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  1. #1
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    Jan 2014
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    Toronto, Ontario, Canada
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    Default Pollination service rental rates

    Hello all,

    I am an undergraduate student at the University of Toronto, writing a research paper about honey bees and the economic affects of their population declines and pesticide usage and am in dire need of some data.

    The USDA NASS has been somewhat helpful in providing me with state-by-state data about honey production, crop production and other such metrics. But I have not been able to find state data of the price of bees, i.e. the price to buy a colony and the price to rent colonies to farmers. Does anyone know where I could get this information? I am sure it must be out there.

    Any help anyone can give me will be very greatly appreciated.

    Thanks in advance,

    Ajay

  2. #2
    Join Date
    Apr 2005
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    Salem, Oregon
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    965

    Default Re: Pollination service rental rates

    Quote Originally Posted by ajay.sharma View Post
    But I have not been able to find state data .......the price to rent colonies to farmers. Any help anyone can give me will be very greatly appreciated.

    Ajay
    I'll just speak for myself, but we do not "rent" hives.
    We provide pollination services.
    So if an almond orchard is 300 acres and requires 2 hives per acre, we place 600 hives and price our pollination services at a per-hive cost.
    That is a far cry from "renting hives".
    My contract has this exact language:

    "The grower agrees not to touch, open, move, disturb or otherwise harass any beehives without the express written permission of the beekeeper.
    The cost of the destruction of beehives due to any vandalism, movement, theft or relocation by trespassers, friends, family, the grower, agent or employees of the grower shall be borne by the grower and/or property owner at the rate of $250.00 per hive So, PLEASE for your own safety and fiscal liability and responsibility do not touch the hives in any manner."

    Does that language sound like what you would expect if you rented a car, or an air compressor?
    Would you rent something that you were not allowed to touch?

    Now, maybe there are beekeepers that "rent" hives and more power to them.
    We do not.
    We provide strong healthy hives along with scientific management program for them while in each crop.
    Our charges are based on hive numbers.
    Hope that helps.
    I have exactly ONE hive more than you.
    That makes my opinion beyond question.

  3. #3
    Join Date
    Jan 2005
    Location
    Hamilton, Alabama
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    1,212

    Default Re: Pollination service rental rates

    Harry, While I agree with your intent, it does not help with the information requested.

    ajay, pollination pricing depends to a huge degree on the economic benefit to the grower (almond, apple, blueberry, etc), benefit to the beekeeper in terms of a honey crop, and how difficult it is to provide the bees. Almonds require pollination at a very early time of year, will not produce a crop without pollination, have a relatively high market value, do not provide a good food source for bees, and consume a huge amount of beekeeper resources to prepare and provide pollination services. For these reasons, almond pollination is based on frames of brood in the colony. A typical colony will be priced about $150 in almonds this year. Current demand looks to be in the range of 1,000,000+ colonies of bees moving into the almonds and staying a few weeks from roughly Feb 1st to Feb 28th. $150,000,000 per year for almond pollination is well into the range of big business. It is expected that almonds will require about 2 million colonies of bees yearly within the next 10 years.

    The cost of a colony of bees as noted by Harry is in the range of $200 for hardware plus the value of the bees. Then there are associated costs such as trucks for transport, labor for maintaining the colonies, feed to build populations of bees out of season, etc.

    Pollination here on the east coast is not such a developed business, but blueberry pollination is a common contract that typically brings in about $70 to $80 per colony. There are also a few beekeepers who do apple pollination for similar prices. Citrus is an interesting counter example. As a crop, citrus does not require pollination but just happens to be an excellent nectar source. For this reason, beekeepers will often move colonies into citrus in Florida just to gain access to the honey crop. These bees are then often transported up the east coast for pollination as the season progresses.

    One huge factor affecting beekeepers is varroa mites which can decimate a colony of bees. We also have problems with Colony Collapse Disorder which can wipe out 3/4 of a beekeepers bees in a matter of days. This has wiped out several beekeepers over the last 10 years.

    I've kept this on the simple side so other beekeepers can contribute detail and more accurate numbers.
    DarJones - 44 years, 10 colonies (max 40), sideliner, treatment free since 2005, 11 frame broodnest, small cell

  4. #4
    Join Date
    Feb 2006
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    Herrick, SD USA
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    Default Re: Pollination service rental rates

    Ajay: You might want to read through the pollination prices "sticky" atop the commercial forum.
    "People will generally accept facts as truth only if the facts agree with what they already believe."- Andy Rooney

  5. #5
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    Brasher Falls, NY, USA
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    Default Re: Pollination service rental rates

    Quote Originally Posted by Fusion_power View Post
    Pollination here on the east coast is not such a developed business,
    Is that really how y'all refer to Alabama? As "the east cost"?

    All anyone will get from our own personal data is anecdotal information at best. If the OP can't get what is wanted from NASS then he should contact each State and ask of someone in the Dept. of Ag what pollination in their State runs.

    Here in NY apple pollination runs from the low $50.00 range up to $65.00, $70.00, and a little more perhaps. What beekeepers get on other crops I don't know. I wouldn't place hives for pollination for less than $65.00 per hive.
    Mark Berninghausen To combat Ebola, please consider supporting http://www.doctorswithoutborders.org


  6. #6
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    Mar 2012
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    groveton tx
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    142

    Default Re: Pollination service rental rates

    You don't claim the income as rental income???

  7. #7
    Join Date
    Jan 2014
    Location
    Toronto, Ontario, Canada
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    4

    Default Re: Pollination service rental rates

    HarryVanderpool:
    Perhaps then it might be more accurate for me to say that beekeepers provide pollination services for rent rather than the colonies themselves.
    The extract from your contract is very interesting, it also raises a few questions. As you (beekeepers) own your hives and are not liable for damage to the colonies when they are 'in business', what about the bees? What contract do you have relating to pesticide usage? What about adjacent farms that also may use pesticides but cannot be held responsible for damage?

    And of course, thanks for this reply and any future replies as well.
    Last edited by ajay.sharma; 01-10-2014 at 09:36 PM.

  8. #8
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    Jan 2014
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    Toronto, Ontario, Canada
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    4

    Default Re: Pollination service rental rates

    Fusion_power:
    So from my understanding, the price of bees imposed by beekeepers depends on -the type of crop, -the amount of cropland to pollinate and hence the number of colonies needed, -fixed costs such as maintenance/replacement, -variable costs such as transportation/labour and winter feed, -the number of available colonies not threatened by CCD/mites/disease (i.e. the supply of bees), -presence of fertiliser/herbicides/pesticides?

    If I may, I would like to press you further for pricing information. How different are prices (if contracts exist) for honey crops, citrus crops, from other crops like apples/almonds/soybean?
    And how exactly do crop pesticides factor in to your decision making?
    Is there some premium charged for pollinating crops that are also sprayed with pesticides?

    The information you have provided has been extremely informative, and again, thank you very much.

  9. #9
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    Jan 2005
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    Hamilton, Alabama
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    Default Re: Pollination service rental rates

    Ajay, any "price" is a negotiated number based on how much effort is involved for the beekeeper and how much the grower can afford and is willing to pay.

    I do not normally do pollination as a business, but the last time I did I charged $25 per colony. I had to move the bees less than 5 miles, the location they were moving to was nearly ideal, and I was moving them to help out a personal friend. The reason they were so cheap is because he let me leave them there through late fall so I got a crop of honey as well as the pollination income. You can take this as my way of saying that nobody else on here would provide bees for $25 per colony except possibly under similar conditions.

    The crop itself determines how many colonies are required. A general number is that one colony per acre is good for most apples, 2 for blueberries, and somewhere between 2 and 4 colonies per acre for almonds. There are standard recommendations in most states for number of colonies for each crop. For example, Red Delicious apple requires pollen from a different variety of apple. This results in a higher recommendation for number of colonies per acre than most other apple varieties.

    Pollination contracts are only for crops that require pollination. To the best of my knowledge, there are no citrus crops that require bees for pollination though I am aware of at least two varieties of lemon that benefit from pollination by producing larger fruit. Citrus just happens to produce a large quantity of nectar therefore beekeepers place bees in citrus groves to get the honey crop.

    Alfalfa is an example of a crop that only pays pollination fees in some circumstances. Alfalfa is a very good nectar source. Pollination is paid for alfalfa grown for seed because the increase in seed crop is the difference between a highly profitable crop vs a barely getting by crop. The beekeeper just happens to benefit by getting a crop of honey that defrays his expenses for moving bees. I have not heard any recent per colony prices for alfalfa pollination, though I would expect it to be in the $60 per colony range.

    Pesticides are applied to all commercial crops. Beekeepers have to balance out the benefit of selling pollination service against the potential of loss from pesticide spray. Fortunately, most farmers now understand that their livelihood depends on the bees just as much as the beekeeper's does. There are still way too many pesticide poisonings each year. Beekeepers move into almonds a few weeks after the last dormant spray is applied. The almond grower is required NOT to apply any spray that affects bees during the bloom period. The beekeeper has to move the bees out of the orchard just as soon as bloom is over so the grower can resume his spray schedule, also because once almond bloom is gone, there is less forage for bees in an almond grove than in the sahara desert.

    A typical beekeeper on a pollination circuit will do something like move bees to almonds in February, apples in March/April, then move to a honey producing location in the Dakotas in May or June. This gives him income in the range of $150 to $180 from almonds, $70 for apples, then hopefully a honey crop that might add another $100 to the total. Along the way, he will lose 30% of the queens in his colonies and have to replace or combine to maintain viable colonies. He will requeen the colony an average of once each 9 months. He will travel somewhere in the range of 2000 miles.

    I have not experienced colony collapse so can't speak to the effects of losing 2000 colonies of bees in a matter of weeks. Some other beekeepers here have been through that. This pretty much exhausts what I know about pollination so please let others contribute.
    DarJones - 44 years, 10 colonies (max 40), sideliner, treatment free since 2005, 11 frame broodnest, small cell

  10. #10
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    Brasher Falls, NY, USA
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    Default Re: Pollination service rental rates

    Quote Originally Posted by babybee View Post
    You don't claim the income as rental income???
    I don't. One time I got a 1099 from one of my growers and they had the income under Rental and that caused all sorts of Tax problems. Rental Income is taxed differently than income from a contracted service, I believe.
    Mark Berninghausen To combat Ebola, please consider supporting http://www.doctorswithoutborders.org


  11. #11
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    Default Re: Pollination service rental rates

    Rental income is not subject to Fica taxes.
    4 yrs, Peak 14, back to zip, T lite; godfather to brother's 3.

  12. #12
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    Default Re: Pollination service rental rates

    I don't recall the problem it caused, maybe it was a State thing, but I had to get my grower to issue a new 1099 and enter the income under Income. If I remember correctly. What I do know is that Rental Income is not good for me.

    If one earned Rental Income wouldn't that imply owning Rental Property? Apartments?
    Mark Berninghausen To combat Ebola, please consider supporting http://www.doctorswithoutborders.org


  13. #13
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    Default Re: Pollination service rental rates

    Equipment rental would be the other common type. Generally it would be an advantage to declare the income as rental and not have to pay the payroll taxes. Real Estate brokers with rental units have the rental or ordinary income debate frequently. I think the IRS would take a dim view of avoiding SS and Medicare taxes. You might be able to make a case for rental if the hives were picked up at your location and you provided no services at all. Mostly I think you would be saying to the IRS; "come check out my entire return".

    Rental makes a little more sense from the farmer's side, but you did it the sound way in my opinion with the new 1099.
    4 yrs, Peak 14, back to zip, T lite; godfather to brother's 3.

  14. #14
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    Default Re: Pollination service rental rates

    Anyone think of an advantage for the farmer as rental? Trying to puff up material participation is the only reason I can come up with.
    4 yrs, Peak 14, back to zip, T lite; godfather to brother's 3.

  15. #15
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    NE Calif.
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    Default Re: Pollination service rental rates

    Material participation is the key to whether you can call it hive rental or not. I know some call it rental to avoid self employment tax, but I dont think it will fly in an IRS audit.

    I think like Harry. We are in the bees working them and feeding them before, during , and after bloom. Thats a heck of a lot of material participation.

    But, for the purposes of the OP, the tax considerations are probably not relevant

  16. #16
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    Jun 2010
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    Fresno Ca USA
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    Default Re: Pollination service rental rates

    Quote Originally Posted by Saltybee View Post
    Rental income is not subject to Fica taxes.
    I agree. We treat the revenue as Rental Income to avoid the self employment tax (15%) of Almond pollination works out to about a $26.25 per hive savings!!!

    We have been audited, and several clients have been audited, never had a problem. We just show the IRS the lease agreement with the Grower.
    But it does depend on your particular facts and circumstances.
    California Almond Pollination Services, Inc.
    http://www.almondbeepollination.com

  17. #17
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    Default Re: Pollination service rental rates

    Shouse, curious if the tax factor shows up in the rent negotiations. Using a broker would shield a keeper in support of claiming rental instead of ordinary income. 15% on the bottom line would matter to me. (though health insurance deduction might be lost if not careful)
    It is not that simple I know, A high amount of rental only could be considered as an ordinary business activity and retrigger the self employment tax.
    It would be factor in setting rate with me.
    4 yrs, Peak 14, back to zip, T lite; godfather to brother's 3.

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