> I know what it costs me to produce a pound of honey as does Michael Palmer > and most commercial beekeepers. Maybe, but I never did know what it cost me to produce a pound of honey (cost of production, or COP) -- at least in the sense of having one single simple number, either before the season started, or even after the crop was sold. COP depends on many assumptions. I did, however, have an idea of a range of numbers could be used as my cost of production, depending on the purpose. I did always figure out, in advance, the *range* of probable cost. This range of numbers depended on other numbers that would never hold still. Going into a season, I would consider my expected crop yield, the costs of each expected input (expense), the value of by-products, contingencies, extraordinary gains and losses, and assign a value to my own labour and capital using current market benchmarks for small business or agriculture. I would also look at the Alberta Agriculture industry study of costs and returns (consensus data). (FWIW, that freely available Alberta data was crucially helpful to the AHPA in establishing beyond doubt that China and Argentina were dumping honey into the USA and other countries below cost of production, since I know of no other jurisdiction that compiles such data, and in such an impartial and thorough fashion). Using that, I came up with a fairly soft number that would likely pay all my bills (and not necessarily myself) that was a drop-dead number. Below that, I would be eating up my capital and going broke. Above that price, I was getting some return, and the farther above that, the better I made out, until, at some price, I was getting benchmark returns to capital and labour. In other words, I was making wages and management fees, and getting bank interest on the value of my investment. Higher than that price, I was getting a reward for taking risk (profit), and, when the price spiked, there was money (windfall profits) to save in order to weather the future price downturns that inevitably follow price spikes. Anyone who just went out and spent that windfall is currently very likely under water. Those who used the opportunity to either sell out or invest carefully in cost-saving or profit-maximizing measures and to eliminate bottlenecks in their outfit will likely last a few more years. After each season was over, I, of course, had firmer numbers and a better idea of what each pound had cost me, especially if I has sold it and did not have large continuing interest and insurance costs. That information was of limited use when selling into a world market, and it applied to 1.) me and 2.) that year, only. All in all, a cost of production number is only useful for determining profitability and -- more seriously -- unprofitability, since large profits are hardly a problem, but increasing unprofitability can only continue as long as the beekeeper can or will keep paying out for the privilege of giving honey away. COP is a useful number for seeing the need to either cut costs -- or fold. As a tool for setting price, COP is not good for anything, except for determining where competition may come from (fair competition, anyhow). Beekeepers are price takers, not generally price setters. The market sets the price on bulk honey. In smaller lots, however, the producer may have some price control, and is wise to take as much as can be negotiated at each event. Not to do so is to leave some money on the table -- money that may come in handy (see below) -- and also to lower the market for all honey. For the small beekeeper, selling at retail, the best approach -- IMO -- is to use the current bulk prices as a base and liberally add the cost of handling, packaging, transporting and selling the honey, plus shrinkage, risk, etc. Doubling or tripling the bulk price is not unreasonable. If the package size is small, and selling lots small, then the limit is what the traffic will bear. Usually there is competition, and that will be the limiting factor, and takes us back to total COP as the drop-dead number. Cutting price will often not often increase sales much, but I have seen beekeepers actually increase sales by charging more than everyone else! I've also seen beekeepers selling below what we all figured must be their total costs, losing money on every sale, and hoping to make it up on volume :) Since the COP is an elusive number, I've always tried to sell as far above it as possible. After all, I make computational errors and omissions on a fairly regular basis. My advise to anyone interested; try to make a handsome profit. That way, if you miss, you don't fall below break-even, and you can use any bonus you make to improve your quality, service, and to relax, making yourself a more pleasant supplier and employer, and, if you feel guilty (some can't allow themselves too much success), give some to the charity of your choice or help a needy person. Or you can give back to this industry: join and contribute to a club or national organisation, help a starting beekeeper, start a website, or take some of your well-earned leisure time to write informative and entertaining articles to BEE-L. allen -- Visit www.honeybeeworld.com/bee-l for rules, FAQ and other info ---