At 20:50 -0600 3/6/99, Martin Braunstein wrote:
 
>I am almost certain where our problem lies.  Our honey exporters (I.H.E.O)
>are telling us that we must sell our honey cheaper so that it may be sold in
>the U.S.  I believe that your importers (NHPDA) are making all the money and
>driving prices down with their greed.
>
>Since the exporter/importer has such a large profit margin, he can continue
>to offer our honey from Argentina at lower and lower prices.  Even to the
>point that
>Argentina honey has replaced U.S. honey.   U.S. producers must sell their
>honey so
>they will match Argentina prices.  The market continues to drop and
>beekeepers suffer.
>
>What can we do?  I think that I have the answer.  Argentina producers can
>demand more for their honey.  Why not 85 cents per pound.  Add freight,
>duties, and commissions and the prices will be around $1 in the U.S.  We can
>all be happy with  $0.85-$1.00 per pound for honey.
 
The main problem as I see it is that foreign honey producers in Argentina
and China especially have much lower labor costs. Honey production is labor
intensive, and only so much can be done to automate it.
 
In China most of the population lives on rural farms. Many family's houses
are little brick shacks the size of the sport utility vehicles driven by
U.S. soccer mom's. The cost of honey production is very low. Even with the
low prices in the U.S., to the Chinese peasant honey producer this is a lot
of money. China with it's large population has a large potential market for
honey, but with the prices paid by the export market and low wages, no
doubt this honey is priced out of reach for much of the local population.
Thus, there is low local demand for Chinese honey. Chinese honey prices
will go up when the Chinese standard of living inproves and wages rise.
 
Wages in Argentina are also lower than those in the U.S., although not
anywhere a low as those in China. Prices of merchandise and services in
Buenos Aires are similar to those in the U.S., but Argentina has a
proportionally much smaller middle class than in the U.S. Argentina is
blessed with a nice climate for honey production and lots of arable land.
This coupled with their lower wages enables lower cost production.
 
So other than legislatively mandated quotas or tarriffs, honey from these
countries will continue to be produced at lower prices until ther economies
and the wages of local workers and the buying power of local consumers go
up.
 
Paul