Backyard Farms rips up, replants entire crop due to white fly invasion; tomatoes unavailable till October

An employee picks tomatoes at Backyard Farms in Madison. The company's 23-acre greenhouse was completed last year and the first harvest was in January 2007. Currently there are about 340,000 tomato plants in the greenhouse, which employs 115 people.
Gabor Degre | BDN
An employee picks tomatoes at Backyard Farms in Madison. The company's 23-acre greenhouse was completed last year and the first harvest was in January 2007. Currently there are about 340,000 tomato plants in the greenhouse, which employs 115 people. Buy Photo
By Whit Richardson, BDN Staff
Posted July 17, 2013, at 5:40 p.m.

MADISON, Maine — Backyard Farms, which grows 27 million pounds of tomatoes a year in its greenhouses in Madison, last week began to rip up its entire crop of half a million tomato plants in an effort to eradicate an infestation of white flies.

The decision to replant its entire crop means the firm’s tomatoes, marketed as Backyard Beauties at supermarkets such as Hannaford and Shaw’s, will be unavailable until late October, according to Michael Aalto, a spokesman for Backyard Farms.

The company employs 200 people, and will not lay off any workers as a result of the decision to rip up the plants and clean out the greenhouses, Aalto said.

Aalto would not reveal how much the decision will cost the company, or whether the company had insurance to cover the destruction of its crop. But there’s no doubt such a business decision will affect the company’s bottom line, according to John Mahon, a professor of business at the University of Maine.

“No manager on Earth wants to turn the switch off,” Mahon said. “No one makes that decision lightly.”

The long-term consequences, however, shouldn’t be too harmful for the company, Mahon said. While most consumer products companies would tremble at the idea of taking their products off the market for three months for fear of competitors stealing their market share — think Coca-Cola versus Pepsi — Backyard Farms is somewhat immune to that scenario, Mahon said.

“People are going to switch in the interim, but the thing that helps [Backyard Farms] in this case is that when you come to December and January,” it’ll be the only source for Maine-grown tomatoes, Mahon said.

The timing of the crisis minimizes its potential damage for Backyard Farms. The company’s tomatoes are most in demand during wintertime, when local farm and home-grown tomatoes are unavailable. During the summer, however, Backyard Farms competes with those other options.

“They’re pulling tomatoes out of the supply right when the local stuff comes in, so it’s really good for local growers,” said Eric Sideman, organic crop specialist at the Maine Organic Farmers and Gardeners Association. “They don’t lose as much money because their tomatoes aren’t as much in demand and it’s better for the consumer because they have so many choices. They don’t have to buy Mexican hothouse tomatoes; they can buy local tomatoes this time of year.”

However, Aalto said the company did not delay its decision to rip up the crop until summer arrived. It was just a convenient coincidence.

“The fly issue had been taking place for a relatively short amount of time leading up to the cleanout,” Aalto said. “The timing where we made a decision to do a cleanout happened to coincide with the summer time frame.”

While it will inflict short-term pain on the company, any long-term consequences of the crisis will be mitigated by the fact that the company’s largest customers have pledged continued support. Spokesmen from Hannaford, Shaw’s and Whole Foods Market all said the grocery stores would start buying from Backyard Farms when the operation is producing tomatoes again.

“Whole Foods Market is committed to supporting our vendor partners in any way we can and we have been in regular contact with Backyard Farms throughout this difficult time,” Mike Bethmann, the store’s produce coordinator in the North Atlantic region, said in a statement provided to the BDN. “While we are currently sourcing elsewhere to continue stocking our stores, we are eager to begin purchasing from Backyard Farms again, just as soon as they are able to supply us.”

Hannaford was one of Backyard Farms’ first major customers and will begin buying its tomatoes again in October, said Michael Norton, a Hannaford spokesman.

“We’ve been with them from the beginning and our customers love their tomatoes,” Norton said.

The pledges to return to Backyard Farms are not purely because of altruistic tendencies, Mahon said. It makes good business sense for these stores to buy from Backyard Farms, he said.

Two factors make Backyard Farms a competitive option compared with tomatoes shipped from out of state: Its electricity is basically subsidized by the town of Madison, which has its own electric utility, and it’s within a day’s drive of all these stores, meaning the tomatoes are fresher and the transportation costs are less. Plus, there’s the added benefit of marketing Backyard Beauties as Maine-grown.

“It makes absolute sense for any large grocery chain to go right back to [Backyard Farms] once they start producing again,” Mahon said.

In the meantime, Hannaford and the other stores will look for alternatives. Norton said it will source its tomatoes from a mix of greenhouses in New York and Canada. He said store produce managers also have the ability to make deals with local farmers, who are just beginning to harvest hothouse and field tomatoes.

“There may not be a farmer with the right quantity or type of tomato in every market, but it could be an opportunity for some farms,” Norton said.

Bob Spear, owner of Spear’s Vegetable Farm in Nobleboro and a former Maine agriculture commissioner, sells his tomatoes to Hannaford and Shaw’s supermarkets in midcoast and central Maine. He said Backyard Farms’ troubles could create more demand for his crop.

“I think if Backyard is not going to be there, there’ll be more opportunity for our tomatoes to be sold,” he said. “There should be an increase in sales, but time will tell.”

http://bangordailynews.com/2013/07/17/business/backyard-farms-replants-entire-tomato-crop-will-be-out-of-markets-until-october/ printed on December 26, 2014