Sorry about the audio quality on this clip; somebody once asked if I used a potato as a recording device! I don’t, but I actually think my iphone does it better than my portable digital recorder, which is what I used for this. Anyway, I still think it’s worth listening to this nine minute audio clip from my interview with Mike Palmer in July 2017. He talks a little about the business side of being a bee farmer in Vermont, USA.
Steve: What about the split of your revenue? Is it mostly honey, queens & nucs?
Michael: Yes. When we make a honey crop the revenue from that is huge, and much bigger than the rest. For instance in the last two years I averaged 30 tons. That’s a huge amount of money.
Michael: But you don’t make a big honey crop every year. I forget exactly what it is, but I used to have to get a 40 pound crop per production colony to pay my bills. That was before I sold nucs & queens. Now I sell enough nucs & queens to pay my labour bill, which is huge, it’s for sure the largest single cost I have. So, having my help covered, whether I make a honey crop or not, has really changed things.
Michael: Now I actually have money left at the end of the year. Sometimes a lot of money. Last year I bought a new truck, to lower my tax burden and I needed a new truck; my old truck was sixteen years old. It’s really changed everything. Diversification of your income is really important. If you look at any farming, say dairy, it’s the same thing. Dairy farmers selling to the packer, or bulk purchaser – they’re getting a terrible price, in some years they make less than it costs to produce. But if they are able to change that milk into a finished product, a value added product, they’re going to be ahead, and it helps to insulate against those bad years.
Steve: Of the nucs and queens, it seems to me that queens would be more profitable, because it’s one insect, a small package in the post, is that right?
Michael: But the amount of time involved in raising those queens, from cell builder set ups and grafting is huge. I spend every day from the first week in May until the first week in August raising queens, running cell builders and mating queens – it’s a huge amount of labour.
Making nucleus colonies, provided I have the queen…I can make up 50 nucs in a day, and put the queens in. Then ten days later I have to check on the queen, see that she’s laying, and replace her if not. The amount of actual hands on time with making nucleus colonies is pretty small.
Steve: Whereas the queens are a big deal
Michael: Exactly. So if I sell 175 nucleus colonies for $200, which is $35,000 and I sell 800 queens like I did last year, at $30 each, it’s less money [$24,000] but more time. But they fit together because I need to raise queens to make nucleus colonies, so all I’m doing is raising extra queens to sell, and I always have spare queens on hand.
Steve: Who buys the nucs, is it mostly beginners?
Michael: I would say so, beginners, back yard beekeepers, part timers…sometimes bee clubs – they might buy 20 at a time. I did at one time sell 100 nucs at a time to a company for a few years, until I realised how much they were charging on the resale. They were making more money than me, and I was doing all the work, so I stopped.
Steve: That reminds me of something I was going to ask you, about pricing. Some people are more willing that others to raise prices and you seem a bit reticent to, I don’t know, push it.
Michael: I think my prices have traditionally been a bit low.
Steve: Considering that your product is probably a bit better than most…
Michael: I decided this year to raise my prices up to what other people are getting, and they didn’t even blink. I’m hoping that price transfers into my production hives when I get ready to sell them. If a nucleus colony goes for $200 should not a production colony go for $300? I would think so, with all the ancillary equipment, and supers and so on. Can I get that? I don’t know.
Steve: I hope you’re not planning on that anytime soon
Michael: No, not soon.
Steve: One day.
Michael: Yeah. It really depends on how much help I can get over the next few years, whether I cut back a little bit. One of my helpers is thinking about taking a school teaching job and the other is talking about going back to school to get a masters degree…if I have to go back to the drug addicts again…I don’t really want to go back to that again.
Michael: These last few years have been so nice, with good help, and I don’t want to go back. So if it comes to that, I can sell off my New York State bees. Some of them are an hour and a half away. I have 450 hives or so over there. I could sell those and focus on my Vermont bees, but still do my nucleus colonies and my queen bees.
Steve: In a way that’s a little pension fund sat over there in NYS.
Michael: Yes it is. That’s why I’d like to get as much as I can. We don’t get a pension.
Steve: Do you ever compare notes with beekeepers in other countries to see how it differs?
Michael: Yes. Our friends in New Zealand, they are just flabbergasted that we don’t get a pension. I get no government pension after working as a farmer for my whole life. The only thing I have is the sale of my bees. I hope I don’t stay in it one year too long, and have a big catastrophe or something right when I’m getting ready to get out of it.
Michael: Like a big varroa crash, or a new disease comes along. We don’t have that great an inspection program, so what would happen if a beginner started keeping bees in used equipment by my breeding station?
Steve: It could completely ruin you
Michael: If they got foul brood into my mating nucs…I don’t know if I’d ever rebuild it again. So yeah, I’m concerned about that quite a lot.
Steve: Can you get insurance for that?
I don’t use antibiotics and haven’t for twenty years. I used to use them, Americans are famous for using them; I used to dust the inside of the hive to keep foul brood away. I haven’t done that for years and years, and I haven’t seen any foul brood in my hives.