Operator: Good morning, and welcome to the Mission Produce Fiscal First Quarter 2021 Earnings Conference Call. All participants will be in a listen-only mode. After today's presentation, there will be an opportunity to ask questions. 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: Thank you and good afternoon. Today's presentation will be hosted by Steve Barnard, Chief Executive Officer and Bryan Giles, Chief Financial Officer. Mike Browne, Chief Operating Officer, is also participating on the call today and will be available for Q&A. The comments during today's call and the accompanying presentation contain forward-looking statements within 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 at 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: Thank you for joining us for our fiscal '21 first quarter earnings call. We delivered a strong quarter, generating $12.5 million of adjusted EBITDA, which represents growth of 49% compared to the prior year, and met the high end of our expectations. Our solid financial execution comes back to the quality of our operational network. Despite the pandemic-induced disruptions to the industry, that caused shocks to the foodservice and retail channels, Mission was unfazed due to our global network and infrastructure.

In fact, our ability to stay nimble and manage disruptions with minimal effects, proved to be highly beneficial and allowed us to demonstrate our value-added services to customers worldwide. The consistency that we bring is critical in fostering customer relationships, creating growth in new and existing business, while increasing our market share during the first quarter. This is all made possible by our long-term commitment to innovation and investing in infrastructure, which has been the hallmark of Mission since we started the Company 37 years ago. Our latest endeavor is the construction of our Laredo, Texas new distribution center, which is scheduled for completion in the third quarter of fiscal '21. This 262,000 square foot facility is a game changer for Mission.

It will support our distribution of Mexican sourced fruit in the North American markets and will include border crossing, cold storage and value-added capabilities such as ripening and custom packaging. What makes it so powerful is the enhanced flexibility it provides our entire North American network and take significant pressure off of our other distribution centers, during seasonal peaks. We will have the ability to be even more competitive than we are today. Provide unmatched service to our customers and meet their precise needs. All while having the flexibility to absorb shocks to the system, whether that be changes in volume, changes in customer needs or other disruptions.

Supporting our global footprint remains critical for our growth strategy. We are leveraging our global supply chain and distribution capabilities to continue developing international markets. We have a network of complementary assets in Mexico, Peru, and the Netherlands, providing us access to key growth markets such as Europe. We've been working with retailers to grow the category through direct access to high-quality ripe product, through our source and distribution capabilities. And in Asia, we are leveraging more than 35 years presence in Japan and existing Chinese distribution facilities, to service our platform to build our Asian distribution network.

Both of these regions present immense long-term growth opportunities for us with consumption rates that are a fraction of what the US is grown into today. Ultimately, our ability to execute this consistently, comes back to our year round sourcing capabilities, which are extremely unique and a substantial competitive advantage for Mission. Avocados are no longer a seasonal fruit or a luxury, they have become a staple in households around the world. We are bolstering this by providing a consistent year round supply and value-added services to your neighborhood retailer and favorite restaurants. We aim to replicate this trend globally, but to do so, it requires foresight and constant focus on continuously assessing opportunities to optimize our sourcing capabilities with third-party growers, as well as investing in our own farms to ensure that we control the quality and supply, that our customers have come to expect.

We welcome the challenge. Our year-round sourcing strategy is expanded to mangoes as well. While our organization is firmly committed to the avocado industry, which will continue to drive our financial results for decades to come, we find ourselves in a unique position with relationships and assets, that lend themselves to what we think is a very complementary opportunity to our business and customers. For those who know us well, we've been in the mango businesses since 2015, by owning and operating 300 hectares of mangos in Peru. The genesis of this was to leverage our labor workforce.

The wonderful thing about mangos is, they have a harvest cycle opposite to that of avocados. So, we can employ a workforce year round, which is a significant operational advantage for us and also for the communities that can thrive and invest behind a consistent regional employer such as Mission. As the trees began to provide higher yields, we saw an opportunity in 2019 to start marketing mangoes under the Mission label in the United States, through a small window our farms provided. The demand for our customers -- the demand from our customer base became bigger, requesting a year round program, so we decided to capitalize and fully expand to the needs. Further, we see several similarities in mangoes and avocados.

Both require ripening technology that we already possess. A buyer customer tends to be the same for both categories, and consumption trends are on the rise, particularly in Europe. Our presence in the category will continue to grow at a measured pace based on customer demand and the capacity to support year round sourcing. While it won't have any immediate impact on our financial profile, it does provide an additional avenue for a long-term profitable growth we can leverage our strengths, our existing distribution, ripening and transportation network and our exceptional team. It also strengthens our relationship with retailers, as we've become a larger percent of their supply base.

With that, I'll pass the call over to our CFO, Bryan Giles for some commentary around our recent financial results.

Bryan Giles: Thank you, Steve and good afternoon to everyone on the call. I'll start with a brief review of our fiscal first quarter performance that ended January 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.

As Steve mentioned, we had a great fiscal first quarter 2021, which met our plan and reflects the strong global infrastructure we have in place to service our blue-chip customer base. Total revenue was $173.2 million compared to $197.5 million for the same period last year, representing a 12% decrease, which was consistent with our expectations. The decrease in revenue was driven by an 18% decrease in average per-unit sales prices, partially offset by a 7% increase in volume, which reflected a broader trend over the past couple of quarters, that has been driven by strong industry supply from Mexico. I'll touch on the price volume dynamics in a moment, but would like to reiterate that our business has managed the 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, this is not something Mission can control or forecast with any degree of certainty.

That said, our leadership position as a global value added marketer and distributor of fresh avocados, insulates our gross profits, as these sought after value added services such as ripening, storage and distribution, are largely unaffected by price changes. As such, our first quarter 2021 gross profit increased 17% compared to prior year, despite a 12% decrease in total revenue, driving a gross profit margin improvement of 328 basis points to 13% of revenue. In other words, in lower priced environment such as this, where price is inversely related to higher market volume, we are able to maintain growth of our gross profit dollars through our higher volume and when measured as a margin against a lower revenue base, our gross margin percentage expands accordingly. SG&A for the first quarter decreased $0.2 million to $14.6 million due to lower professional fees largely offset by higher employee-related costs and liability insurance premiums now required as a public Company. Net income for the first quarter of 2021 was $2.2 million or $0.03 per diluted share.

This compares with net income of $1.4 million or $0.02 per diluted share for the same period last year. Notably, we experienced two non-operational variances in the first quarter that affected net income. First was the positive impact from equity earnings and unconsolidated subsidiaries of $2.3 million in the current year period, compared to nominal equity earnings in the prior year period. This reflects our proportionate earnings from our investment in Laredo, which experienced strong yields in pricing returns on their blueberry harvest and Henry Avocado, which experienced higher per-unit margins. Second variable influencing first quarter net income is a $5.1 million non-cash charge to deferred tax expense for the revaluation of the Company's deferred tax assets and liabilities, due to changes in future corporate income tax rates in Peru.

Adjusted net income was $7.9 million or $0.11 per diluted share for the first quarter of 2021, compared to adjusted net income of $2.5 million or $0.04 per diluted share for the same period last year. Note that the equity method income that I just highlighted is included in these adjusted figures, while the deferred tax expense charge is not. Adjusted EBITDA increased $4.1 million or 49% to $12.5 million for the first quarter of fiscal 2021, compared to $8.4 million for the same period last year. In terms of our segment drivers; our Marketing and Distribution segment net sales decreased 13% to $169.6 million for the quarter. The drivers for the Marketing and Distribution segment are similar to those that I described for the consolidated results.

With lower average pricing being partially offset by volume growth. This is due to the fact that virtually all of our third-party revenue is generated within this segment. Segment adjusted EBITDA increased 34% to $13.7 million due to a combination of higher volumes and higher per-unit gross margins, that correlates with lower per box packaging costs and favorable leveraging of fixed-cost overhead. Our International Farming segment primarily represents our own farms that we manage in Peru. Naturally, the dynamics of this business are quite different from those in our Marketing and Distribution segment.

Here, we behave as an operator and our ability to scale our operations in an efficient and profitable manner are central to our current and future success. While we are more exposed to price in this segment, compared to our Marketing and Distribution segment, this is a highly strategic initiative for Mission. 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 are 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, while longer term growth will be supported by additional producing acreage that will come online and subsequently mature.

Nominal affiliated sales were realized in the first quarter since the avocado harvest season for our premium farms typically runs from April through August of each year. Adjusted EBITDA for International Farming is generally concentrated in the third and fourth quarters of our fiscal year, in alignment with the harvest season for avocados in Peru. For the first quarter, International Farming segment sales increased 27% to $3.8 million and net sales after intercompany eliminations increased 20% to $3.6 million for the quarter. Sales increases were primarily driven by higher blueberry packing and cold storage service revenues compared to the prior year. Segment adjusted EBITDA improved by $0.6 million to a loss of $1.2 million, primarily due to the higher service volumes noted above, which enable us to better leverage fixed-cost overhead improve during the avocado harvest off-season.

Shifting to our financial position; cash and cash equivalents were $91.1 million as of January 31st, 2021, compared to $124 million as of October 31st, 2020. Total debt was $172 million. Mission's financial model has historically generated strong operating cash flow, which has provided us great flexibility to support our long-term growth objectives with the required infrastructure and sourcing capabilities. Despite significant investments in the business over the past decade, as we built out our global footprint, our net leverage ratio is very healthy. Our operating cash flows are seasonal in nature and can be temporarily influenced by working capital shifts resulting from payment timing for Mexican-sourced volume, which have shorter terms than other source markets.

Additionally, we are building our growing crops inventory for sale in the second half of the fiscal year, that can influence year-over-year changes. These variables can cause quarterly shifts in operating cash flows, but it is not indicative of positive operating cash flow performance that we expect to realize for the full year. Net cash used in operating activities was $9.7 million for the first quarter of fiscal 2021, compared to $12.5 million for the same period last year. The $2.8 million improvement reflected our higher net income and favorable net changes in working capital. Capital expenditures were $22.4 million for the first quarter of fiscal 2021, compared to $8.9 million for the same period last year, and were concentrated in the construction of our new distribution center in Laredo, Texas and for land improvements in orchard development in Peru and Guatemala.

Our Laredo facility will expand our distribution capacity in North America. While our farming investments will provide avocado supply in future years. In terms of our outlook; we are providing an update on some of our second quarter-to-date drivers to inform modeling assumptions, but are not providing formal guidance due to the fluidity of the market at this point of the year. Consolidated volume for the second quarter-to-date period through the end of February is trending up approximately 14% versus prior year. Importantly, as we look forward to the balance of the quarter, we have considerable variance in the prior year periods due to the disruption from the pandemic.

If we assume a normalization of the prior year period volumes, which would exclude those anomalies, we believe a quarterly trend in the positive high single-digit range is prudent. However, given the low prior year actual realized volumes, we may experience actual volume growth for the quarter approaching 20%. Sales prices for the second quarter-to-date period through the end of February is trending down approximately 20% versus prior year. To put this in perspective, I'll share our monthly progression for average pricing during the first quarter, which follows for our Marketing and Distribution segment avocado sales. For November, we realized an average sales price of $1.06 per pound.

For December, it was $1 per pound and for January it was $1.06 per pound. This averaged to a $1.04 per pound for the first quarter. In the second quarter, February pricing was approximately $1.15 per pound which is built off of the lows we realized in December. As we look to the balance of the quarter, the bias is for this momentum to continue, but of course, the market will dictate pricing based on available volume at any point in time. In terms of adjusted EBITDA, we would like to share some insights as to how we are thinking about some of the key variables that will influence our performance for the balance of full year fiscal 2021.

Naturally, this starts with the harvest, which dictates volume. We expect total annual volume growth to track in the high single-digit range based upon current assessments of industry crop sizes. As we shift into the second half of our fiscal year, we start seeing the Peruvian crop come online. The good news is that we are seeing evidence that our Peru crop is expected to show strong growth versus prior year, driven by yield improvement in our existing orchards. As Steve indicated in his remarks, the pricing environment is improving, but still remains well below prior year levels.

While we see some signs that indicate a gradual improvement may extend through the second half of our fiscal year, due to expectations for a smaller late-season Mexican harvest and a smaller California crop, it is too early to make a call on price, so we will stop short of offering a guess and instead provide you with our view of the market dynamics. Regardless of what comes to pass in terms of market pricing, I'd like to re-emphasize that we have better control of our margins within the Marketing and Distribution segment, which we expect to translate to more consistency on the adjusted EBITDA line, than what we may experience on the revenue line, again, due to changes in pricing driven by market forces. We continue to look at this metric through a broader lens with a long-term goal of maximizing per box margins. That isn't always possible given the dynamics of the marketplace, but it is what we strive for year-in and year-out. That concludes our prepared remarks.

Operator, now over to you. Please open the call to Q&A.

Operator: Thank you. At this time, we'll be conducting a question-and-answer session. [Operator Instructions] Your first question comes from the line of Brian Holland with D.A.

Davidson. Please proceed with your question.

Brian Holland: Yes, thanks. Good afternoon and congrats on the strong results. So, curious what you are seeing in California at this point to give you confidence.

I know that the California Avocado Commission recently reduced its forecast for the 2021 crop. I don't -- you know by 8% something like that. I don't know if that jives with what you're hearing or seeing. So, maybe I'll just stop there and just the moving parts here that give you the confidence as we kind of look forward?

Steve Barnard: I'll start and Mike can support this. Yes, the crop is a little bit lower than they originally anticipated due to some heavy high winds we had a month or two ago.

But like in Mission's case, we've got back-up plans in Peru specifically, that has got a much larger crop. So, we're in a pretty good position we feel going forward as far as supply.

Mike Browne: I concur with Steve. The -- the commission came out with adjusted numbers and you probably recall, we had kind of forecasted about 300 million pounds for California prior to some of these weather events, while they were still at 315 million pounds I think, so. Now, those numbers are down well under 300 million pounds.

We have some nice rains out here right now in California, which will help us with the -- with sizing of fruit, but there seems to be a natural window developing for California this year, for harvest.

Brian Holland: Yes. I appreciate the color. And then, one other one for me, I'm reading about in Peru this agrarian promotion law, which was repealed in December. I, you know, I've read comments from the Director of the half avocado producers there where, you know this is going to limit investment in new -- excuse me -- half avocado plantations.

So, I'm just curious if you could maybe provide a little bit of context around what's happening there? If it's impacted you and maybe from a competitive standpoint, if this is a negative or maybe even a positive, to the extent investments being limited around you, just the dynamics there?

Steve Barnard: Yes, I think it's both. I'll let Bryan address the tax side of it, but I think it will slow down future investment from people that aren't there yet. We're in a situation where we're well down the road and invested already and are now starting to harvest that food in big volume. But really that promotion money or that tax program they had, was to create investment, which it did. And I think now they're backing off a little bit and it's creating some social challenges that they weren't able to keep up with -- with the growth.

So, I think it's probably a time for them to catch their breath. I think it's good for us. It's going to limit new investors to the game and in our case, we'll stick to our plan.

Bryan Giles: Yes, I mean, related to the tax rate themselves and they are graduated and build up over time. The big hit that we took, $5.1 million during the first quarter, was related to the revaluation of some very long-term, deferred tax liabilities that we have, and these related to the step acquisition that we did, of our Peruvian operation back in 2018.

And it really relates to revaluation of land and things of that nature. That really will never in line themselves until or unless we actually sold the investment or the property. So truly is, you know probably 90%, $4.5 million of that number is really a book transaction related to liability on that acquisition that we did and the other $0.5 million will unwind over a relatively long period of time, but again it won't have any immediate impact on our results. But again, those tax rates are going to step up over the longer term.

Brian Holland: Appreciate that color.

Best of luck going forward. Thank you.

Operator: Your next question comes from the line of Tom Palmer with J.P. Morgan. Please proceed with your question.

Tom Palmer: Hi guys, thanks for the question. Wanted to ask -- and it was very helpful to get the volume and pricing disclosures for the second quarter, but I wondered if you had detail on how profit per pound in the Distribution business was trending thus far in the second quarter, maybe how it either compares to last year or relative to what we saw here in the first quarter?

Bryan Giles: I think it's very early right now. We have preliminary numbers on our first month and so we have more than half of the quarter that still lies ahead of us. I think it's very difficult to say, where it's going to be at the end of the line. I will say that we kind of saw a bit of a trend throughout the first quarter, where the margins did get a little bit tighter towards the back end of the quarter, than they were on the earlier part.

And I think some of the volatility we're seeing in the market in Mexico today in terms of price increases, it's really challenging for us to kind of get our price increases up with our customers at the same rate, when it moves this quickly. So, there are some challenges that lie ahead of us. I don't think that it's anything that's insurmountable and we'll manage it. But again, as we've mentioned in the past where, there are short term windows where we run into some challenges, with per box margins, we're very focused on the long haul. I think that -- I said, I don't think February was a bad month, it wasn't too far out of line with what we ran in the first quarter, but certainly with March and April ahead of us, what we'd like to see is the Mexico market stabilize, California growers starting to harvest in heavy volumes and then have that bridge us to when we can get to our Peru volumes in Q3.

Tom Palmer: Okay, thanks for the color there. And then, I know we covered this last earnings call, but maybe just get an update on it, in terms of the supply picture and as we look for data points. Maybe just an update on the progression of when sourcing begins, the switch to other regions or Mexico comes off a little bit, just how we should be thinking about that supply picture may be stabilizing and not growing quite as much as it has been.

Steve Barnard: So, Mexico will continue to harvest albeit at lesser rates as we get into the spring and early summer. California I think we'll start to seize this window, as Mexico comes off and it's too early for Peru.

So California will have a very strong spring time harvest into early June and then it's pretty much Peru and -- and a little bit of Mexico local going through June, July, August, maybe even a little bit of early September. And then beyond that, we get right back into the Mexico new crop cycle. But I think there's going to be fruit. We're just right now battling a little bit of the metrics of size and quality and that kind of thing and also here out in the West, you know pricing and now with fuel price has going up a little bit, I think the growers here are getting ready to go.

Tom Palmer: Understood.

Steve Barnard: Well, of course, Peru is going to be a very nice program. But, in terms of filling this -- this current situation we have with Mexico, I think California is going to fill that very nicely.

Tom Palmer: Okay. Thanks guys.

Steve Barnard: Thank you.

Operator: Your next question comes from the line of Ben Bienvenu with Stephens. Please proceed with your question.

Ben Bienvenu: Hi, good afternoon guys.

Bryan Giles: Hi, Ben.

Ben Bienvenu: I want to, ask as it relates to Laredo and the recent storms, any impact that's had on the -- the ramping of that facility? Any damages that remaining full operationally and that's my first question.

And I'll just leave it there for now.

Steve Barnard: Well, thanks for thinking about that. Texas had a rough time there, through the whole state. fortunately, Laredo got through it without any issues whatsoever. We're still on schedule to have our softer open April 22nd.

We've -- we've put in place some management there and we would be ready to go. We did have some issues up in our Dallas facility, and that is going to take a little bit of time to resolve, because of freezing pipes and that kind of thing, but one of the great things about our network is, it can feed off of itself and we can move product around, keep customers satisfied and -- and keep everything moving, but Laredo will be up and going and it will be the lifeboat to help Dallas out, until we get Dallas let's back up and running.

Ben Bienvenu: Okay, great. My second question is, I'd be curious to hear what you're seeing as it relates to foodservice demand. I know we're very early in the recovery.

It's probably fits and starts and varies by geography, but any color that you could offer us would be helpful. And then also along those lines, what foodservice business means for your mix and margin of your -- you know, within your volume as well and how you expect to see that develop as we move through the year?

Steve Barnard: Well, our foodservice business is mostly, I mean I think totally represents about half of our foodservice business, which actually has gone up in volume and consumption, because they had the take out all set up, computers -- computer -- adding stores. To the order on phone and not even get out of your car to pick it up and that their numbers have gone up as our percentage with. So, we haven't seen a big drop in our foodservice category, although some of the customers within that foodservice category, especially we prolapse, which are a wholesale foodservice distributors nationwide network. The business has taken a big hit because there's more of white tablecloth but it's even starting to come back a little bit, their numbers are up, not where they need to be.

But they're starting to move in the right direction and then likely they were not really that exposed in the foodservice category, when it was hit. We had a lot of export business is actually has picked up where the foodservice has dropped off, as retail.

Ben Bienvenu: Okay, thanks. Best of luck.

Operator: Your next question comes from the line of Peter Galbo with Bank of America.

Please proceed with your question.

Peter Galbo: Hi guys, good afternoon. Thank you for taking the question. Bryan, I just wanted to ask on pricing, quarter-to-date, the down 20% I guess, you know, would have encompassed February, some of the public data that we can see, whether it's the data reported out of Mexico with the USDA data was quite a bit worse than that, so I just wanted to understand, maybe even though you guys were down, what was driving kind of you outpacing the decline. And then, also just to make sure I heard it right.

If we think about that minus 20% as maybe a low watermark pending you know recovery in March and April, but it's, for the quarter, it should be something better than that, if things do pick up here.

Bryan Giles: Sure thing. Yes, certainly you know we when we look back, when we look at our performance during the month of February, you know we were seeing a nice trend up from what we saw in the first quarter. Ideally, that will continue as we move through March and April. So, I mean I think the feeling here is that December kind of was that low point.

When we look at it year-over-year, we were experiencing very relatively high pricing during this time last year, kind of leading right into the pandemic-related shutdowns and then it was really post -- probably post April as we started to move into May and through the summer where we saw a gentle decline in prices throughout the balance of the year. So, I think we're seeing -- our customer base is a little bit different than the industry as a whole. We do tend to be a little more retail-focused. We also have a pretty driving export business, roughly 27% of our revenue during the first quarter came from supporting sales outside the US. So, we do have an other parts of our business that we can lean on, to help kind of soften that blow, you know in terms of the lower price on a year-over-year basis and those are some of the things we're doing.

But I think a lot of what we're experiencing, again it's the industry as a whole, you're going to see some differences on a company-by-company basis based upon their customer mix and where they're selling to. But I think the broad trends are consistent.

Mike Browne: And just to add, this is Mike, just add one little nugget on the end of that, is that on these exports that Bryan refers to, it's not just California or Mexico or Peru, we're exporting Mission avocados from Israel, from South Africa, from a lot of we're globally sourcing. So, it's helping to fuel that 27% growth.

Steve Barnard: Colombia, Chile.

Bryan Giles: Yes, there is no doubt. Couldn't support the markets that we do today without the global supply infrastructure that we put in place.

Peter Galbo: Got it, okay. No, that's helpful. Just two other quick ones, the first maybe as a follow-up to Ben's question just on the weather.

Good to hear no impact on the radar. I just, was there any impact to harvest in Mexico from it being colder and then the second question is just on the tax adjustment in the quarter, you know it seemed like something was adjusted out, but also maybe that there is now a step change as a result of -- in the tax rate as a result of Peru, just wanted to make sure, you know should we be incorporating a higher tax rate going forward. Thanks very much guys.

Mike Browne: So, I'll grab the first piece of that, this is Mike. We didn't have any real interference in the harvest, where we have a little bit of interference was just getting trucks across the border and on into -- and into Texas for a couple of days there, because of roads and they don't have a lot of snow plows in Texas.

So, were sand, but it worked through nicely and because we manage a nice inventory, we were able to pull through our system and get through it okay. But, to your question on harvest, there wasn't much of an impact.

Peter Galbo: [Indiscernible].

Bryan Giles: That's right. And I'll step in and talk a little about the tax rate.

What we saw in Peru is that they be the same agrarian tax law that was discussed earlier. Historically we've had a 15% statutory tax rate on our aggregate -- agribusiness based earnings in Peru. They've the repeal of that law and it's replacement leads to a graduated tax rate increases over time. We see that increase from 15% to 20% starting in our calendar year 2023. So, it's still a couple of years out before it's going to impact our current tax expenses, but certainly the revaluation of the deferred with a good chunk of the revalue on the purchase accounting side of it, related to land has driven a deferred tax, but the one-time non-cash related deferred tax entry that we had with us.

So, I think over time, we're going to constantly monitor the tax rates in all the jurisdictions where we do business, Peru, the United States, Peru, Calif -- Peru, Mexico, United States are the two primary areas and our tax rate will evolve over time, as different proportions of our income come from those different locations. We're regularly watching the rate, certainly there is Peru, but we're also keeping a watchful eye on any potential changes in US tax rates going forward as well.

Peter Galbo: Okay, that's helpful. Thanks very much, Bryan.

Operator: Your next question comes from the line of Gerry Sweeney with ROTH Capital.

Please proceed with your question.

Gerry Sweeney: Good afternoon, guys. Thanks for taking my call. Just want to touch on the mangoes quickly, since, we did the avocados pretty hard here. But, my understanding is it's a little bit more of a competitive market, pricing is a little different as well, is just more of a strategic move to leverage your assets? Just how do we look at that and -- and we're keeping in mind that it's not a huge part of the business but just interested from now.

Steve Barnard: Yes, yes. That is part of it, Gerry. But we -- keep in mind mangos are the largest consumed fruit in the world, just not here in the United States. We look at Asia and parts of Europe there -- it's much higher. And we planned our first mangos in Peru to help leverage labor there and that they come off season from the avocados and we'd like to keep the labor force intact.

We will keep them on the ranch, so we don't have to retrain a whole new group next year. So it's beneficial for us and as we got into it, we're learning that our customer base, i.e., the retailers, the big retailere, scrubbers cost those etcetera, are creating a consistent high-quality ripe mango program. So, that was really the decision to put us over the top. It's a win-win on both sides of the fence. And we already have the assets in place, in most cases, the ripening and distribution model.

And depending on how big this gets, we may have to add to it here in spots, but there will be a nice problem, but not only here, but Asia and Europe. I mean the big consumption items in the whole industry in the whole category has been lacking the leader. So, we're going to try to step up and be that leader. It's going to take a little while to get there, because it's -- it's, it's everywhere and but I think if anyone was up for the challenge, I think it's us.

Gerry Sweeney: If the mango industry similar to avocado on that, it's highly fragmented and the growers.

Just curious competition like the growing side as well as, I guess the mark the M and D side as well.

Steve Barnard: I think probably more so very much. So, it's fragmented. It's really whatever Scott oligopoly really a lot of small players. And actually, a lot of regionally you shift from one region to another within 6 to 10-week harvests and you go from one -- one growing reaching to another and I think that's going to be an advantage for us because in a lot of cases, we're already there.

We're not going to have to invent the sourcing side so much. And we were going to have mango experts where we've been doing a lot of work on the ripening, as far as downstream handling, but the -- the sourcing side is going to be quite nice for us and really it's -- the business has matured a lot with the advent of the Mango Board. There is a -- there is a Board that's governed by the USDA and they have been doing on some good work trying to get that industry more mature. So, I think it's ready for a leader. I think the industry is ready for a leader to come in and really legitimize the category and get value added out there very much like Mission did in 25 years ago.

We looked around the United States to find the best guy we could and everyone we talked to, pointed to the same guy. So we hired him and the fact that we planted 300 hectares in Peru is just something to keep the crew busy, ends up being the largest mango farm in the world. So we didn't know that at the time. But --and there is a lot of interest in it.

Gerry Sweeney: Yes.

Perfect, that was very helpful. I just, especially on the details to why how big and you know very similar, a lot of similarities to the avocados. So, especially 2020 is something [indiscernible]. I appreciate it. I'll jump back in line.

Thanks a lot guys.

Operator: And 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 management for any closing remarks.

Steve Barnard: Well, I'd just like to thank everyone for their interest in Mission Produce. I think we have an exciting future ahead and we're looking forward to it.

Thank you for your time today.

Operator: Ladies and gentlemen that concludes today's conference call. We do thank you for attending. You may now disconnect your lines.