in Boulder County alone; now there are less thn 30,000 in the 
whole state. They raise bees in California, but there's such a shortage you 
couldn't buy a bee if you wanted to." 

A hive, by the way, costs about $350 and a queen bee $12. 

Because of the bee shortage, Washington had to drop its long-standing ban on 
the importation of bees, dating back to 1922, to allow the entry of Russian 
queen bees. Hendricks has several Russians, so his business card claim of 
"American bees" is not entirely truthful. 

Asked about this, he smiled guiltily and said: "We naturalized them." 

The U.S. Department of Agriculture estimates that honey bee pollination adds 
$17 billion a year to American crop yields. And big operators with plenty of 
hives make as much money off pollination as they do honey. 

Lyle Johnston of Rocky Ford, for example, trucks 2,500 hives to California to 
pollinate the almond crop, then to the Pacific Northwest for apples, pears 
and cherries. He pays $14 per hive in transportation costs but earns $55 per 
hive in rental fees from each farm that uses his bees. Other beekeepers go as 
far as blueberries in Maine or oranges in Florida. 

But Hendricks is content to stay in Colorado and try to make a living off 
honey, which is becoming increasingly difficult to do. The problem, he says, 
is foreign competition from China and Argentina, which have been dumping 
their honey in the United States at cut-rate prices. 

Americans consume 325 million pounds of honey a year. Domestic beekeepers 
only produce about 200 million pounds, so there is a need for imported honey. 
China sent in 100 million pounds last year, at 42 to 50 cents a pound, and 
Argentina 70 million, at 48 to 55 cents a pound. 

This, of course, is not reflected in supermarket prices, which continue to 
average $2.40 a pound. But middlemen, the packers, won't pay American 
producers more than the lowest prices of imported honey, driving many out of 
business. 

Hendricks says he needs 60 cents a pound to break even and 90 cents a pound 
to make a decent living. He's been getting around the packers by selling 
directly to restaurants at $1.25 a pound, but is sitting on a warehouse 
filled with 45,000 pounds of unsold honey and expects to produce another 
55,000 pounds this year. 

"I work 11 hours a day, I drive a 25-year-old truck, I pay sky-high gasoline 
prices, and I keep losing bees to bears and human thieves," said Hendricks. 
"My overhead is $20,000 to $25,000 a year, and my net operating loss last 
year was $18,000. How long do you think I can stay in business? 

"Free trade is fine as long as it's confined to national borders. I don't 
mind competing with a beekeeper in Texas or North Carolina who has the same 
costs as me. But I don't want to compete with countries where wages mean 
nothing. They're holding our heads under water until we expire, then they'll 
come in and raise their prices after capturing the market." 

Johnston, who is national vice president of the American Honey Producers 
Association, agrees there is no way that U.S. beekeepers can compete with the 
Chinese. 

"There, Beijing owns the bees, the government pays its beekeepers $600 a year 
and they produce 400 million pounds of honey," he said. "Since the Chinese 
don't eat honey, all of that is available for export at whatever price 
importers are willing to pay. It's the middlemen who are making the money." 

Our government does have anti-dumping laws, and China is regularly penalized 
for selling honey below its production costs. Last month the International 
Trade Commission in Washington slapped a 40 percent tariff on Chinese honey 
and 57 percent in tariffs and countervailing duties on Argentine honey that 
it deemed had been dumped. 

A new law allows the money collected from these fines to go directly to the 
wronged parties, in this case American honey producers, as opposed to the 
U.S. Treasury. There is also talk of reviving price supports that U.S. honey 
producers lost in 1994, as part of a $79 billion agricultural assistance 
program over the next 10 years. 

Hendricks says he would welcome the help. Johnston is more ambivalent. 

"My father started this business in 1908 and always prided himself on never 
accepting a dollar from the federal government," he said. "I feel the same 
way. If you can't survive, find another job. 

"On the one hand, subsidies have ruined agriculture. Once the government 
starts setting prices, we're headed for disaster. On the other hand, we have 
a tremendous responsibility to maintain our food production. If American 
agriculture is destroyed, we'll be on our knees begging other countries for 
food, just like we're begging them for oil. We can't let that happen. 

"To grow food we must pollinate. That means keeping our beekeepers in 
business." 


June 9, 2001

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