The Apis Information Resource Center welcomes David MacFawn as a new contributor. He is the first of what hopefully will become a stable of advisers adding specific resources available to the beekeeping community through this web site. Dave has lots of experience analyzing numbers and looking at financial issues. He developed a specific, detailed spreadsheet designed for beekeeping operations.
Here’s why he believes honey or pollination colony volume is very important to the success of any operation:
“For honey, the more honey that you produce the more that you can spread your trips and hive investment over. This reduces your per pound honey production cost. For instance, if you produce 80 lbs. of honey rather than 40 lbs of honey and incur a mileage / transportation cost of $20, your mileage cost will be $20/80 lbs= $0.25/ lb rather than $20 / 40 lbs = $0.50 / lb. This difference could be your profit margin on the honey.
“Also hive equipment cost depreciated / amortized over a larger honey production number is important. If your equipment depreciation per year is $225 ( say you purchased $2250 worth of equipment and straight line depreciate it over 10 years), and you make 80 lbs of honey, your equipment cost per pound is $225/80 lbs = $2.81 / lb but if you only produce 40 lbs your equipment cost per pound is $225 / 40 lbs = $5.63 / lb. This could very well make a difference if you make a profit or not. This is why you need to keep your equipment cost at a minimum by purchasing commercial grade / used equipment rather than top of the line grade woodenware.
“For pollination, for example if you move 10 hives rather than 20 hives you need to account the smaller hive numbers in your pricing if possible. For example if you spend $20 for mileage / transportation for 10 hives, your cost per trip per hive would be $20/10 hives = $2.00 / hive rather than $20 / 20 hives = $1.00 per hive.
“So, volume is important in the bee business. The bee business has a price, volume, distance relationship that should be on the minds of managers at all times.”