Our cooperative had a particularly challenging year. Given the tremendous amount of hail and russeted fruit at the beginning of harvest, Tree Top expected to have a large crop of culls to process and market. That is not how the year unfolded. While orchard run deliveries were at budgeted levels, off line culls over the balance of the marketing year were significantly less than budgeted.

While we were enjoying the higher-than-usual demand for our apples on the fresh market, and earning higher-than-usual prices for them, our cooperative was busy trying to make more with less. It’s been a number of years since Tree Top received such a small crop of processors. And, it appears this year may be even more challenging, as Tree Top is anticipating receiving even less tonnage from the 2007 crop than from the 2006 crop.

This year, our performance is less than it has been for many years. Total proceeds to members are slightly better than break even. Clearly, it’s not what we expect.

Tree Top management kept your Board of Directors fully apprised of the situation as the year progressed. Your Board and management are intensely focused on understanding what we must do to improve our performance both in terms of total returns to growers and strengthening Tree Top as a corporate entity to ensure our success over time.