Mission Produce, Inc. (AVO) Q4 2021 Earnings Call Transcript

Mission Produce, Inc. (AVO 0.99%)
Q4 2021 Earnings Call
Dec 22, 2021, 5:00 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good afternoon, and welcome to the Mission Produce fiscal fourth quarter 2021 conference call. [Operator instructions]. Please also note, today's event is being recorded. At this time, I'd like to turn the conference over to Jeff Sonnek, investor relations at ICR.

Sir, please go ahead.

Jeff Sonnek -- Investor Relations

Thank you, and good afternoon. Today's presentation will be hosted by Steve Barnard, chief executive officer; and Bryan Giles, chief financial officer. The comments during today's call and the accompanying presentation contain forward-looking statements in the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts are considered forward-looking statements.

These statements are based on management's current expectations and beliefs as well as a number of assumptions concerning future events. Such forward-looking statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from the results discussed in the forward-looking statements. Some of these risks and uncertainties are identified and discussed in the company's filings with the SEC. We'll also refer to certain non-GAAP financial measures today.

Please refer to the tables included in the earnings release, which can be found on our investor relations website investors.missionproduce.com, for reconciliations of non-GAAP financial measures to their most directly comparable GAAP measures. With that, I'd now like to turn the call over to Steve Barnard, CEO.

Steve Barnard -- Chief Executive Officer

Thank you for joining us for our fiscal 2021 fourth quarter earnings call. Our business remains in a position despite some obstacles in the fiscal fourth quarter, and our global presence continues to expand. In the fiscal fourth quarter, the industry faced supply challenges brought about by the delayed start of the new Mexican harvest, combined with the trailing effects of a smaller California crop, which was only partially offset by the increased supply from Peru. This combination resulted in lower-than-expected market volumes, which put temporary pressure on our per-box margins and then turn our adjusted EBITDA results.

The widespread port delays and the congestion has been a global challenge, permission at nearly doubled some of our normal shipping times, especially those from our own farms. The long delays with late-season fruit stretched the age of inventories adversely, pressing on our anticipated earnings for the Peruvian season. However, despite these headwinds, I'm pleased with our ability to drive fruit volume amid a set of complex market variables. Our model is focused squarely around generating source volume and marketing and distributing that volume to retail and foodservice customers globally.

Our unique combination of utilizing third-party growers and leveraging our own farms in Peru for diversified source volume is particularly valuable in environments such as this. Our owned production in Peru performed in line with our expectations and produced record volumes in fiscal 2021 of 101 million pounds, representing a 38% increase to service our global customer base. We think that this really demonstrates the quality of our farming operations and the focus that our team has on executing such a large-scale international ratio. This also continues to be a highly valued benefit to our customer base.

From their perspective, buying directly from the source guarantees supply creates more efficiencies, and provides higher quality. In my view, this is an exceptional long-term competitive advantage that is not easily replicated, particularly when paired with our global network of brightening and distribution assets. Expanding on our network is a key element in our design to expand our industry leadership position and our new Laredo, Texas mega facility is a key piece of our strategy. During the fiscal fourth quarter, we are already seeing the benefits of our strategy as the Mexican production season starts to take hold.

As I've said before, the Laredo facility is a game changer for us. It provides us 16% more ripening capacity and 14% increase full storage capacity. We are especially excited about the upcoming seasonal ramp-up around the Super Bowl, where our distribution network has historically been stressed. The facility will allow us to alleviate seasonal pressure on our other North American facilities, effectively rebalancing our network while adding new capabilities and capacity.

To put this in perspective, in the two weeks leading up to the event, we anticipate that the volume moving through our North American network will increase by 50% as compared to pre-Super Bowl period. This increase leads the industry and only Mission Produce as the capability to handle such a load. During fiscal fourth quarter, we also solidified our European operations with the opening of an additional office which builds upon our existing distribution and ripening facility in the Netherlands. We brought on a team of seasoned professionals with a high avocado IQ that will help us drive improved service to the region and expands our capabilities to create a direct link back to our source markets, which will bring more consistency of the category, improve quality for customers, consumers, and help drive consumption rates in this exciting growth market.

Through our continued focus on long term and reinvesting in our business, we are ensuring that our customers have the product they need, which is paramount for us to continue dominating as the industry leader. While our long-term strategy to support growing global per capita consumption trend is intact, the recent environment has been rather fluid given pandemic-related variables that have shifted consumer shopping patterns. In fact, some of the retail metrics that we track demonstrate that the environment that we faced in this year's fiscal fourth quarter looks very similar to two years ago in the fourth quarter of fiscal 2019. We are seeing this household penetration, purchase frequency, units purchased per trip, and so on, all mirror the pre-COVID environment of 2019.

Nonetheless, the secular trend supporting industry and our business continue to be decidedly favorable. The demographics are advantageous and our ability to help retailers and foodservice customers capture demand for avocados will be a key element of driving consumption trends in growth markets such as Europe and Asia that are fractions of what we experienced here in North America today. Investing in our own production to ensure year-round global sourcing is the key to maintaining long-term organic growth, and we aim to expand upon our lead by building upon our strategy. In summary, our business remains resilient despite Mexico's challenging supply dynamic and the variability in consumer shopping patterns due to the ever-changing COVID conditions.

Our owned production in Peru continues to perform in line with our expectations and produced record volumes in fiscal 2021 to service our global customer base. We continue to stay focused on our long-term strategy of generating consistent growth and enhancing market share by increasing capabilities and capacities while continuing to mitigate and adapt to industry forces. We're excited about what's ahead, and we believe we have an undisputed advantage with our global network of value-added assets that will drive sustainable long-term shareholder value. With that, I'll pass the call over to our CFO, Bryan Giles, for his financial commentary.

Bryan Giles -- Chief Financial Officer

Thank you, Steve, and good afternoon to everyone on the call. I'll start with a brief review of our fiscal fourth quarter 2021 performance ended October 31st, 2021, and touch on some of the drivers within our two operating segments. Then I'll provide a snapshot of our strong financial position and conclude with some thoughts around our outlook for the quarter. Total fourth quarter revenue increased 15% to $237 million from $206.8 million in the prior-year period.

The increase in revenue was driven primarily by a 21% increase in average per unit avocado sales price partially offset by a 5% decrease in volume. I'll touch on the price volume dynamics in a moment but would like to reiterate that our business is managed to volume targets as we leverage our global presence to drive share of fresh avocados to our retail and foodservice customers. While prices fluctuate given the influences of global supply and demand, pricing is not something Mission can control or forecast with any degree of certainty. In the fourth quarter, industry supply was negatively impacted by the delayed start of the new Mexican harvest combined with the trailing effects from the smaller California crop, partially offset by increased supply from Peru.

The industry continued to experience volatility due to timing and size curves of harvested fruit, which was abnormal and influenced pricing. As we've noted previously, our leadership position as a global value-added marketer and distributor of fresh avocados helps insulate our gross profit as these sought-after value-added services such as ripening, bagging, and distribution are largely unaffected by price changes. However, supply volatility can be problematic as we balance the inventory we are buying in the spot market against global customer commitments. As a result, we realized some compression in our per-unit margins, recognizing that we were up against a difficult comparison in the prior-year period.

Fourth quarter gross profit decreased 14% compared to the same period last year. Beyond the impact of lower per box margins, gross profit was also pressured by the lower Mexican volumes, which affected utilization rates and was further impacted by incremental infrastructure costs within our marketing and distribution segment related to our new Laredo facility. While we estimate this impact was approximately 50 basis points for the fiscal fourth quarter, we do expect this impact to decrease as volumes and utilization rates increased during seasonal peaks, such as our first quarter. The negative impacts were partially offset by higher volume of avocados sold from our company-owned farms within our international farming segment compared to prior year.

These sales generate higher gross margin than the sales from third-party growers due to our lower per-unit cost basis. SG&A for the fourth quarter decreased $1.3 million to $15.5 million due primarily to noncomparable share-based compensation associated with the company's IPO that was recognized in the prior-year period. Excluding this anomaly, the company continues to realize higher professional fees, labor costs, and liability insurance premiums associated with being a public company. Cost growth was further impacted by the change in our SEC filer status from an emerging growth company to a large accelerated filer as of October 31st, 2021.

Net income for the fourth quarter of 2021 was $16.9 million or $0.24 per diluted share, compared to $18.8 million or $0.29 per diluted share for the same period last year. The impact of lower gross margin was partially offset by higher equity method income from our blueberry investment in Peru and higher other income related to favorable foreign currency movement in the current year period. Adjusted net income was $17 million or $0.24 per diluted share for the fourth quarter of 2021, compared to $21.9 million or $0.34 per diluted share for the same period last year. Adjusted EBITDA was $26.4 million for the fourth quarter of fiscal 2021, compared to $32.1 million for the same period last year, driven primarily by the lower volumes and per unit margins within our marketing & distribution segment and higher SG&A costs, exclusive of share-based compensation, partially offset by strong growth of owned production volume as compared to the prior-year period.

In terms of our segment drivers, our marketing and distribution segment net sales increased 14% to $230.4 million for the quarter. The drivers for the marketing and distribution segment are similar to those that I described for the consolidated results. Segment adjusted EBITDA decreased 57% to $8.4 million, driven primarily by the lower volume and per unit margins and higher SG&A costs net of the noncomparable share-based compensation associated with the company's IPO compared to the prior-year period. Our international farming segment primarily represents our owned farms that we manage in Peru.

Naturally, the dynamics of this business are quite different from those in our marketing and distribution segment. While we are more exposed to price in this segment compared to marketing and distribution, this is a highly strategic initiative for mission and its value to our enterprise, we're very apparent in the fourth quarter as we work to mitigate the impacts of the Mexican volatility and a smaller California crop. Our growing base of global customers requires year-round supply and today's key growing regions can't keep up with international demand. As a result, we made a commitment close to a decade ago to establish a presence where we control our own supply that we're able to sell to customers through our marketing and distribution segment operations.

As we look forward, in the short run, growth within our international farming segment will be dictated by yield improvement within our maturing orchards. We expect longer-term growth to be supported by additional producing acreage that will come online and subsequently mature. As a reminder, the avocado harvest season for our Peruvian farms typically runs from April through August of each year. And as a result, you see the International Farming segment emerge in the third and fourth quarters and contribute adjusted EBITDA in a significant fashion.

For the fourth quarter, international farming segment sales increased 38% to $30.4 million. Segment sales growth was driven by higher fruit volumes resulting from improved harvest yields at our maturing orchards. And I'll reiterate a point Steve shared in his remarks. Despite all the industry volatility this quarter, we managed our own production extremely well and produced the forecasted volumes, which were a record 101 million pounds.

This is a great accomplishment by our team and clearly demonstrates the strategic advantage of our unique platform. Segment adjusted EBITDA improved by $5.3 million to $18 million primarily due to the revenue drivers noted above, partially offset by higher costs associated with strategic initiatives in farming maintenance and operations that were intended to drive yield enhancements. Additionally, due to widespread port delays, which in some cases, nearly doubled the normal shipping time, we experienced some quality issues related to the extended age of inventory on late-season fruit, which negatively impacted our sales returns. This was a significant factor in our performance relative to the guidance we provided for the fiscal fourth quarter.

Shifting to our financial position. Cash and cash equivalents were $84.5 million as of October 31st, 2021, compared to $124 million as of October 31st, 2020. Net cash provided by operating activities was $47 million for fiscal year 2021, compared to $78.9 million in fiscal year 2020. The $31.9 million change was primarily driven by unfavorable net change in working capital.

Within working capital, the unfavorable changes in accounts receivable and inventory were partially offset by favorable changes in grower payables. Accounts receivable increases were due to rising pre-unit sales prices experienced during the year. Changes in inventory were driven by a combination of higher farm-related inventory in Peru as well as higher per-unit cost of Mexican food on hand compared to prior year. The increases in farm-related inventory were due primarily to growth in productive acreage and higher on-hand quantities of fruit at the end of the year due to the extension of the harvest season, combined with port delays.

Favorable changes in grower payables were correlated with the pricing increases experienced with Mexican inventory. Capital expenditures were $73.4 million for the 12 months ended October 31st, 2021, compared to $67.3 million for the same period last year. Capital expenditures for fiscal 2021 have been concentrated in land improvements in orchard development in our Peru and Guatemala farming operations and on completing construction of our new distribution facility in Laredo, Texas. In terms of our near-term outlook, similar to our prior practice, we are providing some context on our expectations for industry conditions to help inform your modeling assumptions, but are not providing formal guidance due to the fluidity of the market at this point in the year as we shift back toward our marketing and distribution segment.

The industry is expecting volumes to be flat to slightly down in the first quarter versus the prior-year period, primarily due to supply constraints associated with the Mexican harvest. This challenging supply situation further reinforces the investments that we're making to diversify our sourcing base on a year-round basis. At this point, expectations are for pricing to be relatively steady on a sequential basis, which would imply a year-over-year increase of approximately 40%, compared to the $1.04 per pound average we experienced in the first quarter of the prior year. As we look at our business and the environment we are operating within, clearly, inflation is an issue.

And while our model is less exposed than others, we are nonetheless facing challenges and driving mitigating actions. In regards to the near-term environment, we are working to maintain per box margins at a similar rate to the prior-year period but volume pressure, coupled with higher structural public company costs, creates a headwind to adjusted EBITDA in the fiscal first quarter. That concludes our prepared remarks. Operator, now over to you.

Please open the call to Q&A.

Questions & Answers:

Operator

Thank you [Operator instructions] Our first question is from Ben Bienvenu of Stephens. Please proceed with your question.

Ben Bienvenu -- Stephens Inc. -- Analyst

Yeah. Good evening, guys. Bryan, I may just pick up where you left off there. On the -- you're seeking to maintain margins in the first quarter on a per box basis or per pound basis, consistent with last year, but experiencing some headwinds associated with inflation and higher costs, you did around $0.14 a pound last year.

Should we interpret what you say to mean that you might strive to sustain that profit per pound but there might be incremental cost pressure on the SG&A line? Or should we see that manifest in the per pound gross profit as well?

Bryan Giles -- Chief Financial Officer

Sure, Ben. I think that we're still relatively -- we're at the midpoint of our quarter at this point but a significant amount of our volume does come through during the month of January as we lead up to the Super Bowl. So we can see the conditions that exist today, but it could certainly move significantly between now and January 31st. I think we've kind of mentioned in the past that we do have target ranges for margin on our marketing and distribution segment and that $0.14 a pound range is certainly kind of in that number.

We performed below that during our fourth quarter, but we did see improvement as we move to the back end of the quarter from what we saw in the early part of Q4. So our hope at this point is that we can maintain per unit or per pound margins that are consistent or comparable with those figures that we saw in Q1 last year. But again, there's still a good part of the quarter left, so I think we're hesitant to give any firm guidance on where we think that it will end out.

Ben Bienvenu -- Stephens Inc. -- Analyst

Yeah. OK. That's understandable and fair enough. If we shift gears to Laredo, I think I heard you say in your prepared remarks that it represented about a 50 basis point headwind to margins in the quarter, correct me if I'm wrong.

As you think about the cadence of improvement there as we move through the next several quarters, it sounds like it will be particularly beneficial as you get into the peak season period. Can you talk about how on the whole for the year you expect it to be either net positive, neutral, or negative? And then as we move further beyond that, what your expectations are for contribution to margin improvement?

Bryan Giles -- Chief Financial Officer

Sure. Certainly, Q1 and Q2 tend to be our peak times of the year for Mexican volume coming through the system. And that is really what Laredo facility is designed to support. So we do expect improvement as that volume increases during the first two quarters of the year.

As we move during to the back half of the year and the sourcing of fruit tends to be concentrated in Peru or from Peru in California, the volumes that run through that facility do decline. I think really, the performance of that facility and the absorption of cost is heavily dependent on the amount of volume that we're moving through that facility. We introduced a significant amount of capacity on day one when that facility opened. But volume doesn't necessarily grow in that same type of step function.

I think we've made an investment that for the long term, is really going to benefit us, and I think puts us in a prime position in our industry. But in the near term, it's just the growing pains of driving that volume to fill up that facility. I do believe will look during the off times of the year for -- to do some other third-party logistical work through that facility to absorb overhead costs. I think we'll gain traction on that as we move through this fiscal year as opposed to kind of when we were in the start-up time frame in Q3 and Q4 of fiscal '21.

So I do think things will be better as we move through Q1 and Q2. And I think Q3 and Q4 of next year will look better than Q3 and Q4 of 2021 from the perspective of how Laredo's infrastructure costs impact our financial results.

Ben Bienvenu -- Stephens Inc. -- Analyst

OK. And one more quick one for me, if I could. We heard the announcement a couple of weeks ago around the opening of trade between Jalisco in the U.S. for bringing avocados into the U.S.

What do you think that means for the industry in terms of incremental volumes with any coming to the U.S.? Or would that be something that's more specifically beneficial to those that have operations in the lease co versus the industry broadly having meaningful implications for the industry?

Steve Barnard -- Chief Executive Officer

Well, we've been -- this is Steve. We've been operating in Jalisco for several couple of decades now. Most of that product has been going to Europe or Asia or Canada and that is not allowed in here until probably next April. I think what it will really mean it'll probably lower the variability of Mexican supply.

I think it'll leaving it out a little bit in that state in Michoacan and Jalisco are a little bit -- they're not -- the seasons don't mirror each other. They peak at different times, which will be a good thing. And I think it'll probably stabilize the pricing down there, I would think, rather than these big spikes and shutdowns and overloads and everything else we experienced. So I think overall, it will be good for the industry.

It will bring some stability to the table.

Ben Bienvenu -- Stephens Inc. -- Analyst

OK. Great. Thanks for the thought.

Operator

Our next question is from Tom Palmer of J.P. Morgan. Please proceed with your question.

Tom Palmer -- J.P. Morgan -- Analyst

Good afternoon and thanks for the question. I wanted to maybe first just focus on the port issues. So first off, I just want to make sure I understand how they're affecting your business. Is this really higher shrink and you have spoiled product? Or the delays are causing you to discount products so we can find a home faster? And to what extent, as we think about the first quarter, does the shift toward Mexico sourcing, reduce your exposure and shifting more to trucking?

Steve Barnard -- Chief Executive Officer

Well, two things happened during the quarter. Mexico's crop was late. The new crop was late compared to history. And then the port delays, we have most of our volume coming out of Peru during that period of time.

And in many cases, this product was delayed two and three weeks. That's a perishable product late in the season. A lot of it didn't make it. And on top of that, we were shorting customers and having to buy product elsewhere to fill those needs and a lot of that stuff is on fixed contracts, too, for the season.

And if you have to go out and buy product to fill those contracts, they're generally at a loss. So it was kind of a double whammy. We had to throw a product away and then we had to supply outside product, in some cases to fill the need for the product that was sitting out there trying to get unloaded. So it was kind of a --

Bryan Giles -- Chief Financial Officer

Yeah, Tom. I kind of can elaborate on that. But certainly, I think it was probably a little bit of both of what you said. I mean we had some fruit that from a quality perspective, because of the delays we weren't able to market.

I mean, it was literally dumped fruit. We had other fruit that we were able to get into markets, but it wasn't the ideal market. I think the concern is as fruit matures and it's later in the harvest season. There's less margin for error in terms of managing that supply chain.

So that extra three weeks makes a much bigger difference late in the season that it would have made an earlier season fruit that's less mature. So as Steve pointed out, we had programs for this fruit to go into, and we weren't able to get it into those programs partially because it was late and partially because we didn't want to take the risk of putting fruit into one of our retail customers that could potentially go bad. So on top of that, we did have some fruit that was good that literally just stretched out of Q4 and got sold through in Q1 of this year. Again, not at the ideal pricing, but there was some profit impact of just slippage of that fruit sale out of the fourth quarter.

Tom Palmer -- J.P. Morgan -- Analyst

Great. Thanks for all that detail. And just on kind of how that sets up for the first quarter then in terms of sourcing more of the same or reduced exposure just given that Mexico?

Bryan Giles -- Chief Financial Officer

It's much reduced exposure from an ocean perspective, the vast majority of the fruit that we market from Mexico is marketed in North America, and it's brought across the border via truck through our facility down in Laredo or through the Texas border for the industry as a whole. So much less reliance on ocean cargo during this time of the year.

Tom Palmer -- J.P. Morgan -- Analyst

OK. And then if I could just ask one more, sorry to keep going on this topic, but I didn't hear much on the cost of shipping. Is this part that is easier for you to pass through to customers, and therefore, it just isn't as much of a factor in the margin? Or is there something to note maybe in the coming year around that side of it?

Steve Barnard -- Chief Executive Officer

Well, all of that freight -- I'm not sure where the cutoff is, is by the season, and that was all precontracted on an annualized basis for several different carriers and several different destinations. So that didn't affect us too much on the ocean freight. Truck freights did once they got here, of course. And then going forward, obviously, with these fuel bills and whatnot we expect some higher rate bills for this coming season, for sure.

Bryan Giles -- Chief Financial Officer

Yeah. I would agree with Steve on that. We didn't really see the impact in our ocean cargo rates this year because we negotiated most of them before we started to see the price escalations. We're starting to do some preliminary negotiations, maybe not so much with Peru yet, but with some of our other countries of origin on ocean freight for the 2022 year.

And we are seeing increases there. I think as we move forward, we sell a product where our customers used to some volatility in the pricing just because of the supply and demand dynamic. Because of that, it has made it a little bit easier for us to move pricing through when we've seen changes in some of the other ancillary support costs. But there's no doubt that as we move into 2022, there will be higher ocean freight costs that we're going to need to manage.

To Steve's point, the trucking rates, we've already been feeling that this year. I think in many cases, rates are 25 to 30% higher than what we saw a year prior. But for the most part, we've been able to do a pretty effective job of pushing that through. But I think it would probably be naive to think that it didn't have some impact on our margin erosion.

Tom Palmer -- J.P. Morgan -- Analyst

Great. Thanks for all the detail guys.

Steve Barnard -- Chief Executive Officer

You're welcome.

Operator

[Operator instructions] Our next question is from Gerry Sweeney of ROTH Capital. Please proceed with your question.

Gerry Sweeney -- ROTH Capital Markets -- Analyst

Good afternoon, Steve and Brian. Thanks for taking my questions. I wanted to ask a question about the variability in Mexico. And I was just curious, is that more a function of harvest and size and quality? Or is that more a function of maybe some picking patterns of fruit and keeping some fruits on the trees longer and managing price? And the second part of that will -- does Jalisco add a little bit of improve that situation a little bit, if you will?

Steve Barnard -- Chief Executive Officer

Let me just answer that last part. The answer is yes. That's -- I think it'll help stabilize going forward on volatility. The new crop was delayed a little bit.

They had a drought down there for months that they normally get a lot of rain. So the size of the fruit was smaller. Prices were good, but with small fruit, they don't get the production, so they tend to wait as any grower would. And it was just delayed and the price was good because the crop was short.

And keep in mind, demand continues to grow between nine and 11% here in the U.S. and Europe. And so you've got a bigger demand and now a somewhat shorter crop, and you have that human nature that -- well if it's $1 today, it might $1.10 tomorrow, so they kind of dragged their feet and it created a gap. We end up paying more for the product and in some cases, we're selling it for because we've got agreements with retail and it's usually temporary, but it hurts what's happening.

Bryan Giles -- Chief Financial Officer

Yeah, Gerry. I think the general sense of what we're hearing from our boots on the ground in Mexico is that there's probably more fruit on the trees this year than there was last year. It's just not sizing up the way it did last year. So it is smaller fruit that's coming off.

So that impacts the overall amount of pounds that we're going to be harvesting. I think it's still -- we're still early enough in the season where -- and with the fragmented grower base we have in Mexico, it's difficult to pinpoint exactly what the crop size is going to look like. But I think in general, we're not looking at a year where because of these drought conditions that existed during the production period, we're looking at a year where maybe it's flat on overall volume flat to slightly down. I think that we'll have a better feel as we move forward, particularly as we move up to the Super Bowl to see how heavy that harvest remains kind of through these next six- to eight-week time frame.

Steve Barnard -- Chief Executive Officer

And it will change because they have three to four different flowers depending on the location and elevation, but we'll outgrow this probably mid-summer mid-to-late summer and probably have more fruit, but we tend to be the opposite of what it was the year before as far as timing because if you have an early heavy crop like we did last year, you have a tendency the year after to have a late early crop or a smaller early crop, and they just kind of -- they're alternate bearing and even it flowers on the same tree, they still be pay the same.

Bryan Giles -- Chief Financial Officer

And again, Gerry, I'd just like to use this opportunity to kind of drive home that. I mean this is part of the reason why we've invested in other countries of origins to have multiple sources to have be vertically integrated. Certainly, countries like Guatemala and Colombia have a harvest season that aligns very closely to Mexico. So beyond just Jalisco opening up, which may be provide -- alleviates volatility in the near term.

I think the longer-term solution is going to be sourcing fruit from these other markets where we're making investments in today and others are as well.

Steve Barnard -- Chief Executive Officer

And we're trying to extend our Peruvian season, which would cover the early part of Mexico. California, they're getting rain finally, but that's pretty limited on their production here even with the rain. So as Bryan said, we want at least two sources of supply, and we're shooting for three in some cases at the same time.

Gerry Sweeney -- ROTH Capital Markets -- Analyst

Got it. And speaking about supply, can you maybe give us a quick update on acreage under production in Peru, maybe from a year ago to this year into next year? And obviously, we had that alternate bearing food side, and we also have mother nature doing our best to make things a little bit challenging in all comparison takes. But just in terms of acreage and how that's developing?

Steve Barnard -- Chief Executive Officer

Yeah. I don't know the industry per se what the exact growth numbers are. I think it has slowed down. We continue to plant just improve a loan between 200 and 250 hectares a year, but not in the same elevations or latitudes and we're trying to spread out the season because we've got the assets there, we've got the team there.

And we just bought a piece of property that's higher in elevation and we anticipate that will be later in harvest later than the entire country because of the -- its cooler up there. So we're trying to spread that out and not hit the peak where everyone else gets it. We want to be on the edges, hit the peak too but not with our whole load, so to speak, we want to spread it out. So we're -- it's limited.

We can't do it very long, but we're going to add maybe six weeks to it to help this particular time of the year, which is the end of the Peruvian season.

Bryan Giles -- Chief Financial Officer

And I've got some of the data at hand, Gerry. I mean we -- for 2021, the amount of acreage that moved into production from an accounting perspective, increased by about 150 hectares. So about a five or 6% increase of our total acreage in Peru. Again, that new fruit that moves in production is still at very low yields relative to a mature arm.

I think from what we saw year over year in terms of yields per hectare, we were running somewhere in the neighborhood of 13,000 kilos per hectare, in 2020. That number came in at about 16,000 kilos per in 2021 as a blended average across all of our farms. I think we still don't think we've reached peak production on our farms yet. We still have new farms that are coming online as well.

So I think we anticipate that production not only -- from our own farms will continue to grow. Albeit, I don't know if it will necessarily be at a 38% growth rate again next year. But I don't think we believe that these farms are at full production yet.

Gerry Sweeney -- ROTH Capital Markets -- Analyst

Got it. Very helpful. I appreciate it. I'll jump back in line.

Thanks.

Operator

Ladies and gentlemen, at this time, I'm showing no further questions. I'd like to end the question-and-answer session and turn the conference call back over to Mr. Barnard for any closing remarks.

Steve Barnard -- Chief Executive Officer

Well, I'd just like to thank everybody for their interest in Mission Produce and we'll continue to move forward and improve our position. Thank you for your time.

Operator

[Operator signoff]

Duration: 43 minutes

Call participants:

Jeff Sonnek -- Investor Relations

Steve Barnard -- Chief Executive Officer

Bryan Giles -- Chief Financial Officer

Ben Bienvenu -- Stephens Inc. -- Analyst

Tom Palmer -- J.P. Morgan -- Analyst

Gerry Sweeney -- ROTH Capital Markets -- Analyst

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