The B.C. farm at the heart of the world’s largest producer and exporter of North American ginseng will wind down over 25 years in business Saturday as its farm equipment goes up on the auction block.
Richmond-based Chai-Na-Ta Corp., which in 2003 made the Globe and Mail’s list of Canada’s 1,000 largest publicly traded companies, will host an unreserved equipment auction May 9 at its Cherry Creek farm near Kamloops.
The company’s decision to wind down its B.C. ginseng-growing operations follows a run of underwhelming returns, most recently a net loss of $4.7 million on $9.2 million in revenue in fiscal 2008, down from a $3.3 million loss on $7.6 million in 2007.
The company has opted to cut its losses and get out of the ginseng business in B.C., after trying to work through a major decline in demand for ginseng and ginseng products and a 75 per cent drop in commodities prices over the last decade. Its 200-acre Cherry Creek farm is now hayland.
“We anticipate that a corresponding decrease in price will occur in view of the deteriorated purchasing power of consumers,” Chai-Na-Ta chairman Derek Zen said March 23 on the release of the company’s 2008 financials.
“We will continue our focus on maximizing yield and quality while minimizing farm costs and operating expenses in 2009… We believe that the production of high-quality root at a minimal cost will be the way to sustain ourselves during this recent global financial crisis.”
Zen said at the time that he expects 2009 to continue to be “challenging” for the company’s ginseng growers.
Chai-Na-Ta produces and sells North American bulk root ginseng and processed extract ginseng powder. It began operating in B.C. in 1981, planting its first ginseng crop in 1982 on just five acres.
By 1998, Chai-Na-Ta Farms had expanded into a 1,500-acre cultivation operation with an annual ginseng harvest of up to a million pounds, or about 20 per cent of total global production.
“Can be modified”
The auction, starting at 9 a.m. Kamloops time, is expected to feature over 1,000 agricultural items from Chai-Na-Ta Farms and other consignors, including 2-WD and 4-WD tractors, cultivators, trucks, trailers, recreational vehicles and other ag equipment, plus “a number of specialized items unique to ginseng production.”
“It’s a very rare opportunity for people to purchase agricultural equipment at a Ritchie Bros. auction in southern B.C.,” said Blake Lind, territory manager for Ritchie Bros. Auctioneers, in the auction firm’s release Wednesday.
“Pretty well all of this equipment can be used or modified for use on a small farm or large-scale harvesting operation.”
But among the more unique items to be sold are about 400 acres of Lumite shade cloth, used to simulate growing conditions similar to that of North American ginseng’s natural habitat of the hardwood forest floors of eastern North America.
Ginseng, which is sensitive to direct sunlight and grown over a four-year period under controlled conditions, requires a protective barrier such as Lumite. The shade cloth in the auction will either be cut up into 10-acre lots for use on smaller farms or into one-acre lots for use as windbreaks or patio and pool covers. About 500 miles of quarter-inch cable used in suspending the shade cloth over crops will also be sold.
Other unique items expected on the block include fruit bins (grouped in lots of 60), dump bins, weather stations, distillers, pole sprayers, sprinkler heads and scientific ovens, Ritchie Bros. said Wednesday.