One of the creative ideas the company had was the use of its aloe vera plants as a fire barrier. This entailed a planting of aloe, a succulent (a plant which retains water in its leaves), around a homeowner’s property or the planting of wide strips of aloe around large, high-value areas such as entire subdivisions.

With the advent of the 2008 wildfire season in southern California that application may be worth a second look.

To get an idea of the area of impact, below is an October 26, 2007 graphic of some, if not most, of the California fire locations up to the date in 2007. Note that they are located all in the “no-freeze” area of Southern California, which allows for the growing aloe, since aloe cannot tolerate freezing temperatures.

The idea of using aloe as a “fire barrier” was presented to the county supervisors and other politicians in each of the southern California counties (Los Angeles, Orange, Ventura, Santa Barbara, San Bernardino, Riverside, San Diego, Imperial and others) as a possible way to favourably impact the chances of residents of surviving the 2008 Wildfire Season without destruction of their homes and property.
An environmentally-active friend of mine actually forwarded a copy of the December, 2007, Resource Investor article to every county supervisor in the area. (This explains part of the very high e-mail activity the article registered.) As a political novice he thought the possibility of helping the local politician’s constituency avoid destruction of their homes and property might be a bigger attraction to them than photo opportunities with, and small handouts to, the victims of these devastating wildfires. It appears his political ignorance regarding such issues led him astray. “Proacting” may not be as politically appealing as “reacting.”

He contacted US Farms management and asked if they had been contacted by members of the local government regarding the aloe fire barrier idea. It turns out, they haven’t, which mystified him. Honestly, it does me too. Here is a natural way to help homeowners protect their property in what is arguably the most environmentally-focused part of the country. There were testimonials regarding the effectiveness of the idea and it is a natural approach that should appeal to an environmentally-aware population. Besides, aloe plants, being succulents, are decorative and are widely used in dry climates to add green to an otherwise brown landscape. As such, the fire barrier idea seemed like a slam dunk to me. My friend recently advised me he will make another attempt to present it as a potential benefit to southern California politicians in the near future; likely after the wildfires destroy a few more areas or a few hundred homes.

As I write this article (June 2, 2008), the U.S. Forest Service website of active fires shows the following in Southern California (here is the link to the active fire page in tabular form, here is the link to the active fires in the U.S. map):

Monterey County; burning savannas on the Camp Roberts Military Reservation at 35.844N by 120.769W, 2.2 miles from Bradley, CA. Fire danger is considered “high.”
Monterey County; burning open shrublands on the Camp Roberts Military Reservation at 35.849N by 120.744W, 1.8 miles from Bradley, CA. Fire danger is considered “high.”
Monterey County; burning open shrublands on the Camp Roberts Military Reservation at 35.844N by 120.781W, 1.7 miles from Bradley, CA. Fire danger is considered “high.”
Monterey County; burning open shrublands on the Camp Roberts Military Reservation at 35.844N by 120.779W, 1.8 miles from Bradley, CA. Fire danger is considered “high.”
San Bernardino County; burning in urban and built-up area at 34.089N by 117.392W, 1.3 miles from Bloomington, CA. Fire danger is considered “low.”
San Bernardino County; burning in urban and built-up area at 34.089N by 117.393W, 1.3 miles from Bloomington, CA. Fire danger is considered “low.”
Ventura County; burning closed shrublands at 34.186N by 119.104W, 0.8 mile from Leesdale. Fire danger is considered “moderate.”
Ventura County; burning grasslands at 34.186N by 119.081W, 1.0 mile from Sucrose (historical site). Fire danger is considered “moderate.”
One major question, however, is if the aloe fire barrier idea caught on could US Farms supply enough aloe plants to the community to make such barriers worthwhile. US Farms produces about 4 million aloe “pups” per year from its 250,000 mature plants. Assuming plants are planted 1 yard apart and 5 rows deep, generating a 12-foot wide “fire barrier, it would take about 8,800 plants to produce one linear mile of “fire barrier.” If US Farms could make 3.5 million plants per year available to the market, it would equate to about 400 linear miles. This could prove significant in the southern California wildfire areas.

Once planted the aloe would remain for years, giving off its own small aloe plants for expansion or replacement of plants damaged by fire. With few natural enemies or animals that consume aloe for food, the greatest danger to the aloe barrier could well be the owners or members of the community, who might want to harvest the aloe for their own medicinal or cosmetic use.

A second question is what has US Farms been doing? Why weren’t they more actively pursuing selling the idea to the local homeowner and political organizations? It turns out they have had their hands full with a major expansion of the company – a vertical integration into the production of high-quality aloe juice and products. Being a small firm, with a small staff, they have had to dedicate their resources to the required additional facilities acquisition and, of course, the related financing requirements.

However, with completion of the purchase of the “state-of-the-art” manufacturing and bottling equipment covered by the Letter of Intent announced by US Farms on May 22, 2008, the company will be able to move up the value chain into the production and sale of high-margin, flavoured aloe vera juices and other manufactured aloe products. This is anticipated to be done under an established trade name, which the company is negotiating to acquire.

In the short run, this major expansion effort limited the resources US Farms could devote to other areas of the business. For the long run, however, it appears to have created a stronger and more vertically-integrated company, with the opportunity to operate in a higher-margin segment of the business – that of wholesale and retail sales of manufactured aloe products.

This was emphasized in the press release, where Yan K. Skwara, CEO of U.S. Farms, Inc., stated, "When consummated, this equipment acquisition, would enable US Farms, Inc. to leverage its current Aloe Vera Farming operations, which includes over 250,000 full grown Aloe Vera mother Plants, into a vertically integrated player in the $34 billion U.S. market for products containing Aloe Vera. In addition, the market opportunities and revenue potential, coupled with very attractive gross and operating margins, would enable us to increase shareholder value long term."

As interesting as the aloe play aspect of US Farms is, they will also continue in their current business; the growing, brokering and marketing of tomatoes, asparagus, garlic and greenhouse plants. These areas too have shown strong growth.

In early January, the company announced an excellent winter harvest of asparagus, and record 2007 sales in late January. In late March, the company announced a fulfilment agreement with Morgan Creek Tropicals, a major plant wholesaler, which allowed US Farms to maximize the use of their facilities. In April, record revenues of $9.5 million were confirmed for 2007. A week later a 42% increase in first quarter sales vs. 2007 was announced; taking sales for the period January through March to almost $2.4 million from a little over $1.67 million last year. While some of this gain did occur from the brokering of tomatoes and garlic, this line of business will be de-emphasized in the future.

Although US Farms produced a majority of its $9.4 million in revenue in 2007 from the brokerage side of produce, management today feels it clearly has a long term growth strategy in place with its aloe production where margins can run in the 100%-300% range, depending on the specific aloe-based product. Also, cash demands for the produce business are high for the relatively low margins, and this liquidity (cash) could be put to much more profitable use elsewhere in the company as it continues to grow and expand its aloe line of products. It will stay focused on aloe and all the revenue streams that can be created from this crop; aloe potted plants on the nursery side, aloe produce for the produce section in supermarkets, aloe sold in bulk form to nutritional product companies, and now, aloe juices and products on a wholesale and retail basis.

If the aloe fire barrier idea gains acceptance, the company may find itself as a key supplier of aloe landscape plants to southern California homeowners and who are seeking a natural or green solution to the problem of wildfires in areas where the demand for land has pushed development beyond natural limits. This could well establish US Farms as an environmentally-friendly or “green” (excuse the pun) supplier of natural alternative solutions to the problem of fire prevention and management and would offer US Farms an opportunity to market those plants it does not need for its own growing and harvesting operations.

With the financing to support expansion being finalized; improved margins from the aloe manufacturing and bottling operation; the continued strong performance of its tomato, garlic, asparagus and greenhouse plant growing business; and a potential boost from the implementation of aloe as a fire barrier plan; US Farms finds itself well positioned for the future.