Hi Martin and all who have been following the "World Honey Prices"
thread,
 
A lead item in the world news the past few days has been the plight of
dairy farmers, many of whom ramped up production to take advantage of
higher prices recently.  The results have been a glut of milk and dairy
products and prices have dropped dramatically.  Dairymen are now singing
the blues that they are unable to recoup their ramping up costs based
on current market prices.  Is this not the same perdicament that many
beekeepers ar in?
 
The best offering for honey in recent years was about $1/lb US
wholesale.  A number of things came together all at once to push prices
to that level (implementation of Chinese quotas, devastating colony
losses attributed to varroa, poor harvests).  Many producers were quick
to react to $1/lb and ramped up to increase their production.  Wholesale
prices plumeted and many producers were left singing the blues that they
were unable to recoup their ramping up costs based on current market
prices.
 
Now, two years later we're left with prices a bit better but pretty
close to what they were the year before the $1/lb spike.  Before the
spike the whipping dog was China, after the spike the whipping dog is
Agentina.  In the meantime there are a lot of producers not of Chinese
and Argentine persuasion who are also accepting pre/post-spike offerings
for their honey.
 
Now, if the problem is this simple we can whip whichever dog we choose
but the bottom line is supply and demand - there is sufficient supply
to satisfy demand whithout brokers having to pay a high price.  That
"Argentina has doubled its production in ten years" may have something
to do with this supply, but I am just as guilty as I personally can
claim at least comparable increases.
 
However, if the problem is oligopsony as Martin claims then perhaps we
should stop whipping dogs and look at the oligopsony.  Webster's
defines oligopsony as "a market situation in which a few buyers control
the demand from a large number of sellers."  For the sake of discussion
let us agree that oligopsony is indeed the problem.  How do we deal with
that?  I doubt that the suggestion for US beekeepers to corner the
market on Argentine honey by buying it up for a price higher than they
get for their own honey is gonna happen.  The economics simply aren't
there for the buyer (although this plan appears to be a good deal for
the sellers!).
 
So, is there another way to combat oligopsony?  Although we do not like
brokers who buy low and sell high, there is nothing unethical about what
they are doing.  Buy low, sell high is a capitalist success story.
There is something more sinister to the term "oligopsony".  Perhaps
there is something unfair, perhaps illegal about the communication among
the "Seven exporting firms (who) concentrate over 90% of honey exports
in Argentina".  In the states, collusion to fix prices is a crime.  Are
there no similar laws in Agrentina?  Does the communication among "the
seven firms" constitute collusion or is it just sound business practice?
I don't know the answer, I suspect it is a fine line.
 
Might there be some other way to cut out the oligopsonous middle men?
Perhaps a co-op of Argentine producers so Argentina can corner their own
market?
 
Thank you Martin for the awareness of the marketing practices of
these companies (ACA, HONEYMAX, CEASA, NEXCO, TIMES, CONAGRA and RADIX).
I will be more aware of who and what they are if/when our paths cross at
Apimondia.
 
Respectfully submitted,
Aaron Morris