VALE – A Canadian mushroom company has cancelled plans to build in Vale, citing new tariffs on building materials like steel, currency rates and changes in the market.
“Things have changed,” said Andrew Truong, project manager for Farmers Fresh Mushrooms. “We are now looking within Canada for expansion, not in the United States.”
Truong said the company board decided last Thursday to end its pursuit of the Vale location.
According to Truong, one of the first items discussed by the board was the newly implemented tariffs put into place by the United States.
“With the new tariffs on steel and building supplies in place by the U.S., we figure our building costs rise at least by 10 percent,” said Truong. “When looking at a $15 to $20 million investment, that is just too high.”
According to Truong, initial work before crews started the actual construction was estimated at $3 million. That cost has now risen to $5 to $6 million with changes in the currency rate and other factors.
“We have been looking at grants and some other avenues, but we are looking inside Canada now for further expansion,” Truong said.
A changing marketplace has also come into play.
According to Truong, two large mushroom facilities in Canada have recently been purchased, one by an Irish company and one by a U.S. company.
Farmers Fresh started looking in the Vale area in 2016. After a visit last August, Farmers Fresh bought 117 acres near the intersection of Frontier Lane and Lagoon Drive, paying $1 million with a $300,000 down payment.
The company had initially announced plans to start building in January and hoped to be in production by late 2019.
The facility was expected to employ 200 people with benefits and salaries the company announced as “a livable wage, substantially higher than minimum.”
The company at the same time began expanding its Canadian location, a project that is currently behind schedule, according to Truong.
He said the company hasn’t decided what to do with the Vale property. The loss of Farmers Fresh to Vale was confirmed Friday by Greg Smith, director of Malheur County Economic Development.
“I received word last night from Farmers Fresh,” said Smith on Friday. “We did our best, but ultimately I shared with them they need to do what is in their best interests. This is extremely unfortunate for Vale and all of Malheur County.”
Smith, like Truong, said new tariffs recently imposed played a large part in the decision to not come to Vale.
“The current economic climate is not favorable for tariffs,” Smith said. “Along with the currency rates not favorable, Farmers Fresh just could not make it work.”
With the company still owning the land, Smith said, the opportunity may still develop.
“Maybe not today, but maybe in five years is the time they will look here,” said Smith.
Reporter John L. Braese: [email protected], 541-473-3377.
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