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McKenzie Farms Green Express June-August 2014 Newsletter

Caroline Anderson - Monday, June 02, 2014

MCKENZIE FARMS GREEN EXPRESS… “GROWERS OF SIGNATURE TREES”

JUNE-AUGUST 2014

We are proud to announce the purchase of SILVER MOUNTAIN CHRISTMAS TREES’ tree inventory. SILVER MOUNTAIN, under the direction of Jim and Shirley Heater, has been selling quality Christmas Trees since 1968. Their attention to quality, customer service, and complete satisfaction is legendary. With the combined inventories of MCKENZIE FARMS and SILVER MOUNTAIN, we now have the largest Christmas Tree Inventory of any Grower in the United States. With our combined inventory and our Network Growers, we have over 10,000,000 trees with an annual yield in excess of 1,000,000 trees. The Jim Heater and McKenzie Cook families invite you to come to Oregon and see for yourself the “MCKENZIE FARMS CUSTOMER ADVANTAGE”

Jim and Shirley Heater have agreed to remain with us during the transition and hopefully many years thereafter. Jim Heater has long been one of the standard bearers for the Christmas Tree Industry on a regional and national basis. His growing skills, knowledge, and innovative harvest system have made SILVER MOUNTAIN a leader in the Christmas Tree Industry. We acknowledge and thank Jeff Elston with FARM CREDIT OF OREGON for helping make our dream become a reality. We are proud of our new Partnerships and are optimistic about the future.

Over the past ten years the Christmas Tree Industry has experienced an over-supply of Christmas Trees and an under-demand. These factors have resulted in many Christmas Tree Growers exiting the business. In the process, prices at the wholesale and retail level have declined to the lowest benchmark in over twenty years.

The overall inventory levels of all Growers in the Pacific Northwest have declined over the past twelve years by 25,000,000 trees. The current inventory level for all Pacific Northwest Growers is slightly over 55,000,000 with an annual yield (after shrink) of 5,875,000 per year. This is an annual yield reduction of 2,625,000 trees. The current demand is slightly over 6,000,000 trees per year. With the annual yield decreasing at 250,000 trees per year for the next five years, the imminent Christmas Tree shortages will exceed 1,000,000 per year by 2016.

The Christmas Tree Industry must be proactive, not let inventories grow at rate that exceeds the demand, and we must not raise prices to a level that will encourage new inroads by the artificial tree manufacturers. In the past ten years, we have experienced both of these events and it has been a lesson in failure that has been indelibly inscribed in our minds. We must be aggressive, but not stupid. Christmas Trees should not be planted for speculative purposes. We are stewards of the land, and therefore we should only plant in accordance with real demand.

The USDA Christmas Tree Marketing Order will become a reality in 2015. The program was stayed in 2011, but the stay was lifted in April, 2014. Under the new Christmas Tree Marketing Order, producers and importers of fresh-cut Christmas Trees will pay a 15 cent annual assessment per tree harvested and sold. The program will be administered by a Board of Industry Members (12 Members) selected by the Secretary of Agriculture with oversight by the USDA. Industry Members will have an opportunity to vote in a referendum (three years after the program commences) to determine whether the Program continues. The Program would continue only after the majority of the Tree Producers vote in favor of the referendum.

It is the opinion of the MCKENZIE FARMS and SILVER MOUNTAIN Management that this Program will enhance consumer awareness, understanding, and the benefits of the fresh-cut Christmas Tree. This Marketing Program will define why a fresh-cut Christmas Tree is environmentally sound, and why it should remain the essence of today’s family Christmas Tree celebration.

We have just recently completed our ‘New Seedling” plantings for 2014. We have planted over 800,000 new seedlings of Noble Fir, Doug Fir, Nordmann Fir and Grand Fir. These new trees now begin their 8 to 10 year life-cycle journey. Each tree planted, in addition to the planting cost, requires an additional cost of 50 cents per year. This cost does not include the harvest cost of $5.00 and the shipping cost of $5.00. For every 1,000 trees planted only 850 will meet the grading standards and be certified as a MCKENZIE FARMS SIGNATURE TREE. We now have fields from Estacada to Monroe, Oregon, with five major mixing yards in Estacada, Salem, Sublimity, Corvallis and Monroe. In the current year, we anticipate shipping over 900,000 trees.

I would like to introduce our new Team Member, Tyler Delbert. Tyler is a recent graduate in Marketing and Business from California State University of San Marcos. He will join MCKENZIE FARMS in July and train with John Anderson, Carey Anderson and Thomas Cook. Tyler, who is my Grandson, will represent the third generation of our family business. Our family and team members welcome Tyler. His success will be earned through his total commitment, hands-on-training, on-the-job training and by his contributions and positive results.

Here are my PREDICTIONS FOR THE NEXT TEN YEARS:

Christmas Tree shortages will continue into 2024.

Major Christmas Tree Growers will make a full recover by 2017-18.

Wholesale and retail prices will increase at 3% to 5% per year.

Labor shortages will impact the industry starting 2015.

Cost of doing business will increase at a rate of 2% to 3% per year.

Demand for Christmas Trees will increase at 2% to 3% per year.

MCKENZIE FARMS and SILVER MOUNTAIN CHRISTMAS TREES invite you to come to Oregon, visit our fields, meet our Team Members, and see first hand the MCKENZIE FARMS CUSTOMER ADVANTAGE. Our Family is committed to an elevated standard of excellence. We are….

MCKENZE FARMS

CRAFTED FOR THE CHRISTMAS SEASON

HANDMADE AND GROWN IN OREGON

SHIPPED WORLDWIDE

MCKENZIE FARMS SIGNATURE TREES

On behalf of our Families and Team Members, we extend to you the best of health, continued happiness and positive thoughts. “May you live as long as you want and never want as long as you live,” and do the right things in life for all the right reasons!

With Our Warmest Personal Regards,

McKenzie “Ken” Cook and THE MCKENZIE FARMS & SILVER MOUNTAIN TEAM

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