The Business of Beekeeping in South Carolina

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1 The Business of Beekeeping in South Carolina David E. MacFawn Lexington, South Carolina June, 2015 Beekeeping is a complex endeavor that takes up-front knowledge and planning to be successful. One needs to know not only beekeeping and what is going on during the bee year at the locations where you will have your colonies, but also a base knowledge of finance and marketing. All three, beekeeping, finance, and marketing, are necessary but different skills to be successful. The Bee Year One needs to understand the bee year to have your colonies ready for honey production, pollination, queen rearing and other bee endeavors. For me the bee year begins in December and ends in November. December is when the colony starts increasing their bee numbers in anticipation of the spring nectar flow which starts around the first of April in South Carolina. It takes honey and pollen for the colony to successfully raise bees. The lack of honey or pollen, results in adult bees that do not live as long as bees with plenty of nutrients fed when they are young. You need to decide where you want your bee operation to be, business wise, for the coming year, by December at the latest, and have ordered the necessary equipment and bees, if you are going to purchase bees (packages or NUCs) or make splits. The beekeeper needs to determine the number and location of out yards if they are going to have more than a few colonies in their backyard. Travel distance and time to get to the out yards is very important for cost containment. You want enough colonies in each yard to minimize travel cost per colony, yet not so many colonies that the local area cannot support the number of colonies. It should be noted that the latest research indicates that a lot of colonies accumulated closely in a bee yard are causing disease and pest issues. Colonies in the wild are spaced much further apart. Local flora around the potential out yard needs to be examined David E. MacFawn Page 1

2 The book, Beekeeping in South Carolina, has a chart of the most important nectar producing plants in South Carolina by region. This book is available thru Clemson extension for a nominal fee. (This book is still available at a cost of $6.00 and can be purchased through the Clemson Public Service Online Shopping Mall - The out yards should be located a month or two prior to the nectar flow to get them set-up for the incoming hives. Out yards should be located about five miles apart to minimize travel distance with five miles being the approximate maximum distance a forager will travel. The beekeeper needs to determine what type of honey product they will produce if in honey production. Extracted (liquid), comb, chunk is all possible with the resulting processing cost. For liquid honey you will need to determine how you will extract your honey; contract the extraction out, or purchase the necessary honey extracting and bottling equipment. If you have less than colonies and do not intend to increase your number beyond 15, then it is cheaper typically to contract the extraction out. For comb honey, you will need a freezer to kill any wax moth eggs that may be in your comb and cause leakage. For whatever type of honey product you will produce, you need to determine and purchase / assemble the necessary woodenware. If you are going to produce pollen, you need to determine when the pollen traps will go on the hives and purchase the pollen traps. Also, pollen processing / cleaning equipment will have to be procured as will the jars and labels if you are going to dry your pollen. For pollination, the beekeeper needs to determine what crops are being planted in the area and their pollination requirements. Some crops, like cucumbers, the honey bees require feeding with feeding being considered in the pollination fee. Distance traveled from the bee yard to the crop field, and the number of colonies required to pollinate the size of field needs to be considered. Finance Understanding financial aspects of beekeeping is critical to be profitable and successful. You need to determine what quantities and price you will sell your honey for at retail and wholesale prices, what you will charge for pollination services with respect to distance traveled, and queens, if you are going to raise queens for sale. It is necessary to determine cost of equipment, woodenware, and extracting equipment for honey production; trucks and trailers for pollination; NUCs and other queen rearing equipment for queen production. From the business plan, the finance plan evolves to determine your cash flow and how much cash the operation will need to finance the endeavor thru the coming year. It typically takes a 2015 David E. MacFawn Page 2

3 couple iterations modifying the business plan to determine if you can finance the operation. There is a cash dearth usually in the winter and spring. In the late spring, summer, and autumn the operation typically is able to get cash from the sale of honey, pollination services and queens. If cash is not available, the bee operation needs to determine where it will get the money; from bank loans, consulting, etc. To successfully be a full time beekeeper, you typically need to produce more than just honey; a combination of honey, pollination and queen rearing is typically necessary. Also, the nectar flow honey production quantity in your area and bee mortality rate is also critical. You should also consider placing your colonies to catch more than one nectar flow in South Carolina. Catching more than one flow will require moving the hives. You need to determine if you are physically able to do this via a truck or trailer. The Sourwood flow, while profitable when it occurs, usually only produces two to three years out of every five years. Hence, you need to determine if taking your colonies to the mountains is profitable and your cash requirements. When setting up your honey bee operation, you need to consider if it will supplement the income of another job, either full time or part time. Beekeeping requires being able to take advantage of those warm days in the winter to inspect your colonies. Also, the spring, from March thru June in most of South Carolina, requires time and attention to make a crop of honey. If pollinating, you need time to place your colonies in the fields at the proper time when the crop starts blooming. Honey bee colonies should typically be moved into the field when there is 15-20% bloom. Also, time is required in the August thru November (autumn) time frame to get your colonies in shape for the winter. This may be treating, feeding, requeening, or combining colonies. The Financial Analysis Honey Production, Pollination and Queen Rearing Spreadsheets (David E. MacFawn, dmacfawn@aol.com ) have been used to analyze various bee operation scenarios to determine investment strategies. These spreadsheets are the financial implementation of the business plan. The spreadsheets give an insight into pricing strategy, overall operation profit, total investment outlay, individual product line cost and profit, and blended honey pricing and costs. Marketing The beekeeper needs to determine where he will sell his honey, pollen, etc. Depending on the selling type, you need to determine what type of jars and labels you will need. For pollination, you will need to determine how to locate the farmers interested in your pollination service, the 2015 David E. MacFawn Page 3

4 number of colonies you will need to service your pollination customers, how you will transport the colonies, in a pickup truck or trailer, and the price you will charge per colony per bloom for the pollination service. The South Carolina Master Beekeepers, South Carolina Beekeepers Facebook web site, local beekeeper association Facebook web sites, extension agents, and the Clemson Apiculture Specialists are all often helpful. If you are interested in pollination, you should contact your local beekeeper association to get on the pollinator list at the local extension office for the counties you are interested in providing pollination services. For queen rearing sales you need to determine how you will get word out, advertise, that you have queens for sale and when they will be available. Local bee clubs are an excellent way to get word out that you have queens for sale locally. If you are interested in a larger geographical distribution, state association newsletters and the national bee journals are excellent. Farm Credit Companies These are several farm credit companies operating in South Carolina for your information. I am not necessarily endorsing any of these. You will have to contact them to determine terms and rates. Note that if you can finance your business out of current operations growth, you will not have to pay finance charges. Taking out a loan is saying that you are using the money today, with future periodic payments impacting future profitability. I would hope the beekeeper can fund his woodenware cost himself, with maybe the cost of a honey processing house and any extensive honey processing equipment being financed. AgSouth Farm Credit Headquarters/Statesboro Administrative Office 26 S Main Street Statesboro, GA Phone: Toll-free: Mailing Address: PO Box 718 Statesboro, GA ArborOne Farm Credit ArborOne Farm Credit 800 Woody Jones Blvd, Florence, SC Contact Us Call toll free: NMLS # David E. MacFawn Page 4

5 David E. MacFawn Lexington, South Carolina David Elgie MacFawn: David has kept bees in Maryland (Dark German bees), Virginia (Italian), North Carolina (Italian), Colorado (Russian), and South Carolina (Italian and Russian Hybrid). He is a North Carolina Master Craftsman Beekeeper, Co-Founded the South Carolina Master Beekeeping Program, awarded 1996 South Carolina Beekeeper of the Year, assisted Dr. Fell at Virginia Tech in the Virginia Master Beekeeping Program, Incorporated the South Carolina Beekeepers Association as a 501 C 3 Non Profit Corporation, and published several (over five) articles in the American Bee Journal. David is a beekeeper and has co-authored a book, "Getting the Best From Your Bees", for the practicing beekeeper. He also developed, marketed, and supported spreadsheets analyzing financial aspects of the honey and pollination businesses, and beeswax candle production and sales. David has a BS in Electrical Engineering and a Master s in Business Administration with concentrations in Finance and Operations Research. David was in the computer business for over 30 years and was a Customer Service Senior Manager / director responsible for worldwide support planning, training/education, logistics, call center support, and professional services at Sun Microsystems and a subset of this at NCR. David was also a Federal Systems Product Manager responsible for new DOD system definition and development at Data General. David resides in the Columbia, South Carolina, USA area and is an active sideline beekeeper David E. MacFawn Page 5