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Comment by mrweasel | Hacker News Reader

>more likely they add sugar to make extra money

That's actually illegal to sell as honey in many countries. It's known as "false honey" here, it's typically something Chinese producers will do. Either that or just have the bees convert sugar water to "honey". It's also the reason why local and smaller bee-keepers (like myself) aren't having any problems selling our honey. I have more people wanting to buy my honey than I can supply, because they trust that what I sell or give them is real honey.

How liquid the honey is, is mostly down to the flowers the bees visited. Rape seed honey will crystallise in the hive, if you don't extract it quickly enough. The flowers in my neighbourhood will yield honey that pretty much refuses to crystallise.

Interestingly enough, due to Danish regulations, the minute I put honey in a jar to sell, it's required to have an expiration date 1 year and 6 months into the future.

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Weasel, Would you send me your contact info? (mine is in my profile) I have just started with bees a little over a year ago, and plan to ramp up. I have learned so much in the last year and am excited about all the paths that I can see.

My sincere apologies in advance for being completely off topic here, but I'll share this in case someone needs a good chuckle . This is from one of my favorite episodes of Arrested Development "Beef Consomme".

http://i.imgur.com/oE8rlAE.gif

It is entirely impossible for me to not think of this when anyone mentions "Bees".

That gif is so short, it could be a png and lose no value!

The beekeeping subreddit is pretty good, if you're not on there already. Quite a few smart and experienced folks there, so most of the time you'll get good answers to questions (of course you'll get 6 different good answers each time).

I'm in the same boat as you... been beekeeping a year and am trying to split my way to 8-ish hives this year and look for an out yard for more next year.

Interesting, didn't know the flowers' type would affect honey crystallization.

The problem I see is that there is not much regulation and inspection going on with smaller bee-keepers. Which is great on one side, because you have many hobbyists who take pride in what they do and produce really great honey - but on the other hand it makes one wonder why some of the honey doesn't crystallize. I guess I will not be so fast to judge then. :-) Thanks!

The type of flower can have very, very different end results! [1]

"The red honey is prized for its purported medicinal value and intoxicating qualities which are attributed to the grayanotoxin present in the nectar collected from white rhododendrons (Rhododendron spp). The Gurung people in Nepal are renowned for their use of this mad honey, both for its medicinal and hallucinogenic properties."

[1] https://en.wikipedia.org/wiki/Apis_dorsata_laboriosa

It affects everything. The flavors of (say) avocado-flower honey and citrus-flower honey are so different, that you might not recognize avocado honey as honey if you're not used to it.

Wow, I've never heard of avocado-flower honey. What kind of flavor does it have?

More complex, a little less sweet. I don't know how to describe it, except (to paraphrase Douglas Adams), "it is quite, but not entirely, unlike citrus-flower honey."

Here in the states "Tupelo Honey" is quite sought after as it does not crystallize easily and is said to taste quite good. In South Florida, orange blossom honey is another popular type. Bee keepers will put their bees in a grove, and then harvest the honey just as they take the bees out, this way they can certify what type of honey they are selling.

> I have more people wanting to buy my honey than I can supply

Isn't that a question of price?

Changing the price so that you're 1-1 with supply and demand is not usually the most wise thing to do. There's price elasticity complications, etc.

A price hike can:

(a) alienate and drive away existing customers,

(b) not replace them with new ones (because you suddenly play in another price league where are established "expensive" products there)

(c) make the product seem to be priced ridiculously for what it is, and thus drive off most potential customers, even if demand at the lower price level was strong.

... that's the whole point. You want demand to drop, because you don't have the supply to match it. Demand outstripping supply is lost revenue.

Or you know, this is him making a living (I assume) of providing a good at a certain price, which allows everyone in his community who buys it right now to enjoy it. They know and trust him and are willing (I assume) to pay a little extra for that. If everybody is already happy, there is not really a point in and of itself to imagine how you could squeeze even more out of people. Not everything needs to be ruthless capitalism to work

You have it exactly backwards.

People willingly paying for a good means they are happy with the purchase, and just as many people will be happy at the higher price if he's still selling out every week. It's not "ruthless capitalism", it's protecting your supply and communicating the correct value. If prices get high enough, it will attract other people to become honey producers, increasing the supply and making more people happy. By keeping prices low, artificial scarcity is created, which is a harm to consumers.

> By keeping prices low, artificial scarcity is created, which is a harm to consumers.

No: If a producer can't satisfy demand at his/her prices, then that leaves room for a competitor with higher prices to come in. There, artificial scarcity crisis averted.

The problem with most economic theories is that they neglect the phenomenon of entitlement. Since welfare was invented, more and more people find the utility of their choices distorted. They will spend discretionary income on luxury goods and use welfare to obtain the necessities. I find more and more people using their cash to buy cell phones, big screen tv, etc. but they are still unemployed, getting Medicaid as well as disability income sometimes. So the decision to purchase a luxury good (like honey) sometimes does not respond to price hikes as one would expect. Normal users might stop buying it as the price goes up but 'entitled' users may continue buying it and thus they become even more dependent on welfare (and our taxes) for survival.

Where do you live that earned income does not affect welfare income? I make a good living and can't go out and buy a Maserati then say "oh darn I'm out of money, better go grab a welfare check for groceries this week."

If someone's buying $20 jars of locally sourced honey they're almost certainly not on welfare.

Welfare income is not affected by money earned working under the table or selling drugs.

There are tens of millions of recipients of welfare income.

The idea that any statistical significant number of them is selling drugs is so out of touch with reality (and borderline racist, because it draws from minority stereotypes first and foremost) that it's not even funny.

OP wondered in what circumstances people have money for luxury goods yet still qualify for welfare, so I named two.

I've come across plenty of people who receive some sort of public aid (e.g. subsidized housing, SNAP, Medi-Cal) who fall in the aforementioned categories. I don't have the slightest clue how representative they are and I don't really care one way or another.

Whatever interpretations you make of this are yours alone.

That's mostly a myth, from observing poor blacks etc sporting expensive sneakers or some large-ass TV, and assuming their spending habits are generally like that.

Those "luxury items" are not what the huge majority of welfare spending is about, and welfare is not the reason for them (people which make very little without welfare also splurge for similar purchases -- they serve as compensating factors for the lack of means, and even serve to improve their standing among their peers). Human needs are not animal needs, to end with survival.

Here are some starting pointers: http://usuncut.com/politics/6-common-welfare-myths-we-all-ne...

Also a surprising amount of welfare spending (via TANF) is spent on programs that aren't necessarily utilized by the poor.

I think you are severely mis-identifying the issues that might cause demand for local / raw honey. :)

For a start, you have the general "from farm to table" / locally sourced / organic trends that are on the up-stream (this is often are pure marketing, of course).

In honey's case, however, there are many strong additional factors:

- Many stories about fake honey flooding in from unscrupulous producers. There was plenty of stories about that in the United States a few years ago (some exaggerated, but then there's stories like this: http://www.bloomberg.com/news/articles/2013-09-19/how-german...). This in my opinion is actually a legitimate reason to stick local (at least until this can be controlled). Why spend $4.50/lb to get "honey" that might be some potentially adulterated crap where you can go to a local producer, spend $9/lb, and get the genuine deal?

- Greater varieties. Local producers tend to offer quite a bit more variety of honey flavors. Typically stores only offer a few, mostly lighter flavors of honey, with clover dominating the marketplace.

- "Raw foods" movements. There are a lot of claims about raw honey that probably aren't very true, but they probably drive additional demand. I do think there is a slight taste difference at least between unpasteurized / unfiltered honey and its pasteurized, filtered product (the former tending to be a bit richer).

I personally don't see the demand for raw honey being so huge that it's causing that massive of a demand (at least in the US). Elsewise, the price would probably go up more. As it is, the cheapest raw honey (your clovers and orange blossoms etc.) is only roughly twice the price of standard clover honey. A $9 / pound good is not exactly the strongest "luxury good" to make an entitlement rant over. :)

> People willingly paying for a good means they are happy with the purchase

Humans are not homo economicus, and are perfectly capable of feeling unhappy while taking the best option they see, and even being less happy after a voluntary purchase than they were before it. If people feel unhappy after the purchase often enough, some will eventually stop buying the product, and for some of those, no amount of price drop will later convince them to buy again.

Even if there are still enough buyers to buy all of the honey, the loss of goodwill in the community due to the appearance of being willing to extract as much value as possible from each transaction (known colloquially as "gouging") may well raise costs for the honey producer in many other interactions with his community, both financial and other. That goodwill is often worth more to the seller than the maximum additional profit that could be generated by raising the price to the market limit.

Those are economics for robots -- the naive, perfect, psychology-free version that applies to game-theory state-machines but rarely to actual humans.

A lot of those notions have been debunked for half a century or so in economics papers, but the crude theory is still taught to kids and economics 101 programs for fresh students.

That's exactly "ruthless capitalism"...

It may be hard to quantify into a pure-economics framework, but people and companies do place some kind of value on "stable and predictable relationships", even if that relationship is simply the price quoted by a supplier to customers.

Mindlessly changing prices for the maximum short-term economic benefit isn't always a winning strategy.

I have to agree with you. Having been in that position, sometimes its better to just run out and be happy with your profit. I've seen situations where a price hike is too severe, and you end up selling less, which causes a smaller profit combined with alienating the very community you support. Perhaps in something with a very long shelf life (honey), but I think, were I in their position, I would do as you say and change nothing.

Except you assume consumers will pay more. A price increase of X does not necessarily yield an equilibrium of demand reduction. Even a 10% price increase might yield a 90% demand reduction. You want to sell out your stock, even at the cost of higher demand. Being left with stock is an expense of its own, and can cut into extra revenue.

Generally speaking, it's better to be left with just a little stock than to sell out every week. You can't know if you've hit the price equilibrium unless you do.

Especially on a product like honey that doesn't spoil, a higher than average price during high seasons means you are protecting stock for future low seasons.

I don't know of anything that has an actually demand curve like that. In some cases, increasing price increases demand, as it opens you up to a new market of conspicuous spenders. It does no good to talk such hypotheticals. On the other hand, I have worked a lot in the food service and vending businesses. Missed revenue today is a war chest you won't have to ride out the seasonal fluctuations. How many customers are you going to make happy when you're out of business?

its also very unlikely that their low prices will keep competitors out of the market, unless they can produce so much honey to flood it.

That is an Econ 101 answer to a thesis-level question.

You missed the whole point...

Which is that a price hike can potentially drop demand more than the supply-equilibrium level -- and can even get it to the point you're losing money compared to before despite the higher asking price.

Imagine e.g. the slashback if Arizona (tea) raises their traditional $1 asking price.

If you plot sales volume on the vertical axis and price on the horizontal axis, you get a line called the price elasticity curve. Very few price elasticity curves are linear. Many have an inflection point beyond which volume falls faster than prices rise. If you raise your price beyond this point, you'll actually get declining revenue despite having a higher price.

Unfortunately, every product has its own curve, and there's no way to know the shape without changing the price and seeing what happens. So knowing that this is possible is not a great argument against raising prices. You won't know until you try it.

>If you plot sales volume on the vertical axis and price on the horizontal axis, you get a line called the price elasticity curve. Very few price elasticity curves are linear.

That's why I've already mentioned "price elasticity complications" in my first comment -- and gave some examples of how those can play out in real life.

Guys, this isn't about Elasticity Curves. This is about Just Prices [0]. In tight-knit communities, it was evolutionarily advantageous for customers to throw a hissy fit if a vendor hiked their prices. It's a Game Theory thing that relies on information asymmetry.

[0] http://daviddfriedman.com/Academic/econ_and_evol_psych/econo...

Price elasticity is an observed correlation. "Just Prices" seems like an interesting way to help explain why it happens, but I doubt business owners need to grok Just Prices in order to anticipate price elasticity.

Just Prices is not an explanation of Elasticity. In fact, it attempts to explain cases which Elasticity cannot account for.

E.g. (from the paper) the queues at restaurants. Our understanding of Price Elasticity suggests that the optimal arrangement (for both parties) is for restaurants to apply a surcharge in order to reduce queue times. The ubiquity of queues and rarity of surcharges suggests that something beyond Supply & Demand is occurring.

Another example. Areas affected by natural disasters often experience a fuel shortage. The price of gasoline may sell at several times the usual rate. The price hike simply reflects the diminished supply. But customers often behave unreasonably hostile toward the fuel vendors and refuse to buy, even if the purchase is still to their net benefit.

The hostility occurs because the customers feel they're being taken advantage of. Such a sentiment may not be rational in today's global market. But it was a rational response in the ancestral environment (where monopolies and monopsonies were more common) because price hikes set a precedent of exploitation (like how politicians use emergencies as an excuse to pass legislation, which mysteriously stays in effect even after the emergency has passed).

The commentariat may not grok the Evo Psych behind Just Prices. What they do grok is an intuition that a small community might get mad at the local bee-keeper if he hikes his prices out of the blue, Predicted Elasticity be damned.

The vendor can usually see a little farther than just one point on the price elasticity curve by employing price discrimination schemes, such as coupons, sale prices, and volume discounts. Extrapolation from there is iffy, but interpolation is usable.

Checking whether you could make more by raising prices is a bit more difficult. No one is likely to use a coupon that entitles them to pay 10% more for your product. What you could do is start your day with an auction, where larger buyers can bid on your supply, and then you sell off the remainder (if any) afterward. If your unit price should be higher, someone comes along, buys up your entire stock at the auction, and sells it off at a profit after you are sold out.

In terms of honey, you basically pay honey scalpers to reset consumer price expectations for you, then when you raise prices on direct sales, you become the heroic middleman-eliminator, instead of the villainous price-gouger.

You're still selling a commodity. Agricultural commodities aren't very elastic -- and local honey purveyors are already pretty high up on the cost curve.

Jack up the price 50% and people will find other vendors selling at market prices unless you're selling in a venue that increases perceived value.

Example: Two liters of coke costs $1.29 in my local market. A cold, 20oz coke in the soda machine outside my office is $2.50.

But of course, customers are free to disregard that date, I assume?

Yes, but you are not able to sell it when it's past the due date (but this may be not a problem for mrweasel).

There's two kinds of expiration date. There's the "this product may not be sold (and should probably not be used) after this date) which for example applies to minced meat and other perishable goods that spoil in dangerous ways. Be super-careful if you use products of that kind after the date. (Verfallsdatum in german)

Then there's the "best before" date which is the date that the vendor guarantees that the product tastes and behaves as expected. After that date, self-raising flour may not raise as expected and you'll get a brick instead of a cake. Or condiments may not add any taste, leaving you with a bland mass of meat instead of a spicy chili. (Mindesthaltbarkeitsdatum in german)

You as a customer are free to disregard both kinds of expiry dates, the difference is that the first kind indicates a danger to your health, while the second kind mostly indicates a danger to the taste and texture of your food.

I know there is a push to change EU regulations to allow longer "best before" dates on foods we know keep "indefinitely" like honey or canned goods, or to allow businesses to sell these past the "best before" date. But the food industry is obviously opposed to such change, and it's easy for them to pull the "we care about customer safety" card.

Incidentally, I remember my granddad had these really old (like 1970s) bottles of food coloring in his kitchen. They were actually marked "Shelf life: unlimited".

I can't talk about the EU level, but in Germany merchands can legally sell goods that exceeded the Mindesthaltbarkeitsdatum (best before) if they're certain that the goods are not dangerous. So they could sell honey past the date. Food (or medication for that matter) that has reached the Verfallsdatum (expiry date) can't be sold.

The best before date on canned goods is more of an indicator that the beans haven't fallen apart completely or the peach still tastes somewhat like peach. I somewhat doubt that canned goods are the primary driver of food waste on a distribution-chain level. They're usually good for a couple of years, any supermarket that can't sell its stock of canned beans in that time frame will go out of business.

See, that's nice. In the US, the dates mean f*@k all.

http://lifehacker.com/why-expiration-dates-on-your-food-mean...

In Poland (and probably whole EU) even salt has expiration date, which I assume is a clever biblical reference.

It's the date until when the the producer has to guarantee that the salt hasn't baked together to a single large lump.

Bottled water also does, but in that case it states until when the producer is confident that chemicals from the bottle won't leach into the water.

The lack of a legal enforcement regime doesn't make them useless.

For instance, the grocer I frequent seems pretty consistent in labeling their meats and breads, so the dates do provide information about when the item was packaged. For stuff that is less perishable, the dates are usually for stock rotation and far enough in the future that I don't care.

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