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June/July 2013 McKenzie Farms Green Express Newsletter

MCKENZIE FARMS GREEN EXPRESS……..JUNE/JULY 2013

MCKENZIE FARMS HAS NEW OWNERSHIP……... I RECENTLY GIFTED 50% OF MCKENZIE FARMS.

(25% EACH TO MY DAUGHTER, CAREY ANDERSON AND MY SON, TOM COOK) CAREY AND TOM HAVE BEEN ACTIVE IN THE BUSINESS FOR MANY YEARS AND HAVE DISPLAYED THE PASSION, THE CONVICTION, THE PERSEVERANCE AND THE COMMITMENT TO CONTINUE THE MCKENZIE FARMS TRADITION. AS I PASS THE TORCH, I AM CONFIDENT THAT OUR ASSOCIATES, OUR GROWERS AND OUR CUSTOMERS WILL CONTINUE TO EXPERIENCE THE HIGHEST QUALITY AND A WINNING FORMULA FOR SUCCESS.

MY REMAINING LIFE’S JOURNEY WILL BE THAT OF A FATHER, A MENTOR AND A CONSULTANT. MY DEVOTION AND PASSION FOR THIS INDUSTRY WILL NEVER BE FAR REMOVED FROM OUR STANDARDS OF PERFORMANCE, OUR BUSINESS VALUES AND OUR SUCCESSION PLAN. IN BUSINESS EVERYONE MUST BE ACCOUNTABLE, SUCCESSFUL AND SHARE IN THE VICTORIES.

THE YEAR 2012 WAS A CHALLENGING YEAR FOR OUR COMPANY AND THE CHRISTMAS TREE INDUSTRY. WE RECORDED THE HIGHEST NUMBER OF UNITS SHIPPED AND THE HIGHEST NET SALES IN OUR HISTORY IN SPITE OF THESE RECORDS, THE COMPANY WAS ONLY MARGINALLY PROFITABLE. OUR SITUATION WAS BETTER THAN MOST GROWERS WHO EXPERIENCED RED INK AND CASH FLOWS THAT DID NOT COVER THE COST OF REPLANTING AND THE ANNUAL REQUIRED MAINTENANCE. COMPANIES WITHOUT A STRONG CUSTOMER BASE AND SOUND BANKING RELATIONSHIPS ARE IN JEOPARDY OF LOSING THEIR BUSINESSES.

THE CHALLENGES WE FACE AS AN INDUSTRY HAVE BEEN BROUGHT ABOUT AS A RESULT OF OUR PAST MISTAKES. TEN YEARS AGO, THE GROWERS EXPERIENCED A HIGHER THAN AVERAGE WHOLESALE PRICES. THIS RESULTED IN MANY FARMERS ENTERING THE CHRISTMAS TREE GROWING CYCLE WHICH IN TURN RESULTED IN A NINE MILLION TREE OVER PRODUCTION. THE RULE OF SUPPLY AND DEMAND CAUSED PRICES TO DROP 10-20% . IN ADDITION, THE “BIG BOX” ACCOUNTS ASKED FOR VENDOR MANAGED PROGRAMS AND MORE IN STORE SERVICE. THIS ALL OCCURRED AT A TIME WHEN FREIGHT, GROWING AND HARVEST PRICES WERE INCREASING BY 30-40%. THE COMBINATION OF LOWER PRICES, INCREASED SERVICES AND INCREASED COSTS DEALT A FATAL BLOW TO THE NURSERY AND CHRISTMAS TREE INDUSTRY. WHO IS TO BLAME? WE ALL ARE TO BLAME.

I ALWAYS TRIED TO MAINTAIN A POSITIVE MENTAL ATTITUDE AND I LOOK WITH OPTIMISM TOWARD THE FUTURE. WHY YOU ASK? QUITE SIMPLY, THIS IS WHO I AM. IT HAS BEEN SAID THAT IF YOU THINK POSITIVE THOUGHTS, YOU WILL FIND HAPPINESS AND SUCCESS. SUCH WAS THE CASE AT OUR RECENT SPRING MANAGEMENT CONFERENCE IN DEL MAR, CALIFORNIA. OUR MANAGEMENT TEAM REVIEWED THE PAST YEAR AND SET FORTH A SUCCESSFUL PLAN FOR 2013. I HAVE GREAT PRIDE AND PRAISE FOR THE MCKENZIE FARMS TEAM OF CAREY ANDERSON, JOHN ANDERSON, TOM COOK, DAVE MANN, GAYLENE MANN, KRISTINA ROBERTS, DEBBIE TEDROW AND CHRIS REZNICSEK. WE GROW QUALITY CHRISTMAS TREES, BUT OUR GREATEST ASSET IS OUR PEOPLE.

THIS SPRING, JOHN ANDERSON AND HIS TEAM HAVE PLANTED OVER 600,000 SEEDLINGS. THEY BEGIN THEIR EIGHT YEAR JOURNEY WITH HARVEST SCHEDULED FOR 2021-22. WE CURRENTLY HAVE AN INVENTORY IN EXCESS OF 4.5 MILLION TREES AND A SUSTAINED YIELD OF 500,000 TREES PER YEAR. OUR PLAN FOR 2013 IS TO SELL AND HARVEST 700,000. THE ADDITIONAL TREES OVER OUR CURRENT YIELD COME FROM 10-15 COMMITTED AND DEDICATED NET WORK GROWERS. MANY OF THESE GROWERS HAVE BEEN ASSOCIATED WITH US FOR OVER 20 YEARS.

WE HAVE RECENTLY COMPLETED FERTILIZING THE TREES, PLACING THE HERBICIDES FOR WEED CONTROL AND SPRAYING THE PESTICIDES FOR CONTROL OF THE PREDATORS THAT COMPROMISE THE QUALITY OF OUR CHRISTMAS TREES. WITHIN THE NEXT 45-60 DAYS, THE HAND SHEARING WILL COMMENCE. SOON AFTER THE SHEARING STARTS THE TAGGING TEAM WILL START THE CHRISTMAS TREE SELECTION PROCESS. HARVEST 2013 IS ONLY A LITTLE OVER FIVE MONTHS AWAY.

IT IS ONCE AGAIN TIME FOR ME TO LOOK INTO THE 2013 CRYSTAL BALL AND PREDICT OUR CHRISTMAS TREE SELLING SEASON. UNIT SELLS WILL INCREASE 3-4% AND DOLLARS WILL INCREASE 4-5%. GROWERS WILL EXPERIENCE A SLIGHT PRICE INCREASE DUE TO THE TIGHTENED SUPPLY OF QUALITY CHRISTMAS TREES. LOOK FOR FUEL AND HARVEST COSTS TO REMAIN STABLE WHICH WILL BE A POSITIVE EVENT FOR THE CHRISTMAS TREE INDUSTRY AND OUR CUSTOMERS. THE CURRENT ADMINISTRATION SCANDALS PLAGUING OUR GOVERNMENT AND ECONOMY WILL FADE INTO THE SUNSET AND CONSUMER CONFIDENCE WILL RISE. YES, 2013 WILL BE A SLIGHTLY BETTER YEAR FOR THE GROWERS AND A GOOD YEAR FOR RETAILERS AND CONSUMERS.

WE WILL SOON BE SENDING OUT THE MCKENZIE FARMS LIMITED EDITION “ANNIVERSARY COIN”. PLEASE ACCEPT IT WITH OUR RESPECT, APPRECIATION AND OUR GRATITUDE. THIS IS MCKENZIE FARMS TWENTY-THIRD YEAR OF GROWING SIGNATURE QUALITY CHRISTMAS TREES BACKED BY A DEDICATED MANAGEMENT TEAM THAT UNDERSTANDS WHAT IS REQUIRED TO SERVE YOU.

ALWAYS THANKFUL! ALWAYS A PLEASURE! WE WISH YOU CONTINUED GOOD HEALTH, HAPPINESS AND SUCCESS AND OUR WARMEST PERSONAL REGARDS,

MCKENZIE “KEN” COOK & THE MCKENZIE FARMS FAMILY

WWW.MCKENZIEFARMS.ORG

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