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CORRECTION - McKenzie Farms Green Express July / August Newsletter

IT IS ALWAYS A PLEASURE FOR ME TO SIT DOWN AT MY COMPUTER TO SHARE THE LATEST NEWS OF THE CHRISTMAS TREE INDUSTRY AND UPDATE YOU WITH THE LATEST HAPPENINGS AT MCKENZIE FARMS.

AS YOU ALL KNOW, WE ARE A VERY SMALL INDUSTRY WITH ONLY NINE MAJOR PLAYERS AND ELEVEN MID-SIZE COMPANIES. THESE TWENTY COMPANIES ARE PRIMARILY CONCENTRATED IN ONLY FIVE STATES….OREGON, WASHINGTON, NORTH CAROLINA, VIRGINIA AND MICHIGAN.

ANNUALLY THERE ARE TWENTY-TWO MILLION CHRISTMAS TREES SOLD OF WHICH TWELVE MILLION ARE HARVESTED AND SHIPPED BY THOSE TWENTY COMPANIES. THE INDEPENDENT OWNERS ARE COMMITTED TO MAINTAINING THE HIGHEST STANDARDS OF QUALITY, SERVICE AND STEWARDSHIP OF THE LAND. BECAUSE WE ARE A SMALL INDUSTRY, WE KNOW EACH OTHER AND SHARE INFORMATION FOR THE BETTERMENT OF OUR INDUSTRY.
AS A CHRISTMAS TREE GROWER, WE MUST HAVE AN INVENTORY OF EIGHT TIMES WHAT WE SELL EACH YEAR. WE SELL 600,000 TREES ANNUALLY AND THEREFORE REQUIRE AND INVENTORY OF 4,800,000 TREES. WHAT WE PLANT IN 2012 WILL NOT START GOING TO MARKET UNTIL 2018. BASED ON TURNING OUR INVENTORIES ONCE EVERY EIGHT YEARS, WE HAVE THE SLOWEST TURN OF INVENTORY IN THE AGRICULTURAL SECTOR. WITH AN AVERAGE EIGHT YEAR INVESTMENT OF $3.50 PER TREE, THE RETURN ON INVESTMENT IS THE LOWEST OF ANY INDUSTRY. WHY DO WE DO IT? WE GROW AND SELL CHRISTMAS TREES BECAUSE WE LOVE WITNESSING MOTHER NATURE AT WORK, PROVIDING A BETTER ENVIRONMENT AND BEING PART OF A 500 YEAR TRADITION.

WHEN SEARCHING FOR THE HISTORICAL BEGINNING OF THE FIRST CHRISTMAS TREE, ONE MUST GO BACK FAR INTO THE PAST. THE FIRST DOCUMENTED USE OF AN EVERGREEN TREE IN A CHRISTMAS CELEBRATION WAS IN RIGA, LATVIA IN THE YEAR 1510. THE CHRISTMAS TREE WAS ERECTED IN THE TOWN SQUARE AND WAS DECORATED WITH PAPER FLOWERS AND DRIED FRUIT. THE DECORATED TREE BECAME EXTREMELY POPULAR, AND 500 PLUS YEARS LATER, THE TRADITION CONTINUES. TODAY, THE FRESH CUT CULTURED CHRISTMAS TREE BRINGS THE MEANING OF CHRISTMAS AND HAPPINESS TO MILLIONS OF FAMILIES. AS A GROWER, IT IS REWARDING TO BE PART OF A 500 YEAR TRADITION. IT SHOULD BE NOTED THAT THIS TRADITION DIDN’T START WITH A PLASTIC CHRISTMAS TREE.

HOW MANY TIMES HAVE YOU HEARD SOMEONE SAY, “IT’S BETTER TO BUY AN ARTIFICIAL CHRISTMAS TREE THAN TO CUT DOWN AN EVERGREEN EVERY YEAR”. SURE, FAKE TREES MIGHT BE USABLE YEAR AFTER YEAR, BUT THE REAL QUESTION COMES DOWN TO RENEWABLE COMPARED TO NONRENEWABLE RESOURCES. WHEN YOU HARVEST A TREE, ANOTHER CAN AND WILL BE GROWN IN ITS PLACE. MOST IMPORTANTLY WHEN YOU’RE FINISHED WITH THE TREE IN YOUR HOME, IT CAN BE TURNED INTO MULCH, SO THE TREE HAS A LIFE THAT CONTINUES. SOME 350 MILLION CHRISTMAS TREES AND SEEDLINGS ARE NOW GROWING ON FARMS IN THE UNITED STATES, AND AS THEY GROW, THEY START TO STORE CARBON. THE FRESH CUT CHRISTMAS TREE IS RIGHT FOR THE ENVIRONMENT. REMEMBER, ARTIFICIAL TREES ARE MADE FROM NONRENEWABLE PLASTICS AND 94% ARE MANUFACTURED IN CHINA. THE CHRISTMAS TREE TRADITION WILL ALWAYS BE GREEN AND AN IMPORTANT PART OF OUR AMERICAN HERITAGE.

DURING THE LATTER PART OF APRIL, THE MCKENZIE FARMS ANNUAL SPRING MANAGEMENT MEETING WAS HELD IN CARLSBAD, CALIFORNIA . THE PURPOSE OF THE MEETING WAS TO REVIEW THE PRIOR YEAR ACTIVITIES AND SET FORTH A BUSINESS STRATEGY AND STANDARDS OF PERFORMANCE FOR THE CURRENT YEAR. THE MANAGEMENT COMMITMENT FOR 2012 WILL TRANSFORM A PROMISE INTO REALTY. OUR BUSINESS STRATEGY IS DRIVEN BY HOW WE CAN BETTER SERVE OUR CUSTOMER. TODAY’S INVESTMENTS, PLANNING AND PREPARATIONS DETERMINE TOMORROWS SUCCESSES

CLOUD COMPUTING BECAME A REALITY FOR MCKENZIE FARMS IN 2011. THE TEAM OF CAREY ANDERSON, KRISTINA ROBERTS, DEBBIE TEDROW AND GLENDA SAUNDERS AND OUR OUTSIDE CONSULTANT, TOM BILBY HAVE DONE AN OUTSTANDING JOB OF MAKING THE TRANSFORMATION FROM YESTERDAY TO TODAY. CLOUD COMPUTING HAS ALLOWED US TO GET OUR APPLICATIONS UP AND RUNNING FASTER, WITH IMPROVED MANAGEABILITY AND LESS MAINTENANCE. IN ADDITION, IT ALLOWS US TO MOVE RAPIDLY AND ADJUST TO FLUCTUATING AND UNPREDICTABLE BUSINESS DEMANDS. OUR MANAGEMENT IS ABLE TO ACCESS CLOUD-BASED APPLICATIONS THROUGH A WEB BROWSER, LIGHT WEIGHT DESKTOP OR MOBIL APPLICATIONS WHILE THE BUSINESS SOFTWARE IS STORED ON SERVERS AT A REMOTE LOCATION. YES, CLOUD COMPUTING WILL GIVE US A COMPETITIVE EDGE AND IS THE WAVE OF THE FUTURE.

DURING THE PAST TWO MONTHS MCKENZIE FARMS HAS PLANTED OVER 500,000 NEW SEEDLINGS. IN ADDITION WE REPLACED 50,000 TREES FROM THE PRIOR YEARS PLANTINGS. EVERY TREE IS DIFFERENT, EVERY FIELD IS DIFFERENT, AND FOR QUALITY STANDARDS ONLY 75-80% OF WHAT IS PLANTED IS EVER HARVESTED. THE HIGHER THE GRADE STANDARD, THE LOWER PERCENTAGE OF TREES THAT ARE HARVESTED.
WITHIN THE NEXT THIRTY DAYS THE SHEARERS WILL START SHEARING THE TREES. SOON AFTER, JOHN ANDERSON AND HIS CREWS WILL BEGIN THE SELECTION AND TAGGING PROCESS THAT WILL NOT BE FINISHED UNTIL LATE OCTOBER. OUR OVERALL INVENTORIES ARE IN GOOD SHAPE, WITH STRONG NUMBERS IN BOTH DOUG FIR AND NOBLE FIR.

WE ARE CURRENTLY SEEING A REDUCTION IN THE COST OF DIESEL FUEL. IN 2009 DIESEL FUEL WAS AT $2.25 PER GALLON. TODAY, DIESEL IS RUNNING AROUND $3.60 PER GALLON. THE GOOD NEWS IS THAT IT SHOULD BE IN THE $3.00-$4.00 RANGE FOR 2012 AND NOT $5.00 PER GALLON THAT I FIRST FEARED. FOR EVERY .10 CENT INCREASE IN FUEL COST, IT COSTS .02 MORE TO SHIP A TREE.

THE REDUCTION IN FUEL COSTS AND THE REDUCTION IN CHRISTMAS TREE INVENTORIES IS IMPORTANT FOR THE SURVIVAL AND SUCCESS OF THE CHRISTMAS TREE INDUSTRY. IN ADDITION, WITH THE CURRENT IMMIGRATION RULING, WE SHOULD HAVE AN ADEQUATE WORK FORCE. ALL OF THESE EVENTS ALONG WITH AUSTERITY MEASURES WILL MAKE ALL OF US STRONGER.

RECENTLY THE CHRISTMAS TREE INDUSTRY LOST TWO RESPECTED PIONEERS. DELBERT HUPP, FOUNDER OF DRAKES CROSSING TRANSITIONED INTO HEAVEN. HE LEAVES BEHIND HIS LOVING WIFE BARARBA HUPP AND FAMILY. CARL MESSICK, OWNER OF SILVER RIDGE CHRISTMAS TREES PASSED AWAY IN LATE MAY. BOTH OF THESE GENTLEMEN WERE LEADERS IN OUR INDUSTRY AND WILL BE MISSED, BUT NEVER FORGOTTEN.

IN FOUR SHORT MONTHS, HARVEST 2012 WILL COMMENCE. WE INVITE YOU TO COME BY AND TOUR OUR FIELDS WITH TOM, CAREY, JOHN OR MYSELF. IF YOU WANT THE BEST IN QUALITY, THE BEST IN SHIPPING AND THE BEST SERVICE; COME AND SEE THE MCKENZIE FARMS ADVANTAGE. OUR TWENTY-TWO YEAR HISTORY WAS BUILT ON HARD WORK AND MAKING OUR CUSTOMER THE PURPOSE OF OUR WORK.

WE WISH EACH OF YOU THE BEST OF HEALTH, CONTINUED SUCCESS AND HAPPINESS WITH OUR WARMEST PERSONAL REGARDS.

MCKENZIE “KEN” COOK & THE MCKENZIE FARMS FAMILY

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