Beekeeping Economics

[edenhillapiaries]

Hello All,

I am in my second year of beekeeping and want to expand my operation to make some extra income. Does anyone know of a Web site that has some good info on making a business plan and what each hive can bring in for income? This would be helpful for me to plan for next year. I am going to take any cash made from honey sales and put it back into the business. Any ideas would be helpful.

Thanks,
Jason

[Countryboy]

Does anyone know of a Web site that has some good info on making a business plan and what each hive can bring in for income?

Hive production is highly weather (and location) dependant. Talk to the Big Man upstairs for the best advice on weather. You can place yards in areas with proven flows.

How you sell your honey affects your income too. Are you planning on selling 5 gallon buckets (or 50 gallon drums) or are you going to be selling 16 ounce bottles for full retail price?

Do you want to sell honey or bees or pollination? A hive may produce more income by selling bees than by selling honey. Other years honey may pay better. Having some diversification will help you weather bad years, and enable you to take advantage of opportunities too.

Decide what you want to achieve first. I have heard to double your operation every year at most. A sales and marketing plan is just as important as hive management - dead bees don't make honey and unsold product doesn't make dollars.

[BigDaddyDS]

What each hive can bring in in income is highly variable from beekeeper to beekeeper!

Where do your interests lie?

If it's making honey, that's fine. But know going in what your yards will produce on an average year, and how many hives your particular yard will support. Take your average production, reduce it by a reasonable amount (due to drought, poor flow, die offs, etc.), and multiply it by the amount you'll sell it for. Afterwards, subtract out cost for bottles and labels. What's left is your labor.

If you like grafting and getting into honeybee genetics, you may want to look into making nucs and queens for sale. Use your experience in knowing how many splits you can reliably make in a single season, times your survival rate, and then multiply that by how much you're going to charge per nuc. For queens, you'll do similar. Afterwards, you'll back out your costs, and again, what's left is your labor, which you may decide to put back into the business.

Maybe you enjoy woodworking? Number of boxes X Percentage you can sell X Price - Cost (and waste) = Your income.

You get the idea...
Product amount X Success rate X Price - Costs to produce = Your profit, which could go to your pocket or back into the business.

Basic stuff, I know, but it's dependent on your individual situation and interests.
DS

[Roland]

As the proprieter of a nearby beekeeping supply house in..... (rhymes with Greaseville) was apt to say "Beekeeping is expensive, how many hives can you afford to keep?" As the previous posters have accurately stated, weather and available plants can vary in unpredictable ways. The variance at any one location however is usually not greater than 50 percent either way, if my memory is right. Duh!!!! must be getting old. Forgot the 2 years when we paid 60 dollars for bees, labored all summer, put gas in the truck, they made NO honey, fed them for winter, and 95 percent died.

The point is, with CCD, you can loose everything. Be prepared. SO, how deep are your pockets? How many hives CAN you afford?

Roland

[edenhillapiaries]

Good points all. I plan on focusing on honey production and pollination at some point. I am already doing pollination at this time, but it is for bees. Let me explain. I have a friend who grows apples and cherries who has always wanted bees. He buys me nucs in exchange for pollination on his farm. The cost of a nuc is around the same as the cost of a hive for pollination. By doing this is may not get paid for the pollination that I provide to him, but I do get the bees that I need to expand. He has also provided equipment that he had and the use of trucks, forklifts, etc.

Next year, depending on how well I overwinter, I am plan on trying to pollinate for some other folks I know. I work as a crop consultant so I know quite a few farmers. As far as honey goes, so far I have been bringing my supers to a beekeeper I know for extraction. He charges me $.20 and sells the honey wholesale. I know that this is not the most profitable way to sell my honey, but I don't have the cash for an extracting setup. I want to look into a way of bottling my honey as I know some folks where I could sell it.

What I am learning is that it is expensive to get into beekeeping, but this is something that I have always wanted to do. The most important thing that I need to do this year is to keep good records. So far I have not been so good at this. For the next few years I plan to invest any income that I make from the bees and I hope that they can bee self supporting.

Thanks,
Jason

[Tom G. Laury]

I heard there is a lot of money in bees, is this so?

Yes it is. The problem is getting it back out of them.

[rainesridgefarm]

If you do the work yourself and you know what you are doing you can make your monry back the first year. it costs me about $37 per hive per year to run my bees. if you add up your costs and do it correctly it is a win.

[Keith Jarrett]

I heard there is a lot of money in bees, is this so?

Yes it is. The problem is getting it back out of them.

lol...lol....:)

[Wee3Bees]

How do you get to a point where you have $1 million worth of bees? You start with $2 million worth ... :rolleyes:

[carrojb]

Jason you might want to take a look at an auction that was held this past week in Wisconsin for a guy with around 1,100 hives who ran into health issues.
The United Realty / auctioneer guy will be glad to share the prices- everything sold. Hives full of bees, honey and equipment.
This should give you a floor value.
The price of quality honey per drum is out there and varies per market.
Only you will know your expenses from experience and your specific operating expenses.
Hope this helps.

[Paraplegic Racehorse]

If you're asking for paperwork...

The British Columbia division of Agriculture and Lands has an example beekeeping business plan.

http://www.agf.gov.bc.ca/busmgmt/bus_guides/beekeeper_guide.htm

[edenhillapiaries]

Thanks,

That info is helpful. It is what I am looking for. Now I need to start keeping better records and data (production per hive, etc.)

Thanks Again,
Jason

[jean-marc]

Now whatever numbers you come up with, then make sure you double the expenses and half the revenue. If it pencils out, you have a chance of making it.

Jean-Marc

[Tom G. Laury]

The funny thing is Jean Marc is not kidding or exaggerating.

[edenhillapiaries]

As a matter of fact, I do believe you guys. There has been a lot more money going out then coming in. Much of it has to do with the fact that I am just starting out and have to purchase equipment, etc. as I go along. Up until now I have not been keeping track of it as a business, but that is going to (and has to) change.

This is why I posted the question about beekeeping economics. Just starting out I believe one would have more expenses because of having to buy frames, foundation, boxes, etc. It is also hard to judge the average honey production per hive as the majority of them are drawing out new foundation this year. Correct me if I am wrong, but I believe that drawing comb will really cut down on honey production. That is why I was trying to get an idea of about how much honey one can expect an average hive to produce. I am well aware that there is no "average" hive or "average" year as I work in commercial fruit production in Northern Michigan. Beekeeping is subject to the same ups and downs that farming is, but if you ask an apple or cherry grower what he expects to average per acre he can tell you. While every region is different, I was hoping to get some idea of what it takes to run an operation.

Starting this winter I will be keeping a detailed account of my expenses and profits (if there are any) so I can judge just how far I want to go with this thing. The thing is that, just as with farming, if you love what you do and can make a little (or even break even) I believe that you are far ahead of the majority of the public.

Jason

[Paraplegic Racehorse]

Well... first off, you can get a pretty good idea of what your average yields will be. Ask your local bee-club, instead of here, though. Too many regions represented here. Also take into consideration that most of your medium-sized beekeepers (sideliners?) can usually break down their average yield per yard and that individual yards - which may be separated by as little as two or three miles - can have wildly different averages. :(

If you've kept all your receipts, so far, you're on good track. Just change the way you recorded them into a more businesslike format. Be sure your receipts are all together in one place.

You could possibly save some money by making your own woodenware, though you then have to consider your labor as an "expense" - but this can be all off-the-books expense so you can claim break even or profit earlier than with purchased equipment. Most small business owners work horrendous hours and, after taking it all into account, actually earn much less than minimum wage. This seems particularly true in agribusiness.

[John Smith]

My Tips, after agreeing with all the above:

Don't even consider leaving your day job.

Always keep at least one working wife.

The only way you can justify beekeeping, is by forgetting the Dollar currencies, and make honey your money.

Cheers,

JohnS

[Keith Jarrett]

Always keep at least one working wife.



lol.....

[BMAC]

Dont go in the red. Never borrow money to expand......

[Demo Spec]

i see your point, and another rule is never borrow from family, but there are execptions to every rule, as i did exactly that, used my mother's cc to jump start my biz, i only did cause i knew 100% i could pay the money back and i didnt really have a choice

[edenhillapiaries]

I agree with your point about not borrowing to expand. I had to do just that this year, but not too much. I needed more supers and frames than I had planned on since I caught quite a few swarms. I just could not pass up the swarms and I figured that whether they make it or not they will draw out foundation for me. That is a resource that is in short supply. The money I will make from my honey this year will more than cover what I borrowed. What cash is left over will all go back into expanding.

One thing to clarify here is that I am just wanting to do this as a sideline business. I have a great job in agriculture that I love. My job also benefits my plans for beekeeping as I have many great contacts. My work with local farmers opens many doors. I have access to some great spots for apiaries, pollination opportunities, and outlets for the finished product (farmers markets, stands, etc.).

I appreciate the input from you folks as you have been, and are, there. One question though. Some have suggested making your own equipment. Is this really the way to go? Have any of you folks bought used equipment? I always hear that one should not do that, but when you talk to guys in the business they have all done it. The bulk of my woodenware was used. I cleaned it up, scorched the inside of the boxes, and painted them. Have not, and will not, buy used frames and foundation. Not worth it. What do you folks think?

Jason

[BMAC]

Personally I buy used equipment as that's what I can afford. i also however have a system in place to replace 5% of frames/foundation per year. I would advise against building your own. As I would never buy used built at home equipment. I dont care how good the person believes they are at building standard hives, I have never seen a standard home made hive body.

[swarm_trapper]

i dont know any commercial beekeepers that cut out there own boxes and frames it jsut is too much hassle. I do not, i would rather run a few more hives in the time i save by buying my pre cut wood.

[loggermike]

I would NOT recommend buying used equipment. Once you learn to spot AFB you will see plenty of it in the piles of dead equipment people have sitting out behind the buildings.I bought used stuff cheap when I was starting(and ended up burning plenty of it). Now you couldn't give me that equipment.
Building your own is fun and economical IF you have plenty of time,little money,a source for cheap wood, and are good with woodworking. But there is a point reached where its better to buy pre-cut.
As far as the economics of beekeeping,I have always shown a profit:shhhh:
As stated try to avoid borrowing too much.The bankers will help you with this:D
Keep your expenses down -Don't buy what you don't need.

There is a little saying about business:
If your OUTgo exceeds your INcome,
Your OVERhead will be your DOWNfall.

[jean-marc]

When I first started , a friend and myself built frames. Big mistake evev with free wood. Our frames turned out better than the ones that can be bought, friend was/is a perfectionist with skills. The mistake was, it's just not worth it time wise. I now purchase everything assembled dipped , ready to go on hives. It's a huge time saver. I tend to have a little extra on hand, because it costs so much more if you don't have it when you need it.

I borrowed against the house when I started. Took awhile to get out of the hole, but it allowed me to gain momentum in the hive numbers. I mean what's the point of taking 20 years to get from 2 hives to say 1000 and having to work fulltime along the way, just to say you are debt free. I dunno, borrow money and if things work out then you can maybe do it in 5 years.

I guess the advantage of slow growth is you can gain experience and you can work out your system. Once you think you have it figuredf out then I would encourage aggressive growth to get where you want to go and take advantage of opportunities.

As an aside second load of bees returned from canola pollination last night. It was very hot
and consequently the bees were even hotter. It's kinda neat when nets are pulled off and the bees only desire is to inflict a slow and painfull death upon you. They exploded upwards and sideways yesterday. It's not a good sign if you are afraid of bee stings.

Jean-Marc

[BruinnieBear]

There is a little saying about business:
If your OUTgo exceeds your INcome,
Your OVERhead will be your DOWNfall.

Great words to live by, whether it's in keeping bees or life in general.

Bankers don't care. They live off you if you succeed or fail. You see it every day in the papers.

BB

[Yuleluder]

I would also recommend learning how to graft and raise your own queens. One of my biggest expenses was purchasing queens for expansion. If you can raise your own queens you will be able to save alot of money. Of course you will always want to bring in new genetics, but if you can graft then all you will need is a couple of breeders every couple of years.

I started out about three years ago and have had my ups and downs, but the money has started to trickle in this year. Next year should be better, but as with any business you never know what is on the herizon. Entrepreneurship takes the right kind of person, you have to be bold and willing to fail. Take the good with the bad, and if you fail, well at least you made the effort and hopefully that experience will help you throughout life.

[Countryboy]

i dont know any commercial beekeepers that cut out there own boxes and frames it jsut is too much hassle. I do not, i would rather run a few more hives in the time i save by buying my pre cut wood.

If you are a commercial operator, and you find a really good worker, making boxes and frames can be an easy way to give them a steady check during the slow times. If you can break even making your own stuff, and you can keep that good worker for another year - you will be further ahead than buying woodenware and risking the worker quitting during the winter to go find a more dependable paycheck.

For the hobbyist, I would say to build your own if you have more time than money. If you have plenty of time (or just enjoy woodworking and saying you made it yourself) and money is tight, make your own. If your time is limited, I would say to buy your woodenware.

As for buying used stuff, I recommend people know the person they are buying from. I got my start in beekeeping with used stuff. A coworkers elderly dad had a stroke and could no longer take care of his bees. I pretty much got all the small stuff they hadn't sold yet and the last 3 hives. Everything was well cared for. If you run into a situation like this, I wouldn't be afraid of buying the stuff. If it is stuff at a garage sale, I would be more cautious.

[edenhillapiaries]

From what I can tell making my own equipment is out. Never wanted to try it in the first place. As was pointed out your time is worth something. I have a job that is very demanding at times and I barely have time to get all the things done that I need to no matter building equipment (except for cutting out migratory style lids from plywood). As was stated above I have turned down free homemade supers, etc. Never the right dimensions. I have done the math and it is even worth it to buy assembled frames with foundation (or one piece) rather than putting together my own. I don't think that I would ever buy assembled supers though. Seems like it is worth it to do yourself.

One thing mentioned above that I do want to try is raising my own queens. Here in Northern Michigan no one that I am aware of raises queens, so when ever I need them I have to order them from California,etc. How many folks go this route? It would seem to be a great way to save some cash, and make some by selling them if you get good, and looks to be quite rewarding.

Thanks again for all of the replies. It is great to get feedback from so many folks with so much combined experience.

Jason

[swarm_trapper]

country boy,
I am a smaller operator, but just building enough precut frames and boxes through the winter keeps my guy busy enough, he put together 7500 frames and 750 supers i couldn't even imagine cutting all that out, and it seems like i have figured it our before and on boxes it really was no cost savings for me to cut them out mabe i just couldnt find cheap baords

[loggermike]

Last time I did the math on labor to assemble frames vs. buying Dadant pre-assembled,it was really close.So one could go either way and be ok, time permitting.

I like Jean-Marcs comparison of ways to develop a bee business. I guess it comes down to how much do you want to risk to get where you want to be.When I was younger ,I wanted to jump in with both feet.But the bankers were not sympathetic to my plans (young ,broke and no credit). So I went the long slow route.
So, how lucky do you feel?:thumbsup:

[cheezer32]

Alot of the assembling frames/cutting them out depends on what equipment you have to do the job, when i cutout frames i have 3 tables saws (each set to make a diffrent cut), a planner, jointer, and a routing table... I know the cut lengths/sizes by memory which makes it quick to change. I also buy my wood from the amish, where 3 boards from a pickuptruck load will in essense pay for the hole load (if you bought it somewhere else ie lowes homedepot.) To assemble the frames for me i think the easiest way is to lay 100 top bars in a row go through and glue the side bars on, then go back with a dab of glue on the other side. Drop the end bar on the with a nail gun you can quickly just go down the one side of the whole row, makes things go quicker the longer your line of frames the more efficient it is. This is the best way so far i have found.

What tricks/tips have you learned for the people who DIY??

[fat/beeman]

I would try to find a commercial beekeeper to go work for I did it 35 yrs ago and its a learning experience. and then decide if you still want to go into it big.
you will never get rich maybe if your lucky you eat reg.
Don

[edenhillapiaries]

Don,

That is a great idea, but I don't want to and can't give up my day job. I have a job that pays pretty well, it's in agriculture so I will never get rich doing it just like beekeeping, so I want to do the bees as a sideline. I have offered to help a commercial beekeeper that I know, the one who extracts my honey, but he never seems interested. The largest bee operation in the area, where I get nucs from, does not have the time to mess with newbies. Also seems like one of the owners does not want to see any competition in the area. Seems a little silly to me as I will never keep the 3000+ hives that he does.

We not really have an active bee association in the area so it makes it hard to find a mentor. I do know other beekeepers who i can ask questions of and bounce ideas off of. Still not the same as tagging along. I will keep trying to find someone as I would love to get some insight into this business and maybe avoid some mistakes (I have made a few this year but I am learning from them).

Thanks,
Jason

[jean-marc]

Like most commercial probably already know, 1 is too many and 1000 is not enough. Get more and go for it. You've got a great advantage in that you know many area farmers. Yards and contracts just by asking and mentionning you've got bees for rent. So of course commercial guy doesn't seem overly enthusiastic. Just do it, if things don't work out or you don't it then sell out afterwards. Spend money on acquiring beehives. They are the ones that help earn the money. The rest of the stuff like extractors etc come later, when you absolutely must have and you've decided you are staying in this no matter what. That kind of specialized equipment can be harder to sell. Good bees are never a problem to sell and you can usually get a fair to good price , at least overhere. Good luck.

Jean-Marc

[edenhillapiaries]

Good points Jean-Marc. I have told some of my clients (fruit farmers) that I keep bees and you are right I would have no problem getting contracts or yards. In fact it is a client/ friend who has been helping me get started. He buys nucs for me and I put them out for pollination. So far has worked well for both of us.

The guy who has been extracting for me sells the honey through Sue Bee. This has worked out just fine so far, but i would like to sell some in bottles. I am thinking of paying him for the extraction as usual but then taking the honey and bottling it myself. I have a friend who does maple syrup who has a Kelley bottler. What else would one need to bottle some honey? His place has already been inspected for maple syrup production. Would I need to have it inspected again for honey?

I do appreciate all the help and advice from the folks on the list.
Thanks,
Jason

[wfarler]

To become worth a million dollars in beekeeping you first start with 2 million dollars. Eventually, through bad luck, weather, mites, small hive beetles and the price of honey you can make it to one million.

[Ian]

>>Last time I did the math on labor to assemble frames vs. buying Dadant pre-assembled,it was really close.So one could go either way and be ok, time permitting.


Thats the way I look at it,
Assembling frames is one good way to keep hired guys busy during a slow time, then at least your time spent during the slow time is going towards a worth while project,