BEE CULTURE - December, 2010 pg. 45-46
- Joe Traynor
Beekeeper Randy Oliver has likened price negotiations for almond pollination to a "high-stakes poker game." The analogy is apt and the "game" plays out every year between October and February. The players - almond growers on one side, beekeepers on the other - jockey for position as they try to make the best deal for themselves.
Growers are used to negotiating with ag chemical distributors, with large growers enjoying an advantage due to their greater volume. Almond farming, like all of agriculture, has changed significantly over the last 40 years, with small farmers either dropping out or being taken over by large corporations or farm management companies. In the 1960s and 70s, the vast majority of almond-bee contracts were negotiated one-on-one - beekeeper and almond grower. A few such relationships exist today, some of them passed on to the next generation of both almond grower and beekeeper. The most satisfying beekeeper-almond grower relationships are like a successful marriage; they have withstood the test of time based on a mutual respect between parties, with each party trusting the other when it comes time to determine almond pollination prices for a given year and with prices often not set until January.
Such one-to-one relationships as described above are rare in today's world. Beekeepers find themselves talking to a corporate representative who may or may not be in the same position the following year (or the following month). And that corporate representative has a stake in showing the corporation how much money he is saving them on bees. Large almond concerns are very attractive to beekeepers that want to enter the almond pollination game. One-stop shopping allows them to place all their colonies with one grower as opposed to taking the time and effort to hunt up and negotiate with five or 10 different growers. Large corporations attract offers from a multitude of beekeepers with price a major consideration for both grower and beekeeper. The end result is an overall drop in pollination prices as beekeepers compete to place their bees. At first glance, this appears to be a good example of capitalism at work with the price competition benefitting the grower. A lower price, however, inevitably means that bee suppliers will shave expenses in order to make almond pollination profitable; the end result is often a sub-standard product.
In the larger world of business, we see the same type of price pressure that almond corporations apply to beekeepers. Walmart puts constant pressure on the suppliers of goods (including almonds and honey) to cut their prices to the bone. Amazon does the same thing with books, forcing publishers to supply books at rock-bottom prices to the point where many book stores have been driven out of business (and talented, unknown authors remain unpublished because no promotional money is available). Large almond operations that attempt to emulate Walmart and Amazon are missing a major point: a colony of bees is amorphous, constantly changing in strength from one month to the next (and in apparent strength from morning to afternoon). A book remains a book to Amazon and a pound of honey remains a pound of honey to Walmart, just as a five-gallon can of Roundup stays at five gallons no matter what the price.
Here is where the almond game morphs into the murky world of gamesmanship. A good pollination unit for almonds is eight frames of bees in a two-story colony. Eric Mussen has shown a linear relationship between colony strength for almonds and costs to attain a given strength: approx. $120/colony for four-frame strength; $140 for six frames and $200 for eight-frame colonies. (UC Apiaries, Jan-Feb. 2010). Put downward pressure on almond pollination prices and a beekeeper will adjust his input costs accordingly and hope and pray that his colonies will come up to contract standards in February, or if they don't, then hope and pray that he can, as some do, pass that six-frame colony off as an eight-framer and the four-framer as a six-framer. Many beekeepers benefit from the fact that many almond growers don't scrutinize colony strength closely. California counties offer colony strength inspections but counties are short on manpower and can't meet all requests and those they do meet are often done at petal fall rather than first bloom, making it impossible for growers to make adjustments if sub-par colonies are found.
Because a colony of bees can gain two or more frames from first bloom to petal fall, late inspections greatly benefit beekeepers. Almond growers want strong colonies at the beginning of bloom, but few inspections are made at that time. Beekeepers supplying four to six frame colonies at the start of bloom can often receive full payment on a six to eight-frame contract, if inspections are delayed until petal fall. The fact that colony strength evaluation is not a precise science serves to further muddy the price structure for almond pollination. Send five different people out to evaluate colony strength and you may get five different answers. This is particularly true on a warm day during bloom when most bees (four+ frames) will be out working almond blossoms and not accounted for by inspectors. The most accurate evaluation of colony strength during almond bloom would be in the middle of a warm rainy afternoon but county inspectors don't work in the rain. Beekeepers can benefit when growers only flight-check bees; robbing activity around weak hives (possibly from a neighbor's bees) can falsely imply strong colonies.
Grower considerations for almond pollination:
Reliable information is critical when it comes to making good almond pollination decisions. The best source for such information is Project ApisM, www.projectapism.org . At this site you can access The Cummings Report, Dan Cummings' up-to-date postings on the almond and bee status, and The Bee Box, Christi Heintz' bi-monthly column in Almond Facts. Both Dan and Christi have solid credentials in the almond industry and are well-versed in all facets of the bee industry. Eric Mussen's bi-monthly Newsletter, From the UC Apiaries (including the Jan-Feb issue cited above) can also be accessed at the ApisM site, along with many other links. You could easily spend a day at this site.
The 2011 Season: As of November, most almond-bee contracts have been finalized. Contracted prices range from $155 to $180 for eight-frame colonies and $120 to $140 for six-frame colonies. The ruling by APHIS to halt honey bee imports from Australia does not seem to have had much affect on price or availability. Many of these bees, it seems, were used to bolster weaker colonies. That may be an issue later in the Spring.
Almond growers are becoming increasingly aware that beekeepers need to know by September how much money to invest in a Fall feeding program - Fall feeding allows colonies to go into winter with young bees, which in tum translates to more populous colonies in February. Growers that wait until December to finalize bee contracts are looking at a diminished supply of strong colonies. This is what happened in 2010 - the good colonies were spoken for early-on and growers that waited wound up paying top-dollar for sub-par colonies. Many beekeepers feel that investing in a Fall-feeding program is not cost-effective. Besides wearing out expensive queen bees, doubling colony populations via fall feeding means continued expensive sugar and protein feeding right up to almond bloom, and additional feeding after almond bloom to prevent colony starvation. Beekeepers that succumb to grower pressure to lower prices will cut costs and hope that colonies of marginal strength, if inspected at all, will squeeze by the inspection gauntlet.
Some beekeepers, seeing the shortage of almond bees in 2010 and knowing that another 20,000 bearing almond acres is coming on line in 2011 are leaning towards not committing their bees until January, figuring prices will rise in late January, as they did this year. These beekeepers could well be fooled, as the 2010 bee supply was diminished due to drought conditions in many areas in 2009; bee forage conditions in 2010 are much better and as a result, Winter losses should be less. The only remaining question is that item - Winter losses. If they are less this year, as expected there will be an adequate supply. If they continue at the 30% or so of the past few years, the game begins.
Because almond pollination is a major source of income for almost all commercial beekeepers, some beekeepers are expanding colony numbers. On the demand end, a number of almond growers are cutting back from two to 1.5 colonies per acre, so the total demand may be less than in 2010 in spite of increased acreage. The true supply-demand picture for 2011 almond bees won't come into focus until sometime in January, after Winter bee losses have been tallied. Both growers and beekeepers that wait until January to finalize bee arrangements are gambling that the supply-demand equation will tilt in their direction, an expensive gamble if things don't break their way.
Joe Traynor is a pollination broker based in Bakersfield, California and a frequent contributor to these pages.
- Joe Traynor
Beekeeper Randy Oliver has likened price negotiations for almond pollination to a "high-stakes poker game." The analogy is apt and the "game" plays out every year between October and February. The players - almond growers on one side, beekeepers on the other - jockey for position as they try to make the best deal for themselves.
Growers are used to negotiating with ag chemical distributors, with large growers enjoying an advantage due to their greater volume. Almond farming, like all of agriculture, has changed significantly over the last 40 years, with small farmers either dropping out or being taken over by large corporations or farm management companies. In the 1960s and 70s, the vast majority of almond-bee contracts were negotiated one-on-one - beekeeper and almond grower. A few such relationships exist today, some of them passed on to the next generation of both almond grower and beekeeper. The most satisfying beekeeper-almond grower relationships are like a successful marriage; they have withstood the test of time based on a mutual respect between parties, with each party trusting the other when it comes time to determine almond pollination prices for a given year and with prices often not set until January.
Such one-to-one relationships as described above are rare in today's world. Beekeepers find themselves talking to a corporate representative who may or may not be in the same position the following year (or the following month). And that corporate representative has a stake in showing the corporation how much money he is saving them on bees. Large almond concerns are very attractive to beekeepers that want to enter the almond pollination game. One-stop shopping allows them to place all their colonies with one grower as opposed to taking the time and effort to hunt up and negotiate with five or 10 different growers. Large corporations attract offers from a multitude of beekeepers with price a major consideration for both grower and beekeeper. The end result is an overall drop in pollination prices as beekeepers compete to place their bees. At first glance, this appears to be a good example of capitalism at work with the price competition benefitting the grower. A lower price, however, inevitably means that bee suppliers will shave expenses in order to make almond pollination profitable; the end result is often a sub-standard product.
In the larger world of business, we see the same type of price pressure that almond corporations apply to beekeepers. Walmart puts constant pressure on the suppliers of goods (including almonds and honey) to cut their prices to the bone. Amazon does the same thing with books, forcing publishers to supply books at rock-bottom prices to the point where many book stores have been driven out of business (and talented, unknown authors remain unpublished because no promotional money is available). Large almond operations that attempt to emulate Walmart and Amazon are missing a major point: a colony of bees is amorphous, constantly changing in strength from one month to the next (and in apparent strength from morning to afternoon). A book remains a book to Amazon and a pound of honey remains a pound of honey to Walmart, just as a five-gallon can of Roundup stays at five gallons no matter what the price.
Here is where the almond game morphs into the murky world of gamesmanship. A good pollination unit for almonds is eight frames of bees in a two-story colony. Eric Mussen has shown a linear relationship between colony strength for almonds and costs to attain a given strength: approx. $120/colony for four-frame strength; $140 for six frames and $200 for eight-frame colonies. (UC Apiaries, Jan-Feb. 2010). Put downward pressure on almond pollination prices and a beekeeper will adjust his input costs accordingly and hope and pray that his colonies will come up to contract standards in February, or if they don't, then hope and pray that he can, as some do, pass that six-frame colony off as an eight-framer and the four-framer as a six-framer. Many beekeepers benefit from the fact that many almond growers don't scrutinize colony strength closely. California counties offer colony strength inspections but counties are short on manpower and can't meet all requests and those they do meet are often done at petal fall rather than first bloom, making it impossible for growers to make adjustments if sub-par colonies are found.
Because a colony of bees can gain two or more frames from first bloom to petal fall, late inspections greatly benefit beekeepers. Almond growers want strong colonies at the beginning of bloom, but few inspections are made at that time. Beekeepers supplying four to six frame colonies at the start of bloom can often receive full payment on a six to eight-frame contract, if inspections are delayed until petal fall. The fact that colony strength evaluation is not a precise science serves to further muddy the price structure for almond pollination. Send five different people out to evaluate colony strength and you may get five different answers. This is particularly true on a warm day during bloom when most bees (four+ frames) will be out working almond blossoms and not accounted for by inspectors. The most accurate evaluation of colony strength during almond bloom would be in the middle of a warm rainy afternoon but county inspectors don't work in the rain. Beekeepers can benefit when growers only flight-check bees; robbing activity around weak hives (possibly from a neighbor's bees) can falsely imply strong colonies.
Grower considerations for almond pollination:
- Work towards a long-term relationship with one or more bee suppliers.
- Finalize bee contracts by September. Without supplemental Fall feeding, most colonies will be sub-par in February.
- Pay enough so that beekeepers can invest in building strong colonies.
- Trust but verify. Either look at your bees with the beekeeper(s) or hire a knowledgeable inspector. If you have the county inspect, get on their list early. Let your beekeeper know when inspections will take place.
- Make sure your crop insurance specifies frames of bees per acre, not colonies per acre (a meaningless term).
- Communicate with your beekeeper from December on to make sure your bees are in good condition when your almond trees start blooming.
- Work towards a long-term relationship with one or more growers.
- Finalize contracts by September.
- Initiate a Fall-feeding program in September (if natural forage is unavailable)
- Charge enough to cover expenses, especially supplemental feeding expenses.
- Secure a back-up bee supply to cover excessive Winter losses. Non-delivery is the surest way to lose an almond contract.
- Take your grower(s) with you to look at your bees (or have your broker do this); or agree on an independent inspector. Know when your bees will be inspected.
- Try to exceed your contract requirements; for a six-frame contract, aim for eight frames; for an eight-frame contract aim for 10 frames. Success here will render moot any possible complaints on colony strength.
Reliable information is critical when it comes to making good almond pollination decisions. The best source for such information is Project ApisM, www.projectapism.org . At this site you can access The Cummings Report, Dan Cummings' up-to-date postings on the almond and bee status, and The Bee Box, Christi Heintz' bi-monthly column in Almond Facts. Both Dan and Christi have solid credentials in the almond industry and are well-versed in all facets of the bee industry. Eric Mussen's bi-monthly Newsletter, From the UC Apiaries (including the Jan-Feb issue cited above) can also be accessed at the ApisM site, along with many other links. You could easily spend a day at this site.
The 2011 Season: As of November, most almond-bee contracts have been finalized. Contracted prices range from $155 to $180 for eight-frame colonies and $120 to $140 for six-frame colonies. The ruling by APHIS to halt honey bee imports from Australia does not seem to have had much affect on price or availability. Many of these bees, it seems, were used to bolster weaker colonies. That may be an issue later in the Spring.
Almond growers are becoming increasingly aware that beekeepers need to know by September how much money to invest in a Fall feeding program - Fall feeding allows colonies to go into winter with young bees, which in tum translates to more populous colonies in February. Growers that wait until December to finalize bee contracts are looking at a diminished supply of strong colonies. This is what happened in 2010 - the good colonies were spoken for early-on and growers that waited wound up paying top-dollar for sub-par colonies. Many beekeepers feel that investing in a Fall-feeding program is not cost-effective. Besides wearing out expensive queen bees, doubling colony populations via fall feeding means continued expensive sugar and protein feeding right up to almond bloom, and additional feeding after almond bloom to prevent colony starvation. Beekeepers that succumb to grower pressure to lower prices will cut costs and hope that colonies of marginal strength, if inspected at all, will squeeze by the inspection gauntlet.
Some beekeepers, seeing the shortage of almond bees in 2010 and knowing that another 20,000 bearing almond acres is coming on line in 2011 are leaning towards not committing their bees until January, figuring prices will rise in late January, as they did this year. These beekeepers could well be fooled, as the 2010 bee supply was diminished due to drought conditions in many areas in 2009; bee forage conditions in 2010 are much better and as a result, Winter losses should be less. The only remaining question is that item - Winter losses. If they are less this year, as expected there will be an adequate supply. If they continue at the 30% or so of the past few years, the game begins.
Because almond pollination is a major source of income for almost all commercial beekeepers, some beekeepers are expanding colony numbers. On the demand end, a number of almond growers are cutting back from two to 1.5 colonies per acre, so the total demand may be less than in 2010 in spite of increased acreage. The true supply-demand picture for 2011 almond bees won't come into focus until sometime in January, after Winter bee losses have been tallied. Both growers and beekeepers that wait until January to finalize bee arrangements are gambling that the supply-demand equation will tilt in their direction, an expensive gamble if things don't break their way.
Joe Traynor is a pollination broker based in Bakersfield, California and a frequent contributor to these pages.
