# What is the per hive value?



## JSL (Sep 22, 2007)

When selling or purchasing an operation what is the general/average range one would consider reasonable? I realize this may be broad and dependent upon many factors, but assume average condition colonies and support equipment with yards, but no land or buildings.

I am working off the assumption the hives hold the greatest value so pricing would be based on per hive value.

This stems from a discussion with another beekeeper...

Happy New Year!


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## zhiv9 (Aug 3, 2012)

Depends a lot on the time of year. Strong doubles in May could be worth $250-$300, but less than half that in September.


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## jim lyon (Feb 19, 2006)

Good question Joe, I don't know how many actually sell. There is a "blue sky" factor involved in this for sure. A turnkey setup with locations in a desirable area, documented yield potential and perhaps even an established work force that knows the locations and the methodology would add considerable value. You start with a base appraisal of physical assets and stir in recent schedule F's, a no compete clause, factor in the time of year and crop prospects and try to find an agreeable number, probably somewhere between 300 and 1,000. How's that for a non answer?


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## sqkcrk (Dec 10, 2005)

Adam's numbers are as good as any. 

When buying a turnkey operation, seems to me, there is more to it than the per hive price. When I bought two different sets of beehives and equipment, supers, extractors, etc., etc., the seller had a price in mind based on what he thought each component was worth at that time and in the condition it was in. And both were not interested in selling pieces. They wanted to sell the whole outfit at once. So it was a negotiation. I had to buy some things I had no use for. So I negotiated a better package deal.

JSL, are you, or your friend, actually seriously considering buying hives from someone?


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## JSL (Sep 22, 2007)

Thanks for the input everyone! I was thinking more towards the $300-400 per colony myself, but your range certainly narrows it down Jim! I would look at it in terms of potential revenue going forward and try to estimate the risk involved. The work force may be a bit tough, so I don't really see that as an asset in the deal...

To me, I see it as colonies and locations, but perhaps that is too narrow minded?

Mark, I am not sure I have a strong interest, but an operation came up in a discussion and we were throwing numbers around. It is one of those things, need vs want.


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## jim lyon (Feb 19, 2006)

JSL said:


> Thanks for the input everyone! I was thinking more towards the $300-400 per colony myself
> 
> To me, I see it as colonies and locations, but perhaps that is too narrow minded?
> .


No, not at all. For what you are talking about I think you are probably in the ballpark. Locations are a bit tricky of course as it's difficult to buy or sell something you don't actually hold title to. I think you buy/sell an introduction and an agreement not to compete for a period of time and that's about as far as it can go.


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## sqkcrk (Dec 10, 2005)

$300.00 to $400.00 per hive? Dang. I guess I haven't priced hives in a while. How big are these hives and what comes with them? Two story/double deeps with three supers for honey? It has been quite a while since I bought hives of bees. The last hives I saw someone buy, a semi load after almonds, cost them less than $200.00 each. I believe. And that was about 5 years ago, maybe.

Have you considered looking at things this way? What are the components of a hive worth? What could you buy the parts for? The used empty equipment, supers. And what would a nuc cost you to fill it? Five frame nucs, especially if you buy in bulk, aught to run about $150.00, let's say. Are the supers worth that same amount again? Say two deeps and three mediums, all drawn comb, all in decent shape? How much are deeps with combs selling for? Mediums? $20.00? Then depending on what shape they are in and whether pallets or separate bottom boards and what kind of covers, the bottom boards and covers $2.50 each?

So I would say the components, bought separately, and used but in decent shape, could make the per hive price around $255.00 each. So I would offer $175.00 or $200.00 and see how the seller reacts.


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## beeware10 (Jul 25, 2010)

long time ago a hive used to be equal to the value of 100 lbs of honey.


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## jim lyon (Feb 19, 2006)

Mark, I took that he was talking about more than just the colony value, which could be pretty easily valued based on the many offered for sale post almonds. His op mentions "an operation".


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## sqkcrk (Dec 10, 2005)

Not a can? Thought it was a can.

So in today's terms around $200.00 to $250.00? Based on the 100 lbs of honey idea. Makes sense.


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## sqkcrk (Dec 10, 2005)

jim lyon said:


> His op mentions "an operation".


Yeah, but other than hives of unknown shape and size and locations that operation wasn't described. So what else is there to consider?


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## zhiv9 (Aug 3, 2012)

Drawn deep supers have been listed at $40-$60 a piece lately and sold at the Manitoba auction for $80 this spring.


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## jim lyon (Feb 19, 2006)

sqkcrk said:


> Yeah, but other than hives of unknown shape and size and locations that operation wasn't described. So what else is there to consider?


Post #3. Bee quality, location, time of year, crop prospects, production history........


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## beeware10 (Jul 25, 2010)

apple pollination used to be said to equal 60 lb honey as that is the amount lost by not having them set up for a honey crop.


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## sqkcrk (Dec 10, 2005)

jim lyon said:


> Post #3. Bee quality, location, time of year, crop prospects, production history........


So, are you saying "Already covered."? Or, "Already asked."? No comprende.


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## sqkcrk (Dec 10, 2005)

beeware10 said:


> apple pollination used to be said to equal 60 lb honey as that is the amount lost by not having them set up for a honey crop.


When I started pollination work the pollination price was about $25.00/hive, in the Champlain Valley. Seems like the wholesale/barrel price of honey was 50 or 55 cents. So that makes sense.


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## jim lyon (Feb 19, 2006)

I think we have a disconnect Mark. Just saying I don't have any trouble believing someone could be buying/selling something described as a beekeeping "operation" for as little as $300 per, the unknowns here are many and I'm sure Joe dosent wish to discuss them in much detail on a public forum.


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## irwin harlton (Jan 7, 2005)

ONE prognosis of the industry states

The general understanding, which is
developing throughout the honey world,
is if a point of stability in prices is not
reached soon, prices will continue their
steep decline and concomitantly there will
be a proportionate decline in beekeepers
in North and South America. A short-term
gain may be the progenitor of a mediumterm
shortage of pure, high quality honey.
If there is such a decline in the beekeeper
community, that could generate a long-term
shortage, high prices and the dominance of
honey production in Asia. Please see the top
10 world honey exporters for 2015 in the
chart presented below...from Ron Phipps Nov 2015

Its always been a business where only the fittest survive, bees and beekeepers

Spring seems to bring eternal optimism to both keepers and bees............................come ON Spring


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## sqkcrk (Dec 10, 2005)

Makes sense.

If a person could buy a semi load of hives right after they had been used for almond pollination, how much would they be worth from a buyers point of view? The load I was involved with wasn't looked at real well coming out of the almond groves, before being loaded onto the semi and shipped East. So the quality varied. everything from nearly dead to enough brood and honey to split into three good splits.

So if you were able to pick good strong hives right out of the almonds, what would they be worth? $200.00? $250.00? $300.00?

If one had the equipment, just think about what one could do with them right away. What one could do with them and recoup some of the investment right away. Pull a nuc out of each and as much as half the investment is returned. Then send them to do a pollination and another quarter or third. Then super them for honey and make an average crop and your investment is paid for. And, I think, that is being conservative.

That should give someone something to shoot holes through.


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## sqkcrk (Dec 10, 2005)

irwin harlton said:


> ONE prognosis of the industry states
> 
> The general understanding, which is
> developing throughout the honey world,
> ...


 Well aren't you a ray of sunshine today, Irwin.


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## Ian (Jan 16, 2003)

Same advice I'd give to Joe as I do to others asking; buy the live spring hives worked into salable units for the going price ($150-175 per single), buy the supers and what ever else for equipment that is needed. Place no or little value on the "stuff". Land and facility valued accordingly, acquiring bee yards and sales contracts are part of the package. 
My advice is always to borrow heavier on the equipment and land where as its value is more secure, buy bees but build in more of an internal hive growth plan.


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## Ian (Jan 16, 2003)

IMO hives hold a loose value to the operation, because they DIE so easily.... And they simply can be bought to restock equipment.

A honey producers operation value is held in comb and facility


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## JSL (Sep 22, 2007)

All good points! I am just thinking out loud here since the other beekeeper and I were pretty far apart on our numbers. 

Mark, yes, I can price a new hive and a package or hives after almonds. That seems pretty straightforward to me. But, when you add in some trucks and other equipment, that clouds things a little. Then throw in the locations. As Jim said, hard to value a what you can't buy, but really need as part of the deal. So what is that worth as a premium on top of a colony price?

Perhaps Irwin is just being the realist in the room. Things go in cycles... Was the last good cycle in the 80's? That was just a little early for me, but beekeepers seem to remember it fondly before the borders closed. What's the disclaimer financial adviser's use? Current or past performance is not indicative of future returns...


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## JSL (Sep 22, 2007)

Ian said:


> Same advice I'd give to Joe as I do to others asking; buy the live spring hives worked into salable units for the going price ($150-175 per single), buy the supers and what ever else for equipment that is needed. Place no or little value on the "stuff". Land and facility valued accordingly, acquiring bee yards and sales contracts are part of the package.
> My advice is always to borrow heavier on the equipment and land where as its value is more secure, buy bees but build in more of an internal hive growth plan.


Sound advice Ian. I do not like the idea of a loan, especially on something as risky as bees!


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## Ian (Jan 16, 2003)

JSL said:


> Sound advice Ian. I do not like the idea of a loan, especially on something as risky as bees!


Neither do bankers


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## Ian (Jan 16, 2003)

I have bought bees before, 40 when I started up 17 years ago, and packages along the way to recover loss years. But I have never bought bees to expand. Hives are too easily built, and can be built in a manner that eliminates investment in a matter of time and work. So I guess the question is what is a couple of years worth to you?


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## burns375 (Jul 15, 2013)

By no means am i commercial. 150 sounds good. Supply, demand, location, time of year, equipment, quality


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## irwin harlton (Jan 7, 2005)

Sorry Mark......................just trying to call em as I see em, life's a gamble, keeping bees even more risky


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## jean-marc (Jan 13, 2005)

Good strong doubles in May/June are worth $400, at least in my books. This is in Canada. As a seller of many hives I would not sell for less. Once sold they need to be replaced. Equipment plus bees, plus the cost of building the wax in the frames, the lost honey production. If I don't sell then the bees produce 150 pounds at $1.75lb (fast guestimate of the last 5 year price average). This comes close to $300. To replace a colony there is easily $100 of hardware. All this comes awfully close to $400.00 and does not count the costof lost honey production to have the bees draw the frames out. Gotta go... more oxalic sublimation. More on this later.

Jean-Marc


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## gww (Feb 14, 2015)

Jean-m...


> Good strong doubles in May/June are worth $400, at least in my books. This is in Canada. As a seller of many hives I would not sell for less. Once sold they need to be replaced. Equipment plus bees, plus the cost of building the wax in the frames, the lost honey production. If I don't sell then the bees produce 150 pounds at $1.75lb (fast guestimate of the last 5 year price average). This comes close to $300. To replace a colony there is easily $100 of hardware. All this comes awfully close to $400.00 and does not count the costof lost honey production to have the bees draw the frames out. Gotta go... more oxalic sublimation. More on this later.


But if you wanted all the stuff you mentioned you wouldn't sell. If you kept the hive and got all that stuff at the price you mention, you would be getting nothing for your labor. If you sell in this fasion you make the other guy get nothing for taking responsibility and spending all the labor to get those things. I wouldn't want to buy something just so I could work for free. This is just a differrent way of looking at it depending on if you are the buyer or the seller. I would not want to be a buyer unless the guy I was buying from really wanted to be a seller. I used to buy rental properties and my belief was that you should not fall in love but insted only buy from poeple who really do want to sell.

I am not being critical of your position because I don't know enough about bees or the bee buisness to put value to anything. As far as buying anything, I always like it to somewhat work on paper and to be worthwhile. Worthwhile is a subjective term as I have bought plenty of houses that I made about $2 an hour for my labor. I was willing to do that type of work for $2 an hour when I had nothing better or that I liked better going on at the time. Had to get a pretty good deal on a house just to get that.

Both side (seller and buyer) have their points.
Cheers gww


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## sqkcrk (Dec 10, 2005)

JSL said:


> But, when you add in some trucks and other equipment, that clouds things a little. Then throw in the locations. As Jim said, hard to value a what you can't buy, but really need as part of the deal. So what is that worth as a premium on top of a colony price?
> 
> Things go in cycles... Was the last good cycle in the 80's?


Equipment can be Blue Booked. Trucks can anyway. Trade in price. Honey House equipment can also be evaluated individually considering wear and tear.

I know people who will pay someone familiar with an area that they want to locate more yards in who will pay $50.00 per yard if a person will find those yards for them. I agree with Jim that there should be a noncompetition agreement, including yard use. If you are buying hives that are in yds then the yd should go with them. But I don't think you should pay anymore than $50.00 each for each one the previous beekeeper greases the skids for you on and introduces you to the landowner as a good guy who will treat them and their property right.

The last good cycle? The 80s? We have been living in the Golden Age of Beekeeping recently, for those who know how to deal with the ups and downs of Varroa/Virus and all. The price of honey has never been higher. The price for pollination has never been higher. Crops could be greater here and there, but they have been decent. Things are not as bad as they may seem. And may not be as rosy as I portray.


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## sqkcrk (Dec 10, 2005)

irwin harlton said:


> Sorry Mark......................just trying to call em as I see em, life's a gamble, keeping bees even more risky


I know. And I appreciate what you do, keeping us informed of Honey Prices and such. Just being funny. Trying to.


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## beeware10 (Jul 25, 2010)

mark how many pounds of honey would it have taken to buy an truck equivalent to one you just bought in the 80'?. I bet these are not golden years. that's why I consider a hive to equal to 100lbs of honey. use the same comparison to convert lbs of honey to items bought today. we may have a higher price for honey but look at what your truck cost. we make our living from honey and pollination so its only fair to compare lbs of honey value to the cost of items needed for our business.


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## JSL (Sep 22, 2007)

sqkcrk said:


> The last good cycle? The 80s? We have been living in the Golden Age of Beekeeping recently, for those who know how to deal with the ups and downs of Varroa/Virus and all. The price of honey has never been higher. The price for pollination has never been higher. Crops could be greater here and there, but they have been decent. Things are not as bad as they may seem. And may not be as rosy as I portray.


Mark, I do not see things as bad right now. I meant the 80's was the last good cycle prior to this current one.


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## sqkcrk (Dec 10, 2005)

beeware10 said:


> mark how many pounds of honey would it have taken to buy an truck equivalent to one you just bought in the 80'?. I bet these are not golden years. that's why I consider a hive to equal to 100lbs of honey. use the same comparison to convert lbs of honey to items bought today. we may have a higher price for honey but look at what your truck cost. we make our living from honey and pollination so its only fair to compare lbs of honey value to the cost of items needed for our business.


I'm not sure. What did an equivalent truck cost 30 years ago? $25,000.00? The truck I just bought costs the same as the truck I am replacing which is 10 years old.


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## sqkcrk (Dec 10, 2005)

JSL said:


> I meant the 80's was the last good cycle prior to this current one.


Okay. Though I bet there are others who might disagree with you and see other cycles more recently.


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## HarryVanderpool (Apr 11, 2005)

JSL said:


> I am working off the assumption the hives hold the greatest value so pricing would be based on per hive value.


Maybe so, Joe. Maybe not.









I just know myself all to well to write that check.










We start everything out as new and shake our own bees / make up our own nucs / make divides.
Or as the old saying goes:
"You can always afford to do things right THE SECOND time around!"


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## My-smokepole (Apr 14, 2008)

Some of those photos look just like some of the junk I have been getting rid of from when I bought out the local bee Inspetor.


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## JSL (Sep 22, 2007)

Harry and Smokepole,

So very true! Have to be careful not to buy another other beekeeper's problem... I was an inspector years ago and cleaned up my share of yards once operated by former inspectors. 

So Harry, maybe it just comes down to locations have value, but they are some of the intangibles...


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## Michael Palmer (Dec 29, 2006)

Two operations sold here in Vermont over the last 5 years. First...somewhere around 1000 colonies sold 5 years ago for $200/colony with supers on, locations included. Second sold 3 years ago for $200 with no supers, locations included. 

I've been considering cutting back on the number of colonies I keep. Won't anytime soon as long as I can continue to find the help I need to run the production hives. I have 20+ apiaries in NY I will eventually sell off. 400 colonies, proven honey locations. Bear fences. Wouldn't consider selling for less than $300/colony with supers. Nice return on my investment...bought them for $70-100/hive in the 80s.


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## Specialkayme (Sep 4, 2005)

Most operations I've seen listed/sold in the past few years ranged from $150 per hive in the fall to $300 per hive in the spring. I'm not commercial though, and have never bought someone out that had more than 10 hives, so take this with a grain of salt. 

Other than hives, equipment (including extracting, trucks, ect.) can easily be valued. They are usually worth something less than blue book though.

Yards - I don't put any value there, at least dollar value. Operational value certainly. But it isn't your land, you aren't really buying anything other than the knowledge the land exists. Unless the seller has contractual rights to use the land for the next X years. So the yards could go away if the property owner doesn't like you, or dies, or whatever. I have 5 yards now, and I know if I stopped checking my bees and someone else showed up, the property owners would respond with a shotgun (and eventually if they found out they owned the hives, would probably tell them to move the bees off, as they don't know the new owner). 

But the operational value of the yards, whatever it is, is automatically added into the price of the hives. If the seller can continue to operate their hives, they don't need to sell, which means they can ask $450 per hive. But it requires additional work to maintain. If they can't work it (or don't want to), then they need to sell, which means they are willing to offer a discount for all of it to be gone at one point in time (as opposed to a slow or piece meal liquidation).

At least, my take on it, for whatever it's worth.


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## jim lyon (Feb 19, 2006)

Spec. All good points and I can't say I really disagree with any of them except to say that a turnkey operation with a proven historic yield potential is clearly worth more than the sum of its parts. The location thing is somewhat different in states where locations are registered and a distance between apiaries is regulated by a state apiary department. Despite that, "selling" locations is a subject than can get pretty controversial particularly if landowners catch wind of the fact that a beekeeper "sold" their (the landowners) private property. As I stated earlier, all that can really be sold is an introduction and an agreement not to compete or interfere with whatever relationship evolves from that introduction. The only person that ever truly "owns" the location is the landowner who deserves to know who is driving on and off their property.


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## JSL (Sep 22, 2007)

So am I correct in getting the sense that $300-400 per colony is a reasonable range, give or take on the specifics?


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## JSL (Sep 22, 2007)

It is interesting to me when I start thinking about the value of an operation. I think there is considerable value in the knowledge and skill of a successful beekeeper, but too bad you can't box that up and sell it. An operation that was profitable under one owner may not be under the next... I also think some beekeepers hold on to their operations past their prime and then value it based on the glory days. Perhaps I will make it there some day too.

Then there is the concept of consolidating ownership under one company to meet some other need such as in house pollination. Is an operation inherently more valuable to a large holding company that wants to ensure hives for pollination of their orchards?


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## sqkcrk (Dec 10, 2005)

The few outfits I have seen change hands usually go down hill after the exchange. Seems like no one runs an outfit like the person who built it, whether bought or inherited.


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## jim lyon (Feb 19, 2006)

JSL said:


> It is interesting to me when I start thinking about the value of an operation. I think there is considerable value in the knowledge and skill of a successful beekeeper, but too bad you can't box that up and sell it. An operation that was profitable under one owner may not be under the next... I also think some beekeepers hold on to their operations past their prime and then value it based on the glory days. Perhaps I will make it there some day too.
> 
> Then there is the concept of consolidating ownership under one company to meet some other need such as in house pollination. Is an operation inherently more valuable to a large holding company that wants to ensure hives for pollination of their orchards?


All things a savvy buyer needs to consider for sure. A larger operation may tend to justify the economies of scale gained if an operation "dovetails" well with their location. 
There is currently a pretty large experiment in progress where a company is trying to ensure their supply of pollinating bees by direct ownership. My personal opinion is beekeeping is beekeeping regardless of where the ownership lies. The success of any such venture will be directly tied to the quality of the personnel they hire and management that the hives receive. If it turns out they can do a better job and gain an economic advantage it will continue, if they eventually decide that subletting the pollination service is more cost effective then they will probably reverse course at some point. Beekeeping has always had its cycles, past performance is certainly no guarantee of future success.


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## Fusion_power (Jan 14, 2005)

Per colony value depends on:
1. Condition of the colony
2. Condition of the equipment the colony is in
3. Amount of equipment the colony comes with including supers, feeders, etc.
4. Location value where they can stay on location and be managed for a crop (implies an economically viable crop)

Other assets to consider include:
1. Vehicles included (use blue book value)
2. Supplies included such as extra foundation, feed tanks, etc.
3. Automation equipment such as extractors, uncappers, storage tanks, cappings handlers, etc.
4. Shop equipment that can be used to maintain woodenware

Detrimental factors to consider:
1. Any extra equipment you must purchase but can't use, can it be resold to recover inputs
2. Duplication of equipment you already have where your own equipment becomes surplus because you are getting something better
3. Potential for market competition if the seller decides to start a new operation
4. Windshield time, the further you have to drive to service the yards, the less value they have

I ran numbers to see what it would cost to build out a double deep colony including bees and came up with $200 for a top, bottom, 2 deeps, frames, foundation, and bees. If you add in time required to assemble, paint, install bees, add 2 or 3 supers, and manage them for a year with little or no crop, cost goes up to $300 per colony. Now factor in the opportunity cost of a honey crop that you could have harvested from established colonies vs the reduced crop potential from new colonies and you get a lost opportunity value in the range of $175. From this, you can derive that the value of a colony of bees is probably around $475 at the top end presuming excellent bees in excellent equipment. Add in the value of any equipment such as vehicles. IMO, anything between $300 and $475 per colony looks like a pretty good deal with caveats for condition of bees and equipment. This does not include the potential to pull a nuc from each colony and recover $150 or so in the first year.


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## Mosherd1 (Apr 17, 2011)

I understand that we are taking apples and oranges, but I have bought and sold (for my day job) insurance agencies. We value them somewhere in the ballpark between 1-2 times annual gross income. Not sure if this would apply to beekeeping but if the operation can gross $100,000/year than the value would be between $100K-$200K. Apples and oranges but it offers a different perspective on things.
-Dave


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## texanbelchers (Aug 4, 2014)

beeware10 said:


> long time ago a hive used to be equal to the value of 100 lbs of honey.


Was this based on retail pricing in small units or wholesale barrel pricing?


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## MNbees (May 27, 2013)

Mosherd1 said:


> I understand that we are taking apples and oranges, but I have bought and sold (for my day job) insurance agencies. We value them somewhere in the ballpark between 1-2 times annual gross income. Not sure if this would apply to beekeeping but if the operation can gross $100,000/year than the value would be between $100K-$200K. Apples and oranges but it offers a different perspective on things.
> -Dave



Yes i think this is more like it if your buying a business and not just a load of bees. I have even read things that suggest a 5-10 times annual gross. Not sure what would apply to a bee business. Since the return can be faster than other businesses i would say at least 2-3 times gross would be fair.

Per hive values are hard with so many variables.


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## beeware10 (Jul 25, 2010)

tx this is based on wholesale in barrels. when you get to selling in barrels your at the mercy of packer. no such thing as 8 dollar honey. we used to figure the value based on 100 lb average. with out expenses figured in they should gross the value of 100lbs and pay for for themselves the first yr. when you buy larger amounts of bees usually the quality of equipment is less than smaller amounts. at least that the way in the east. as a rule larger western outfits seem to have newer equipment. moving bees makes a beekeeper have better equip.


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## sqkcrk (Dec 10, 2005)

jim lyon said:


> There is currently a pretty large experiment in progress where a company is trying to ensure their supply of pollinating bees by direct ownership. My personal opinion is beekeeping is beekeeping regardless of where the ownership lies. The success of any such venture will be directly tied to the quality of the personnel they hire and management that the hives receive.


In my opinion, the experiment is doomed to failure unless the corporate model of decision making is thrown out the window and the Manager/Beekeeper is given free rain to do what is necessary to keep the hives strong and ready. His salary would have to be tied to the outcome.


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## sqkcrk (Dec 10, 2005)

Mosherd1 said:


> I understand that we are taking apples and oranges, but I have bought and sold (for my day job) insurance agencies. We value them somewhere in the ballpark between 1-2 times annual gross income. Not sure if this would apply to beekeeping but if the operation can gross $100,000/year than the value would be between $100K-$200K. Apples and oranges but it offers a different perspective on things.
> -Dave


This would have to be determined over a 10 to 20 year period's worth of actual records, profit and loss statements and all. I wouldn't bank on 5 years records. Not long enough time.


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## Specialkayme (Sep 4, 2005)

jim lyon said:


> a turnkey operation with a proven historic yield potential is clearly worth more than the sum of its parts.


I'd agree . . . in part. In theory a turnkey "proven" operation is worth more than the sum of its parts. But who's going to buy it? 

The guy that already has his own operation of comparable size, and is looking to expand, doesn't need all of the "parts." So he isn't going to value it as more than the sum of its parts. He's getting plenty of parts he doesn't need, so why should he pay "extra" for them? He'll likely discount it down to what makes sense to him, i.e. what it would cost for him to acquire the individual parts that he needs separately, plus what it would cost to "resell" the parts he doesn't need. Otherwise, he's paying more than he needs for it.

On the other hand, there is the guy that doesn't have his own operation, and he needs all of the parts. He would be willing to value it as more than the sum of its parts. But does such a buyer exist? Not really. I've never met someone looking to get into the industry that has no equipment of his own, of any kind (although I'm sure they exist). Everyone I've met starts off with some hives (1, 10, or 30), expands from there, and eventually gets to the point that he needs to acquire the turnkey operation. But at 30-80 hives, he probably already has _some_ of the equipment (truck for example), so he'll discount it down from there. To the guy that really doesn't have _any_ of the equipment, and needs the turnkey operation to get off the ground, well he's the only person showing up to buy. Supply and demand dictates that he can name his own price, so long as it doesn't go so low that it becomes equal to or less than the sum of the parts. 

It's important to know the potential buyer, just as much as knowing the item that is to be sold.



jim lyon said:


> The location thing is somewhat different in states where locations are registered and a distance between apiaries is regulated by a state apiary department.


A good point. Something I didn't take into consideration (and have zero experience with).



Mosherd1 said:


> I understand that we are taking apples and oranges, but I have bought and sold (for my day job) insurance agencies. We value them somewhere in the ballpark between 1-2 times annual gross income. Not sure if this would apply to beekeeping but if the operation can gross $100,000/year than the value would be between $100K-$200K. Apples and oranges but it offers a different perspective on things.
> -Dave


I've been on the buyer and seller side of probably over 50 different small to mid size companies over the past decade at my normal 9-5 job. I work in business turnaround (in part), and a portion of that involves subjectively valuing companies. 

Speculative businesses will typically sell for 1-2 times gross annual income. More proven businesses will typically sell for 3-5 times gross annual income. Solid businesses may sell for 7-10 times gross annual income. More than that, you end up getting your own stock ticker, or there isn't much of a point in you trying to sell it.

But agriculture is different. You don't buy the potential to get gross annual income when you buy a farm. You buy the right to work. Your work (and not the business, it's customer list, it's equipment, it's patents) is what generates the income. Agricluture businesses are valued at the land, buildings, and equipment, plus the *market* value of the cattle and crops. That's it. You don't add a multiplier to agriculture businesses, because it could all be gone tomorrow, much more likely when the farmer isn't around. Bees could die any day now, and the longer they are left unattended, the more likely they'll be dead. 

I work (in part) for a Chapter 7 Trustee. When companies want to throw in the towel, the Trustee comes in and sells everything for the betterment of creditors. The one thing the trustee doesn't want, and won't value, is anything that eats, sh*ts, or requires medication. A few years back an alligator farmer declared bankruptcy. The trustee took the land, equipment, and buildings and sold them all. Before he did, the farmer asked the trustee what to do with the alligators. The trustee said he didn't want to have anything to do with them. They were worthless to him. Chapter 7 situations are an extreme, but just goes to show you what crops and livestock are worth to people who take companies apart.


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## babybee (Mar 23, 2012)

How many bee locations? What level of floral source for said yards? Also, how is agri business changing in this area? If one had bought a bee outfit 50 years ago locations such as Iowa or Nebraska would have really been valuable, but now these same areas are all corn and soy. It may be hard to predict that, but sometimes it is as simple as watching what is happening year to year. I recently purchased a bee outfit exclusively for its quality locations. I over paid for it but it is worth more than I paid. I made way more honey than ever and a higher quality honey. Granted it only worked this way because I already owned lots of my own bees and had plenty of working capital.


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## texanbelchers (Aug 4, 2014)

beeware10 said:


> tx this is based on wholesale in barrels. when you get to selling in barrels your at the mercy of packer. no such thing as 8 dollar honey. we used to figure the value based on 100 lb average. with out expenses figured in they should gross the value of 100lbs and pay for for themselves the first yr. when you buy larger amounts of bees usually the quality of equipment is less than smaller amounts. at least that the way in the east. as a rule larger western outfits seem to have newer equipment. moving bees makes a beekeeper have better equip.


Thanks!, I figured that, but wanted to verify. I don't know how consistent the retail pricing is. Local honey squeeze bottles were going for $4 in a higher end foodie store in Houston. Non-local Comb honey was $15+ for a small square. Go figure.


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## Roland (Dec 14, 2008)

After "inheriting" a warehouse of old supers and 30 beeyards, the only thing of value was the yards. Supers full of CCD spores ain't worth a hoot. We would have been much further ahead if we had used the woodenware for heat and purchased new. Right now we still have half(kept separate from the new half) of our operation in the old equipment, and it is the only place AFB and EFB shows up. 

Crazy Roland


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## Ian (Jan 16, 2003)

Not everyone's supers are full of CCD Roland


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## jean-marc (Jan 13, 2005)

Roland: If you would have been further ahead to burn the "inherited" equipment some years ago, are you not in the same situation now? 5 years from now you'll be signing the same tune... "shudda changed over, got me some CCD, can hardly make no honey, got me some AFB, wudda spent the money, cudda been having more honey etc...

Jean-Marc


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## JSL (Sep 22, 2007)

babybee said:


> I recently purchased a bee outfit exclusively for its quality locations. I over paid for it but it is worth more than I paid. I made way more honey than ever and a higher quality honey. Granted it only worked this way because I already owned lots of my own bees and had plenty of working capital.


It is funny how this works! We can't really buy the locations, but they can make or break the operation. I don't think they are making any more good forage, so find the good areas and make it work. Sounds like things came together just fine for you.

"I over paid for it but it is worth more than I paid." This is a great quote!


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## JSL (Sep 22, 2007)

Specialkayme said:


> Speculative businesses will typically sell for 1-2 times gross annual income. More proven businesses will typically sell for 3-5 times gross annual income. Solid businesses may sell for 7-10 times gross annual income. More than that, you end up getting your own stock ticker, or there isn't much of a point in you trying to sell it.
> 
> But agriculture is different. You don't buy the potential to get gross annual income when you buy a farm. You buy the right to work. Your work (and not the business, it's customer list, it's equipment, it's patents) is what generates the income. Agricluture businesses are valued at the land, buildings, and equipment, plus the *market* value of the cattle and crops. That's it. You don't add a multiplier to agriculture businesses, because it could all be gone tomorrow, much more likely when the farmer isn't around. Bees could die any day now, and the longer they are left unattended, the more likely they'll be dead.


Interesting numbers! Would you suggest that beekeeping is speculative in nature and considered ag? Seems pretty simple, just don't let em die...


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## Specialkayme (Sep 4, 2005)

JSL said:


> Would you suggest that beekeeping is speculative in nature and considered ag?


I'd consider beekeeping ag, and EXTREMELY speculative in nature. In buying a beekeeping business, you aren't really buying a system that is profitable. The former owner is what made it profitable. The former owner's WORK is what made it profitable, and what made money. Any profit you make will have to come from you, from your own WORK. What multiple on next year's paycheck would you be willing to give to have the right to continue to work for an unknown period of time? That's what makes ag so different.



JSL said:


> Seems pretty simple, just don't let em die...


Simple words, not so simple in practice


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## JSL (Sep 22, 2007)

Specialkayme said:


> The former owner is what made it profitable. The former owner's WORK is what made it profitable, and what made money. Any profit you make will have to come from you, from your own WORK. What multiple on next year's paycheck would you be willing to give to have the right to continue to work for an unknown period of time? That's what makes ag so different.


I agree and think Mark mentioned this earlier. When operations change hands, all bets are off. There is value in the skill and the ability of the individual running the business, IF it is profitable. Now, how to develop and package that into a 7 step program to sell...


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## jean-marc (Jan 13, 2005)

It is best when purchasing an existing business that you get the previous owner to stick around for a year. Do everything as he did, assuming the business was profitable for the first 2-3 years. Then after that, if you want then start implementing slow and or gradual changes. If the previous owner was able to be profitable for 30 plus years, he was doing something right and his lead should be followed.

Jean-Marc


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## Roland (Dec 14, 2008)

Ian correctly pointed out that not everyone's equipment is full of CCD. I agree, but AFB supposedly glows in UV and smells, but CCD has no indicators.

Jean-marc - on the woulda -shouldas, yes, I am getting ahead by slowly replacing whole yards with new equipment, and not co-mingling in the warehouse or yards. I would suggest the purchaser do the same, run the purchased hives separate from the hives he has now for at least a year. That includes sterilizing hive tools/smokers when switching.

Crazy Roland


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## RichardsonTX (Jul 3, 2011)

JSL said:


> When selling or purchasing an operation what is the general/average range one would consider reasonable? I realize this may be broad and dependent upon many factors, but assume average condition colonies and support equipment with yards, but no land or buildings.
> 
> I am working off the assumption the hives hold the greatest value so pricing would be based on per hive value.
> 
> ...


Strictly speaking in terms of monetary value it's the discounted future earnings of that operation, as utilized by the buyer, given an arrived upon cost of capital to arrive at a net present value. This is why an operation is a different value for different buyers because of the way they may utilize the operation. 

Buyers who purchase a business and sell off it's assets to generate a short term return will only recognize the market value of the assets minus the cost of carrying out their transaction (operating costs for selling off the assets). For hives sitting across the street from a desperate farmer with pollination needs that market value may be one thing. For hives sitting in central Texas after having had the honey extracted off of them that may be one thing. Etcetera. 

Buyers who purchase a business with the intent to keep that as a stand alone business, intact, with all it's employees and assets to manage it will recognize a future stream of earnings from the business as it's value given their projected cost of capital over that time period. The cost of capital factoring in the risk free rate of return (usually based on a U.S. Treasury Bill), adding in the different risks factors associated with that earnings stream to arrive at an actual cost of capital, and then discounting that into a net present value. It's the same way a person would value a bond or other cashflow stream except that doing it with a business requires an intimate knowledge of that business. Usually, if the buyer isn't experienced in the industry, they'll hire a consultant who can provide them with the information needed and advise them of probable outcomes in the process of creating that hypthetical earnings stream (i.e, proforma financial statements). In my opinion, not utilizing the help of an unbiased consultant when making a large acquisition is a big reason that a lot of acquisitions turn out sour. That's why, in this industry I'd think it makes sense for a small beekeeper to grow their operations internally and learn in the process, if they plan to be actively involved in the management of the business rather than have it solely as an investment. 

Buyers who purchase an operation with the intent on integrating it into their current business need to do the same as the previous scenario but not seperately so that synergies generated are shown in the projected earnings stream. Although, being too optimistic about synergies are one of the big issues with acquisitions too. In my opinion, they should be heavily discounted. 

Not strictly speaking in terms of monetary value.................there's a lot of this valuation going on out there too even with publicly held companies utilizing the assets frivolously purchased with unsuspecting and speculative shareholder money.......some people just want to buy an operation with the money they have to invest and work that operation in peace having the comforting sense that they feel they have a secure future even though the return on the assets of that business/operation aren't even providing a return comparable to a "risk free" U.S. Treasury bond much less the other risks involved in that business or even inflation. 

Having said all that, for longterm valuation, an operation/business should always be valued by it's projected earnings stream.


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