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Profitability of honey production depends on weather

27 May 2019, 03:37 ( 3 Months ago)

DF-Xinhua Report
Press Release Photo: Suomen mehiläishoitajain liitto ry.

The summer weather influences the honey crop, and the crop volume varies year by year. These are issues that influence the profitability of beekeeping: the net profit ratio for a bad year was close to zero, while profitability increased to 0.58 during a good year, according to the Natural Resources Institute Finland (Luke).

The results for 2016–2018 are published now.

The honey crop of 2016 was extremely poor. As most of the profit in beekeeping comes from the sales of honey, the gross profit remained low in 2016, at only €8,700.

The year 2018 was a better year in terms of the production of honey, and the gross profit amounted to €16,900. In addition to honey, beekeepers accrued income from the sales of pollination services and other bee-related products.

“The volume of pollination services provided by beekeepers is on the increase, which is why pollination service will be included as a separate item in the profitability accounting results as of 2018,” said Marja Vilja, a researcher at Luke.

In beekeeping, the share of national aid has remained at less than eight per cent of the gross profit, which is clearly less than for agriculture on average.

In 2018, the average costs arising from the production of honey were €21,300. The largest cost items in beekeeping are materials and supplies, as well as the beekeeper’s own work. The share of supplies remained at around the same, approximately €3,500, in 2016 and 2017, while in 2018, the cost of supplies increased to €5,700.

On average, beekeepers worked 580 hours in 2018, which means that their pay claim costs were €9,300. The working hours include the time spent caring for the bees, as well as the processing, packaging, sales and marketing of honey. The average working hours per one beehive were eleven in 2017 and 2018, and an hour less in 2016.

Entrepreneurial income, which is the compensation for the beekeeper’s work and equity, is the sum that remains when the costs are deducted from the profit. In 2016, the entrepreneurial income was only €550, compared to €5,990 in 2018. Profitability factor, which represents relative profitability, is calculated by dividing the entrepreneurial income by the total sum of salary and interest requirements.

“In 2016, the profitability factor was close to zero or 0.06. In 2017, the profitability factor increased a little, to 0.15, and it further increased to 0.58 in 2018. This means that in 2018, the accrued interest on equity was 2.9% and the compensation for one hour of work was €8.5. Meanwhile, the beekeepers did not receive any compensation for their work or equity in 2016,” Vilja said.

The production of one kilogram of honey cost €23.50 in 2016, and the corresponding profit was €12.30. In 2018, the production costs were €9.80 and the profit was €7.80. The profit has never fully covered the costs from production. The share of costs to be paid in cash is some 40%. The rest are deferred costs, including depreciation and costs arising from equity and own work.