re: "Point 1:  Do you need out of state hives to fulfill all the pollination 
requests made by the pollen growers or can the Californians handle the requests 
for hive numbers in state?"

Excuse me for being pedantic but I've been re-reading some old economics texts 
and they're obviously a bad influence on me...

As stated, the question above is inherently unanswerable.  It is incomplete.  
Could Californians handle all the pollination requests in the state?  By 
definition, yes, if you set the price of pollination high enough.  In a 
functioning market, supply and demand will always match.

Could Californians handle all the in-state pollination requests at a price point 
that keeps the out-of-state beekeepers away?  Demonstrably, the answer is no.  
Californians already enjoy a substantial advantage in the lower transportation 
costs - they are simply closer to the customer - yet the out-of-staters keep 
coming.

I think the right question is "If you closed the California border, what would 
be the equilibrium price for pollination?"  


I don't have enough data to reliably answer that question but comparing it to 
other industrial inputs (and from the grower's perspective, pollination is an 
input), a price elasticity of -0.3 to -0.5 seems reasonable.
If you assume 1.5 million hives currently used for pollination (a swag lifted 
from an article in The Economist) and 500,000 hives in CA (rounding way up from 
an outdated estimate by the National Agricultural Statistics Service), that 
implies a shortfall of 2/3 the current demand.
Plugging that into the price elasticity equation suggests that pollination price 
would have to rise by a factor of 3 to 4.3 to match the current supply.  Of 
course, at that price more CA beekeepers would enter the market.  Guessing at a 
supply elasticity of somewhere between 0.5 and 1.5 (supply elasticity is 
notoriously difficult to estimate because it's a function of time-horizon) and 
balancing the equations, I get an equilibrium price of about double the current 
pollination price and an equilibrium quantity just over 1 million hives.

I suppose along the way we have answered the original question, though.  Even if 
every single California colony were turned to commercial pollination, they could 
not meet the current demand (at anything near the current price point).
 Mike Rossander
www.rossander.org/infosec

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