JULY 15, 1916 



591 



GENERAL CORRESPONDENCE 



THE COST OF HONEY PRODUCTION 



BY ARTHUR C. MILLER 



Prepared from an address delivered at Syracuse, 

 keepers' Societies. 



Do 3'ou remember when the eolt shied at 

 the paper and left you sitting in the dust in 

 the middle of the road? Some jolt and 

 some surprise. Well, that is just how I've 

 felt every time I've tried to get any of the 

 " boys " to tell us what it costs to produce 

 a pound of honey. They have shied at the 

 question even worse than the colt did at the 

 paper. I've tried them several times, and 

 now I'll try again; and perhaps this time I 

 can get them to walk right up and investi- 

 gate. As an aside, let me tell you that some 

 of the " boys " I've tried were frisking 

 around threescore and ten or more — full 

 time they were steady enough not to side 

 stejD at such an innocent question. 



Why do I want to know what it costs, do 

 you ask? What difference will it make? 

 Even if you know you cannot get any more 

 for your crop, can you? Fair question; 

 and the answers are that I want to know if 

 T am doing a profitable or a losing business. 

 If the former, is it a fair profit — worth con- 

 tinuing? and if the latter, can I make it 

 profitable or shall I abandon the business 

 altogether? I also want to know what each 

 step in the business costs me that I may 

 know where I can better matters or stop 

 some leak. That I get money enough out 

 of the business to support me and have a 

 little left over is not to the point at all. 

 The same capital and energy put in some 

 other line might pay far better; or even my 

 time alone, perhaps, could yield me a great- 

 er income. Enjoj'ment and health are not 

 under consideration now — just cold dollars 

 and cents. 



How shall we get at the cost ? Just as 

 they do in any business — find the basis of it 

 and build on that. The basis is " capital 

 and labor." First, we must determine the 

 amount of capital we have invested; then 

 we must determine the value of the labor 

 used in working that capital. That our 

 figures may be the more readily applicable 

 to apiaries of different sizes, or to a i^lant 

 embracing many apiaries, it is essential that 

 we establish a unit of value; and tliat unit 

 is the capital per colony, just as the mill 

 men figure at so much j^er spindle. In the 

 figures which follow, the basis used is of one 

 hundred colonies. A larger plant would 

 lower some items but increa^-e others, while 

 ill a smaller plant the reverse would be true. 



Dec. 7, 1915, before the New York Association of Bee- 



After consideration tlie hundred-colony ba- 

 sis has been deemed a proper one. 



The capital per colony on this basis is 

 approximately $10, divided as follows : 



Hives, supers, honey-boards, escapes, 

 frames, and brood foundation, $4.32; mak- 

 ing up, painting, tools, extractor, tank, etc., 

 68 cts. Total, .$5.00. Cash for working 

 capital, $5.00. 



The first items may vary a little under 

 different local conditions; but from figures 

 obtained from several sources I believe them 

 to be reasonably accurate. The item of 

 " cash for working capital " should equal 

 the investment in fixtures and appliances. 

 This is something that is all too often over- 

 looked or underestimated, not alone in hon- 

 ey production, but in most lines of business. 

 More failures come from having too little 

 capital for the business than from any other 

 one cause. 



This cash capital 'must supply sections, 

 crates, super foundation, food, cans, bottles, 

 labor, freight, and take care of all the 

 '*' overhead " cliarges. All these things must 

 be paid for; and when the crop is sold the 

 money expended for such items must be 

 returned to the business. If you will con- 

 sider these things a moment, I think you 

 will see the necessity of the classification. 



With the capital determined we must next 

 ascertain the cost of using it, the "expenses" 

 of running the business. The following 

 items are to be recognized : 



Interest, 6 per cent ; depreciation and ui^- 

 keep, 10 per cent; insurance and taxes, IVo 

 per cent; labor, 10 per cent. 



This makes a total of 271-2 per cent which 

 must be earned each year before the busi- 

 ness can pay the owner any profit. Let me 

 explain these items. 



Interest: It sliould be charged; becars3 

 if the same capital were invested in a mort- 

 gage, for instance, it would yield the owner 

 interest without labor on his part. 



Depreciation and upkeep : The plant must 

 be " kept up," which means both repairs 

 and replacements; obsolete appliances must 

 be superseded by new and better one-s, so 

 this item must enter into our determination 

 of costs. Ten jjer cent is a fair rate at 

 which to figure this. Some lines of business 

 figure much more than this, wliile few figure 

 much less. 



