Evergreen Acres Christmas Tree Farm

Lindsay Fagnou

Elsa Guenther

Carmen Macnab

Earl Zimmerman

Introduction

1521 first Christmas tree in Alsace, Germany

1605 first decorated Christmas tree in Strasborg, Germany

Most Christmas tree farms are 3 generational

Mission Statement

To provide high quality, Saskatchewan grown Christmas trees, to the general public in an environmentally and customer friendly atmosphere.

Operations Plan

Business Overview

A Christmas tree farm on a 155 acre site4 different tree varieties grown:

Balsam fir (70%)

Balsam Fir

Business Overview

A Christmas tree farm on a 155 acre site4 different tree varieties grown:

Balsam fir (70%) White spruce (10%)

White Spruce

Business Overview

A Christmas tree farm on a 155 acre site4 different tree varieties grown:

Balsam fir (70%) White spruce (10%) Scotch pine (10%)

Scotch Pine

Business Overview

A Christmas tree farm on a 155 acre site4 different tree varieties grown:

Balsam fir (70%) White spruce (10%) Scotch pine (10%) Colorado (Blue) spruce (10%)

Colorado Spruce

Business Overview

A Christmas tree farm on a 155 acre site4 different tree varieties grown:

Balsam fir (70%) White spruce (10%) Scotch pine (10%) Colorado (Blue) spruce (10%)

Start planting 5 acres in year 1 and reach maximum production in year 15

LocationLocated near Meath Park,

30 kms NE of Prince Albert

Why There? Market Accessibility Climate Soil Type - sandy loam,

black/gray soil zone Land is currently in

summerfallow and hay

Equipment

Open Cab Tractor $12,000 Garden Tractor $4,500Sprayer $1,000Shaker $3,000Bailer $8,000Flat Deck Trailer $1,000Pruners 7@$110Shears 7@$100Chainsaws 2@$700

Equipment

Environmental ConditionsDrought is major risk factor involved

90% mortality rate in a bad drought year Lack of moisture can stunt growth of trees

Pests and Disease other major risk factor Increases in moisture and warmth increases pest and disease

infestations Cold winters in Prince Albert make conditions unfavorable

Management practices cannot get done if weather is not cooperating

Average Business YearMay - Incorporate Treflan and Sencor into planting site

- Plant 15,000 seedlings June - End of June shear and prune the Scotch pine July - End of July shear and prune rest of varietiesSeptember - Tinting of the Scotch pine

- Weed control using Round-upOctober - Harvest wholesale trees and store them as

neededNovember - Open the choose and cut service

Marketing Plan

Products and Service

Quality Christmas treeshome grown Christmas treesthree varieties of Christmas treeslandscape treesChoose and Cut Service

Pricing

Wholesale price decided by competition smaller orders - customer pays shipping larger orders - Evergreen pays shipping

Wholesale prices slightly lower than competition to attract customers that are importing trees from other provinces

Choose and Cut higher to compete with retailers

Promotion

Personal communication with customersword of mouthadvertising in newspapersoffering discountshot chocolate and cookies served at the

Choose and Cut

Place

Prince Albert areaurban centers in Saskatchewanrural community groups in Saskatchewanwholesalers in Alberta

Competitive AnalysisThere are 7 importers and 1 tree grower in

close proximitypopulation wanting artificial trees no other Choose and Cuts in the Prince

Albert area It would take 8 years for a competitor to

join the market

Marketing Strategy

“Our objective is to sell 600 trees a season through Choose and Cut by year 13.”

“Our objective is to sell 50% of our crop to Saskatchewan residents by Year 13.”

Human Resource Plan

Human Resources

One ownerRequirements

arrange transportation of needed supplies promote relationships with wholesalers marketing, operational, and financial skills hire, organize, and train the tree laborer staff maintain the equipment used

Owner

Christmas tree courseIdeal for an established farmer

Year 1 5 13 20Owner's income 2,000.00$ 3,060.00$ 30,000.00$ 44,000.00$

Seasonal Workers

Requirements class 5 drivers license willingness to work

hard good interpersonal

skills experience with trees

and machinery is an asset

On-site trainingDuties include

seeding pruning and shearing harvesting ‘Choose and Cut’

Workers wages

Year 1 5 13 20Hourly wage 8.00$ 8.66$ 10.15$ 11.65$

SeedingTotal Part-Time Workers 0 1 2 3Pruning/ShearingTotal Part-Time Workers 0 2 12 20HarvestingTotal Part-Time Workers 0 0 7 8

Total Part-Time Wages -$ 2,164.86$ 23,913.19$ 46,384.87$

Financial Plan

Financial Plan

Financial Plan spans over 20 year period profit is first seen in year 8 so a 20 year period

is needed to show realistic IRR and NPV

-50,000

0

50,000

100,000

150,000

200,000

250,000

1 3 5 7 9 11 13 15 17 19

Year

Dollars

Net Income(Loss)

Financing Plan

Common shares will be sold to the owner as well as family and friends.

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6Common Shares $150,000 $15,000 $15,000 $15,000 $15,000 $15,000

Year 1 Year 5 Year 10 Year 15 Year 20Dividends - - 5,412 42,821 92,883

Dividends = Net Profit * .50

Sensitivity Analysis

0

5

10

15

20

25

Internal Rate of Return

Sell

ing

Pri

ce

Seed

ling

Pri

ce

Dir

ect

Lab

out

Bal

sam

Fir

Whi

teSp

ruce

Sco

tch

Pin

e

Col

orad

oSp

ruce

WorstBaseBest

Survival Rate

Financial Ratios

23.1%25.8%32.4%26.1%23.0%Prod. Labour/Sales

217.337.8249.9283.5585.31Current Ratio

Year 20Year 15Year 10Year 5Year 1

ROE -3.2% -3.5% 5.5% 22.0% 23.2%

Future Considerations

Increase variety of treesIntroduce delivery to customersMore partnerships with retailersIncrease number of trees grownStart own nursery

Acknowledgments

Gordie McKay – McKay Tree FarmBill Brown and Marv Painter – U of SIrving John - John’s NurseriesHenry O’Reily - Come See Come Saw

Questions????