NOR T H A ME RIC A N F UR AUC T IONS
NAFA NEWS
APRIL 2014
> PRESIDENT’S MESSAGE > INVESTING IN YOUR FUTURE > EXTREMIST ALERT > E-MAIL UPDATES > LIVE MINK INSURANCE > FALL MARKETING UPDATE > UPDATED QUANTITIES
WHAT IS YOUR AUCTION HOUSE OFFERING YOU?
65 SKYWAY AVE. TORONTO, ON M9W 6C7 CANADA | TEL: +1.416.675.9320 | FAX: +1.416.675.6865 | WWW.NAFA.CA
P R E S I DENT’ S M ES S AGE Dear Rancher, During my tenure as President & CEO of NAFA, I have tried very hard to stay away from commenting on the obvious competitive battles at the auction house level, especially here in North America. In agreement with our board and rancher associations, I have always tried to take the “high road” approach and focus on what NAFA is doing. This is also the guidance that I have given to all of our staff, including of course, our solicitors. Now, however, I feel compelled to comment on recent events because I believe it is vital to the future of our industry and your well-being. We, at NAFA, have always believed that a well-organized, unified front here in North America is the only way to compete, given all that is happening across the rest of the world. We need this strong front for many reasons, including economies of scale, cost control, a united marketing program as well as the ability to bring valuable consignor services to our producers, just to name a few. But most importantly, we need to protect and enhance the superior high quality image of North American mink. Some people might then ask, “why have you gotten so big in Europe?” My answer is simple. Growing our company the way we have has helped us preserve the integrity of North American mink. It has generated the volumes that NAFA needs to attract a world class buying attendance to our auctions. It has provided us the profits and cash flow to reinvest in our business. For example, we have built a top quality facility in which to show off your high quality mink. We have attracted some of the best quality mink from Europe and incorporated only the absolute finest of them into our label program, thereby ensuring that NAFA, here in North America, has enhanced its reputation for offering the absolute finest fur in the world. NAFA, as well as producer representatives, have made countless attempts over the years to engage American Legend at every level to discuss a solution to work together on your behalf. I have had discussions at the management level and I know that some of our ranchers have attempted to have so-called farmer-to-farmer discussions. We have put in writing, including in our publications, open invitations for our two companies to work together for the common benefit of all North American producers. I myself have stated publicly that if I am a hindrance to the progress, I am willing to step aside. I have never heard that kind of commitment from anyone else, ever. Now, instead of any response to our many overtures for cooperation, we all have read ALC’s announcement of a long term alliance with SAGA without NAFA ever being first given any opportunity to further the discussion of joint marketing here in North America. What was once proclaimed to be a one year arrangement put in place to overcome apparent auction scheduling conflicts, now has ended up to be a key strategic initiative by ALC to partner with SAGA. Please take a moment to read the page opposite which highlights some of the issues that you should be considering when thinking about this new alliance. This isn’t about sour grapes, it’s about the future of the North American industry. More importantly, it’s about your future! One has to ask who is actually benefitting from this new alliance. For sure, one clear winner is SAGA. To their credit, they have a great deal. I will leave it to you, the North American ranchers, to figure out the rest. Sincerely,
Michael D. Mengar, President & CEO
INVES TIN G IN YOUR FUTU R E
The differences between NAFA and ALC auction houses have never been more clear. Now more than ever, it is important to note some of the benefits of marketing with NAFA: 1. NAFA has just finished paying out the final instalment of its $21 million in 2013 profit sharing dividend checks. Ranchers are now receiving money in cash this month. Imagine if we were working together. 2. Which auction house is investing in you and offering you more services? NAFA is continually looking to bring new value-added consignor services like our new and subsidized live mink insurance program to our producers. 3. Are the investments being made by your auction house paying off or being written off? NAFA has spent its capital in recent years buying new buildings and upgrading all of its facilities, and in growing our consignments. These are investments that are currently generating profits and building long term value for our consignor owners. 4. NAFA has grown its market share of North American mink by hundreds of thousands over the last several years. Further, NAFA will be offering approximately 10 million mink this year. 5. The new SAGA/ALC alliance is a missed opportunity for North American ranchers – a broad based North American partnership between NAFA and ALC would create an even more formidable force in the industry.
The averages below are based on all three labels. We believe these averages speak for themselves. Black Male
Female
NAFA
ALC
NAFA
ALC
$77.11
$79.40
$49.67
$50.64
Mahogany Male
Female
NAFA
ALC
NAFA
ALC
$68.38
$65.33
$47.31
$42.85
Demi Wild / Dark Brown Male
Female
NAFA
ALC
NAFA
ALC
$59.07
$54.21
$40.99
$35.78
Pastel Male
Female
NAFA
ALC
NAFA
ALC
$87.26
$90.79
$63.77
$63.78
Blue Iris Male
Female
NAFA
ALC
NAFA
ALC
$79.18
$90.64
$52.35
$53.01
Sapphire Male
Female
NAFA
ALC
NAFA
ALC
$74.21
$71.52
$56.01
$49.70
White Male
Female
NAFA
ALC
NAFA
ALC
$91.77
$84.11
$67.99
$64.69
Palomino Male
Female
NAFA
ALC
NAFA
ALC
$88.38
$88.73
$75.27
$63.09
All ALC numbers were uploaded from the official ALC website.
CANADIAN RANCHERS – EXTREMIST ALERT Animal rights extremists have been busy in Canada recently, gathering “undercover videos” at farms. So far this year, footage of animal abuse has been released from pig farms, egg farms, turkey and veal. Unfortunately, more undercover videos are expected. Each video is given to national investigative news programs.
We encourage all farmers to take note of this and be aware of the following: Discuss with employees the importance of continuing to care for animals with respect, and maintain a zero tolerance approach to animal abuse. Be very selective about who you hire and consider having employees sign an Animal Care Code of Conduct. The Code clearly emphasizes the importance of good animal care and reporting any incidence of animal abuse immediately. · Monitor access to barns and take note of suspicious vehicles parked near farms or facilities. · Be wary of requests such as media calls, students doing school projects or people looking for jobs.
Other IMPORTANT INFORMATION on extremists: **Animal rights campaigns are not limited solely to undercover videos, but also to mink releases and other illegal tactics as well. DO NOT ASSUME THAT living in a rural or remote location protects you – extremists want to target remote locations and most mink releases occur in remote locations.
E -MAI L UPDATES NAFA would like to ensure you are receiving your NAFA correspondence promptly and in the manner you like. Please take a moment to fill out the survey below to ensure your fax number, e-mails and addresses we have on file are accurate. Please include all e-mail addresses that you think should receive NAFA e-mails, newsletters, bulletins, auction information. Please return to NAFA Attention: Nancy Daigneault 65 Skyway Avenue Toronto, Ontario M9W 6C7
NAME:
FARM NAME:
FARM FAX #:
E-MAIL ADDRESS(ES) OF THOSE WHO SHOULD RECEIVE NAFA E-MAILS: HOW WOULD YOU LIKE TO RECEIVE NAFA CORRESPONDENCE: E-MAIL FAX MAIL ALL THREE
L I V E M INK & FOX IN S URAN C E nafa's live mink insurance is another value - added service that protects you and your mink crop This is an insurance program that NAFA will help you pay for. It is designed to cover your mink livestock like none other and it has never been available before in North America. It is important to remember the following: •
•
It is offered to loyal NAFA shippers only Covers diseases, except AD, and includes heat stress and mink releases
questions and answers : 1. What does the insurance cover? A) Loss of animals by theft, robbery, hold-up or escape B) Loss caused by animal rights activists C) Death caused by diseases, subject to vaccine protocol (NOT INCLUDING AD, see question #2) D) Loss caused by fire, lightning, storm, flood, explosion and additional perils (see policy) E) Death resulting from damage to the housing of the animals F) Loss as a direct result of extreme temperature changes.
2. Will it insure for Aleutian Disease? No. However, if your farm has AD tolerant mink, with less than three percent mortality, and you experience a loss from another disease like botulism or distemper, a claim can be made under that disease.
3. What happens if one mink dies, do I claim it? No. One mink dying doesn’t warrant a claim. The deductibles are for five percent of the total mink value that you have insured. For example: if you have $50,000 mink insured, you would have to lose more than $2,500 worth of mink to be able to make a claim.
4. What if I don’t have a fence, can I still get the insurance? Yes. You are eligible for insurance but your deductible may be higher. This is because the lack of a fence could put you at a higher risk for escape or a release by animal rights activists. All of this is assessed on a farm by farm basis.
5. What if I had claims in the past, can I still get insurance? Most often the answer is yes. You will be asked to describe the claims in detail and outline all the steps you’ve taken to try to prevent the same type of claim from occurring again.
American ranchers: If you have any questions, please contact April Finch, Divisional Director afinch@milessmith.co.uk or Chris Perry, cperry@milessmith.co.uk Canadian ranchers: If you have questions, please contact Christy Bourque at Mitchell McConnell Insurance christineb@mitchellmcconnell.com
THE NAFA SPRING FOX SALE IS SET TO BEGIN MONDAY MAY 19, OFFERING 30,000 SILVER RANCH FOX The most recent fox auctions have showed better support of better quality, well covered fox pelts. We anticipate the addition of the European foxes to the North American collection to increase the broker buying volumes. In general, ranch fox sales worldwide have been very difficult in the past year and a half with all auction companies experiencing problems with clearances and prices. We believe there is a market for ranch fox, but at discounted levels.
MARKETING P R OGR AMS UP DAT E With the close of the fur retail season in most major markets, the time has come to fully assess the situation and plan for the upcoming year. NAFA is working closely with long time co-op partners and also negotiating with some of the newer groups that have formed. Whilst continuing to monitor the traditional markets and promote wherever possible, a few key regions are being targeted. We will issue a market bulletin in advance of our May auction.
Established Markets Developing Markets Emerging Markets
GREEK ISLANDS: Retail fur sales to Russian tourists were lackluster in 2013 but major shops feel the new 2014 price structure will reignite sales. Plans are underway to co-op with some of the new mini malls that are preparing to open to capitalize on the summer tourist season.
RUSSIA: The primary markets in Moscow and St. Petersburg experienced very slow retail sales. Weather and price resistance were the main reasons. NAFA will continue to host the annual gala show in the fall to support the trade and to secure the media coverage that is instrumental in brand building.
DUBAI: Fur retailers in Dubai fared better than many of the other Russian tourist destinations. Sales were off due to price resistance; now all believe that the coming season will be more profitable. NAFA will continue promotions with the most prominent fur stores in Dubai.
CENTRAL ASIA: The emerging market of Kazakhstan shows considerable potential for attracting new buyers to the auction and also an opportunity to promote to the retail consumer as the market develops. An entry-level campaign is being planned.
CHINA: Key retail partners in Beijing and Northeast Provinces have already committed to expanded promotion for the fall/winter selling season. These are upmarket retailers who finished the year with minimal inventory and feel there are new opportunities to take advantage of.
EASTERN EUROPE: Many of the countries bordering Russia are developing stable markets. The affluent societies in the major cities have shown the same affinity for fur as their Russian ancestors. NAFA has a multi-year plan to launch and promote the brand throughout the region. The first events are planned for fall 2014.
PRESS RELEASE NAFA ANNOUNCES UPDATES TO OUR QUANTITIES AND ORDER OF SALE NAFA has updated its quantities and order of sale for the May 2014 auction, with some adjustments to ensure a timely daily selling schedule. This new order of sale takes into consideration the increase in NAFA’s overall mink and wild fur offering. Our overall mink offering now stands at 5.3 million.
NAFA NEWS is published by
NORTH AMERICAN FUR AUCTIONS 65 Skyway Avenue, Toronto, ON, M9W 6C7, Canada www.nafa.ca
TORONTO, ON Tel : 1.416.675.9320 Toll Free : 1.800.745.0693 Fax : 1.416.675.6865
STOUGHTON, WI Tel : 1.608.205.9200 Toll Free : 1.800.872.3877 Fax : 1.608.205.9210