The home of the almond industry, California’s Central Valley produces more than two billion pounds of shelled almonds a year. Those almonds need lots of bees–bees that had been disappearing.
The missing hives were from beekeepers who rented them to farmers that use them to pollinate their plants. One Montana beekeeper had his hives in California awaiting delivery to an almond farmer when they were stolen. The 622 colonies that he lost had been relabeled with the name of another company. They were only some of the 2,500 hives in a heist worth close to $875,000.
We could say the sting did not work. The man got his bees back from the County Sheriff.
Where are we going? To the price of pollination.
But first, bees, a Big Mac, and why we should care about pollination…
Bees and a Big Mac
A Big Mac bun is made from wind pollinated grain. The beef comes from cows fed with pollinated grasses and grains. The Big Mac’s “Special Sauce” needs paprika and that means bee pollinated peppers. Also requiring pollination, the onions, the pickle, and the annatto that colors the American cheese are Big Mac basics.
We could go on but you get the picture. From paprika to pickles, bees reputedly pollinate one third of all we eat.
The Pollination Business
Pollination occurs through wild bee populations and managed pollination from traveling beekeepers. Managed pollination is a big business.
These are the routes:
And this is what the boxes look like. Below, the employees of a Michigan firm are in California inspecting their bees:
Colony Collapse Disorder
So, it was worrisome when bees started dying.
During 2006 in Florida, a beekeeper lost two-thirds of his 3,000 honeybee colonies. Phone calls to other beekeepers confirmed that he was not alone. Starting a new chapter in honeybee history, Colony Collapse Disorder (CCD) had begun. While colonies always had a mortality rate that was close to 14%, CCD upped it to 30% and more.
Now though, CCD appears to have subsided. Whether it was caused by pesticides, parasites, poor nutrition, or pathogens (the four Ps), no one is sure. Although concern remains about bee well being (sorry), beekeepers responded appropriately to market signals. As a result, economists tell us that the impact on us was “limited.”
Our Bottom Line: The Price System
To see the impact of CCD, economists looked at input prices, colony numbers, honey production, and pollination fees. Their conclusion? Markets gave the appropriate signals. Wherever price went up, so too did the quantity supplied.
My pink arrows point to the price changes for almonds and other crops. After CCD hit, almond pollination fees soared but not those for most other crops:
As economists, we know that prices always send messages. Influencing incentives, they encouraged beekeepers to increase their colonies.
Also, those elevated prices encouraged thieves to commit the big bee sting.
My sources and more: The story of the bee sting operation was in the LA Times. Then, for an overview of California almonds, Bloomberg had the facts here and an update on CCD here. But if you want to slog through a long paper for all of the facts, this excellent study is worth it.
Our featured image was from Reuters via Quartz.
Please note our description of CCD was in a previous econlife post.