Lack of sunshine and higher costs led Vancouver hothouse tomato producer Village Farms to a US$3.4 million net loss in its third quarter ending Sept. 30.
The company is billed as the biggest producer, marketer and distributor of greenhouse tomatoes, bell peppers and cucumbers in North America, with major greenhouses at Delta and Abbotsford, B.C. as well as in Texas and Pennsylvania, and distribution sites across Canada and the U.S.
But its financial picture will lead to the company stopping production of peppers and cucumbers in 2008, due to poor pricing on those products caused by oversupply, Village Farms said.
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That production will be farmed out to the company’s supply partners in Mexico and elsewhere in Canada, the company said in a release Wednesday.
The company, in its third quarter, also announced a deal to pay down debt by selling its 19-acre Abbotsford greenhouse for C$3.2 million. That deal is expected to close in the company’s fourth quarter.
Village Farms Income Fund CEO Michael DeGiglio said in the release that year-to-date earnings were disappointing but due to factors outside the company’s control — such as lower production caused by “historically low light levels” at the company’s greenhouse operations in both B.C. and Texas.
However, DeGiglio noted, Village Farms is expected to be in a better competitive position than some of its Canadian rivals going forward, because it reports and largely operates in U.S. dollars, which are now below par compared to the rising Canadian dollar.
The company’s $3.4 million Q3 net loss, down from a $677,000 net loss (all figures US$) in the third quarter of 2006, came on increased revenue of $24.5 million, up from $7.8 million in the year-earlier period.
The higher revenue came from $15 million in new sales through Hot House Growers, the Vancouver company that was merged into the Village Farms operation in October 2006, whereas only Village Farms’ U.S. sales were counted in the company’s 2006 figures.
