North American Produce Buyers
North American Produce Buyers, a partially family-owned business located in Etobicoke, Canada, has been in the produce industry for over 50 years and has been passed down for three generations. This well-established wholesaler sources fruit from around the world to resell to grocery stores in the Canadian market.
Due to the nature of the produce business, NA Produce Buyers is continuously leveraging FX products like spot transfers for payments to overseas suppliers and forward contracts to navigate the inconsistent produce industry. When Vice President of Finance, Steven Moffat started at NA Produce Buyers over 22 years ago they were using their bank for all of their foreign exchange needs. “The day we needed something we would go to the bank and they would give us whatever the exchange rate was that day, there was no tactical approach to FX,” Moffat said.
After years of using their banks for day-of FX rates, Moffat began looking into alternative FX partners, “I knew someone who used OFX and had a really good experience so they referred me.” As they say, the rest is history. NA Produce Buyers started working with OFX in 2011 and have continued to build up their business, customer base, and FX strategy alongside the support of their OFX specialist, Jeff.
We were at the mercy of whatever the rate was that day.
Steven Moffat, Vice President of Finance
North American Produce Buyers
Connecting with an FX partner.
After NA Produce Buyers began working with OFX, Moffat and his team quickly learned the value that OFX brings to their business and their ongoing foreign exchange needs, “I like to be able to communicate with someone and have a real relationship with business partners, Jeff knows me and knows how I like to do business so our relationship is symbiotic. It’s never a sales pitch, it’s gathering information and sharing solutions,” Moffat said.
FX specialist, Jeff quickly began learning about the produce industry and all the places that NA Produce Buyers sourced their fruit from as well as how unpredictable the produce industry can be at times. Depending on weather and natural disasters sometimes sourcing produce can be difficult and unexpectedly expensive. As time went on, Jeff ingrained himself in the business and became accustomed to the produce industry. This allowed him to provide FX support and help Moffat’s team find the right FX solutions and products to balance the cost of currency exchange at NA Produce Buyers. “We would have these rap sessions and plan ahead. He knows my business’s busy seasons and he prepares for that, we talk about rates and always have open communication,” Moffat said.
OFX became a part of the team at North American Produce Buyers, letting Moffat know when a Federal Reserve announcement was coming out or a recent Bank of Canada decision that could impact rates. OFX became an asset for the financial team at NA Produce Buyers, “I can buy dollars anywhere and one competitor or another will always say they can beat the rate, but anyone can beat a rate. What makes our OFXpert different is the relationship and the easy process,” Moffat said. With this in mind, Moffat and OFX began developing an FX hedging strategy to ensure that NA Produce Buyers was getting the most out of their foreign exchange.
Forward contracts gave us the ability to plan and know exactly what our costs would be. It’s not just about the rate, it’s about having a strategy.
Steven Moffat
Vice President of Finance
North American Produce Buyers
Developing an FX and hedging strategy.
After learning more about the pain points of currency exchange for NA Produce Buyers, Jeff discussed FX hedging and risk management strategy with Moffat, including the following risk management tools:
- Forward Contracts– A Forward Contract is a buy now pay later option for businesses trying to take advantage of a desirable rate today on a future payment. The “fixed rate” of your Forward Contract gives you certainty because it reduces the risk of future currency volatility that could wipe out profits or force you to pay more when the transaction comes due.
- Risk Calculator– Our risk calculator helps you determine the impact shifting market exchange rates could have on an example invoice. This is not a quote, it’s designed to help you understand the impact of currency fluctuations.
- Rate Alerts– OFX’s rate alerts send you custom market rate communications directly to your inbox. Rate alerts help you stay on top of moving markets.
After discussing all of the risk management tools available, Moffat chose to move forward with the solution of a Forward Contract for NA Produce Buyers. “I use forwards, I like the stability and knowing that I’m not getting taken advantage of if the market dips,” Moffat said. Periods of high currency volatility can expose your business to increased costs or decreased revenues, putting a squeeze on your margins. This creates currency confidence because it helps you stay ahead of market moves and allows businesses like NA Produce Buyers to plan their finances more accurately for future needs.
Forward Contracts can be anywhere in length between 2 days to 12 months. Short versus long-term Forward Contracts all depend on the business and the need. Long-term contracts are often used by businesses looking to hedge against “longer-term risks” such as an import/export trade enterprise that needs to buy merchandise for future seasons. While there are both long and short-term Forward Contracts, North American Produce Buyers use short-term forwards, “…in produce, we’re not holding on to inventory for a long time or it will go bad, so we don’t need any long-term forwards,” Moffat said. OFX works with a business to understand the business’s needs, payment frequency, and associated risks to create an informed risk management solution unique to the needs of each business and product.
The hedging products and strategies that Jeff brought to Moffat helped the company budget and prepare for future FX costs. “Jeff knows my business’s busy season and he prepares for that,” Moffat said. Having OFX helped Moffat and NA Produce Buyers to plan for future payments, lock in exchange rates, and stay ahead of the volatile market. Whether it’s hedging strategies, spot transactions, or market updates, OFX is always just one call away.
OFX helped us take a more proactive approach instead of reacting to the market.
Steven Moffat
Vice President of Finance
North American Produce Buyers
Whether your business is looking for risk management support for your FX needs, or simply want to execute spot transfers using an online app, our FX specialists are ready and willing to partner with you on your next transfer. Interested in learning how OFX’s platform could support your business? Book a demo today.
Work with OFX to create currency confidence in your businesses.