Martin Braunstein said a number of things
about honey importing that caused me to
offer this response. Am I serious? You
decide. I'll never tell.
> We must figure out how Argentineans can make more
> money on their honey and not depress prices in the U.S.
> Depressed prices in the U.S. will depress prices in
> Argentina and viceversa. Are we in agreement?
Martin makes two assumptions:
a) That "honey is honey"
b) That "prices is prices"
Both are misleading presumptions. One must be
more specific, even in a non-technical
"market overview". From my view, the situation
could be best summarized as follows:
1) The price paid for foreign honey must get
higher at each step in the chain from:
a) Foreign producer
b) Foreign broker
c) Foreign exporter/broker
d) US importer/broker
e) US wholesaler
f) US retailer
g) and (at long last) the US consumer.
Everyone in the chain wants to make a profit.
Each is quite willing to make his profit at
the expense of the other. There are few, if
any rules to the game these days, (and "free
trade" sounded like such a good idea to so
many so recently) which means that some number
of the above have hoisted (or soon will hoist)
the Jolly Roger and turn pirate, in an attempt
to become an international corporate honey robber-
baron. (Not to be confused with "honey-robbing"
among bee colonies.)
2) If we assume that the US consumer is not prepared
to pay a premium for imported honey, you have
a problem that is structural, rather than market
related. Since there are a few extra steps in the
chain between you and the US market, it seems obvious
that I could sell my (US-produced) honey to man
(d) or (e) in the list above, and get a better price
than you could ever hope to get from man (b). Of
course, all my costs are much higher than yours, and
there are many regulations I am honor-bound to follow
that you are not subject to, so I am not sure who
really gets the higher profit in absolute dollars.
> 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.
Greedy US brokers are the source of all evil?
Yeah, right. In fact, they are not one bit
more or less greedy than your own exporter/brokers.
Yet, you somehow trust the word of your own
broker, while distrusting the US brokers.
It should be obvious to even the casual observer
that the broker who buys directly from you has
the most to gain from negotiating tactics that
convince you to fear/hate/distrust his customer.
He makes his money if he can "buy low" from you,
and "sell high" to them. If you believe his
stories, you do so at your own peril. Welcome
to the wonderful world of NAFTA, which should
stand for "Nothing Actually Fair Today, Anywhere".
As a cross-check, why not call or e-mail a few
US brokers and importers yourself? You may
want to question the "facts" provided by the
people who clearly have an interest in getting
you to accept the lowest price possible!
> Since the exporter/importer has such a large profit margin,
Does he? Perhaps he feels "squeezed" by
rising costs of things like shipping.
Don't demonize the people that make your
business possible! If you could not find
anyone to buy and export the massive excess
you willingly produce, you might soon be knee-deep
in honey from Asuncion to Terra Del Fuego!
As it is, what you say seems to indicate that
Argentina's exporters may be "dumping" honey on
the US, perhaps in a misguided attempt to capture
"market share" when they have not first
differentiated their product from the competition.
Be advised that such tactics only work when:
1) One can survive the period of
below-cost prices long enough
to discourage the competition.
2) One has a brand name, or some
other sort of unique identifier
that can establish the "critical
mass" to keep market share your
market share once you get it.
If the above conditions are not met, the
"advantage" only lasts as long as the low
prices, and the ultimate result is failure.
Your comments indicate that your honey exporters
may soon suffer from a self-inflicted mortal wound.
They may drive their own producers to reduce production
and/or lose money on each pound of honey exported.
US honey producers may also soon suffer from a self-
inflicted wound. They have done nothing to make the
US consumer aware of even the basic fact that US honey
is at least under the watchful eye of the USDA and
agricultural inspectors from hive to their mouth, while
imported honey is not. How could anyone not see such
an obvious strategy? (The whole "honey analog" tempest
in a teapot would only enhance the story. Has no one
even thought to call "20/20", "60 Minutes", or
"Dateline" to make them aware of this serious risk to
the US consumer?)
Would anyone still like to buy a vowel, or can
everyone solve the puzzle at this point?
> he can continue to offer our honey from Argentina at lower
> and lower prices.
The obvious response to this on the part of US
producers would be to start insisting that
their bottlers put four little words on
appropriate retail honey labels:
"100% Pure USA Honey".
Producers of US honey have a significant advantage
in the US, given the concerns about food quality,
pesticide risks, and sub-standard labor practices
associated with imported foods and other products.
While the risks may be imaginary in many cases,
exploiting such concerns are a valid marketing
tool that could be used to promote US honey,
and compete with "imports".
The result? Imported honey or honey that was
a blend would likely not be labeled as to origin,
but certainly not use the term "100% Pure USA Honey".
One must presume that beekeepers would not be
so bold as to lobby for yet another law to
require such labels, but no one can prevent
a bottler from seeing the advantages of not
becoming more dependent upon imported sources,
and leveraging his ability to use only US honey
in order to increase his own market penetration
among increasingly "food-scare frightened"
US consumers.
In the event that a bottler does not wish to
endorse his own county's product over foreign
imports, that will clearly demonstrate their
loyalty to their countrymen. They should be
considered "foreign honey importers", not worthy
of being sold even a single drum of US honey.
In the event that none of the existing bottlers
wish to endorse US honey, please recall that
NAFTA or not, there is no law that forces anyone
to sell anything to anyone, and one can demand
any condition (no matter how unreasonable) in a
contract, as long as the terms break no laws.
Bottling plants are cheap to capitalize, and
a co-op could be formed in a matter of weeks
with sufficient total production to run the
plant 24 x 7 x 365.
Consumer-awareness campaigns could be created
to remind the consumer that buying US honey
insures that friendly, gentle US bees have jobs
and can be around to combat the scary "killer
bees" that uhhh... wait a sec, didn't they come
from somewhere in South America? Brazil? Argentina?
OH NO!!! Don't buy that honey made by those
South American killer bees!!
While the above may seem silly and far-fetched,
one need look no further than the "Got Milk?"
ad campaign to see what the USDA can do when
they are motivated. What do the dairy farmers
have that beekeepers don't? Perhaps it is
"common sense". Perhaps it is "unity". Perhaps
it is a sense of the power of unity.
Of course, those who import foreign honey would be
free to attempt to promote this honey as superior
to US honey. One need look no further than Juan
Valdez and his donkey (the icons of "Colombian
Coffee") to see that such a thing is not only
possible, but can be effective.
I might suggest that beekeepers need to band
together with the dairy farmers, and join
their very effective lobbying efforts, as well
as learn something about packaging, marketing,
and infrastructure. It seems a natural partnership,
since we could name the unified venture "Milk and
Honey". (There are of course, many song lyrics
that use the phrase "the land of milk and honey",
which make radio ads easy.)
> Even to the point that Argentina honey has replaced U.S.
> honey.
Hold on, your e-mail started out by complaining
about low prices paid to you. Are you going to
INCREASE production and lower your prices FURTHER
when you don't like the prices paid now? If so,
the prices you are paid must not be as bad as you
say. If prices are very bad, how might you expand
your production? With lottery winnings?
There is a name for people who sell at a price
lower than their cost of production, packaging,
and shipping. Here in the US, they are called
"Hobbyist Beekeepers".
> U.S. producers must sell their honey so they will
> match Argentina prices.
No, US producers need only match the DELIVERED
price of your honey, FOB somewhere in the US.
They could try a little marketing, and justify
a higher price for US honey, (or at least make
people aware of the actual source of the various
retail brands of honey) just as soon as they develop
the intestinal fortitude to realize that US honey
producers must act in their own best interest, and
start promoting their US-produced product, rather
than tolerate the promotion of "honey" in general.
Every dollar now spent to promote "honey" as a
generic item works against them, since this money
does nothing to differentiate Pure US honey from
blends that contain foreign honey of unknown and
untraceable origin.
>The market continues to drop and beekeepers suffer.
No one forces anyone to sell their honey to
a broker. Co-ops are a well-tested mechanism,
one that works well for many crops. Don't
like your broker? Become one yourself!
> If large US beekeepers decide to get together and import
> Argentina honey, we may avoid our traditional exporters
> and your honey buyers (NHPDA) will lose power because they
> will not find any honey. In other words, large Argentine
> beekeepers get more money for their honey because they sell
> directly to US honey producers. This way neither Burleson
> nor Gamber nor anyone will be able to put more pressure on
> you because the market will be "honeyless".
Why would a producer become an importer? Would
that be cheaper than expanding one's own
production? What about the long-term impact?
Is encouraging imports in the best interest of
any US producer? If large US beekeepers "got
together", would they agree to buy your honey,
or is it more likely that they would work
together to compete with you?
One possible high-risk scenario would be to get
all the producers together and form an
international cartel of producers, just as the
oil barons did. The problem here is getting 100%
participation, and insuring that no one "defected",
as happened with the oil cartel. (Hold on, wasn't
it Argentina that "defected" from the oil cartel?)
> One more thought. China will be back in the market soon.
So, let me see if I have this right - the US
producer's main competition consists of:
a) The perceived home of the "Killer Bees"
b) The home of the "Killers of Teinamein Square"
I would love to create the US promotional campaign
to compete with those two. My mind spins with
the possibilities!
I'd even do it for free, if someone asked me nicely.
James Fischer [log in to unmask]
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