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Village Farms: low prices affect first quarter


May 15, 2012
By Dave Harrison

May 15, 2012, Vancouver — Low tomato prices are having an effect on at least one major North American grower/marketer.

May 15, 2012, Vancouver — Low tomato prices are having an effect on at least one major North American grower/marketer.

Village Farms International, Inc. released its results for the quarter ending March 31 yesterday. Revenues decreased 13 per cent to $28.2 million for the first quarter of 2012 compared to $32.3 million for the first quarter of 2011.

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The decrease in revenue is primarily due to a 17 per cent decrease in the average selling price of tomatoes as compared to the same quarter in 2011.

“Pricing in our core tomato varieties continues to remain challenging and since mid-March is substantially below our budget and prior year,” said chief executive officer Michael DeGiglio.

“This is directly due to continued oversupply from Mexico coupled with flat demand in both the U.S. and Canada. The flooding of the market by growers and importers, at pricing at or below cost of production, borders on, in my opinion, “dumping” and is negatively affecting the entire industry.”

COMBATING IMPORTED "IMPOSTER" PRODUCTS
The company, he continued, continues to aggressively implement its strategy to combat this pricing pressure. “This includes internal changes in variety assortment, customer collaboration and working directly with federal and state governments to combat imported imposter products, mis-labelled as greenhouse grown.”

On a more positive note, the company has been quite impressed with production and quality of its new GATES® technology in Monahans (Texas), “although labour availability remains a challenge.”

In early April, the British Columbia Ministry of Agriculture announced that “B.C.’s high-tech greenhouse vegetable and floriculture growers will receive $7.6 million from the province in carbon tax relief … ”

Village Farms estimates its refund to be about $1 million. The funds are being distributed by the B.C. Greenhouse Growers Association and are going to be distributed in July.

ABOUT VILLAGE FARMS
Village Farms is one of the largest producers, marketers and distributors of premium-quality, greenhouse-grown tomatoes, bell peppers and cucumbers in North America.

This premium product, as well as premium product produced under exclusive arrangements with other greenhouse producers, is grown in sophisticated, highly efficient and intensive agricultural greenhouse facilities located in British Columbia and Texas.

Product is marketed and distributed under the Village Farms® brand primarily to retail grocers and dedicated fresh food distributors throughout the U.S. and Canada.

Since its inception, Village Farms has been guided by sustainable agricultural principles that integrate three main goals – environmental health, economic profitability, and social and economic equality.

The complete first-quarter report is posted to the company's website.


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