Potato farmers fight back

Spud industry unites to counter poor returns, oversupply

Bob Krauter
Capital Press

December 07, 2007


SEASIDE - They've been sacked by the low-carb diet craze and plagued with overproduction and poor returns, but some of the nation's potato growers are fighting back through the power of information.

Starting from an organization in Idaho , the nation's big spud producer, the two-year-old, multi-state United Potato Growers Association is sharing production and market information to whip up better profits. At a session at the National Bargaining Conference in Seaside Nov. 27, association leaders and an agricultural economist assessed the value of producer collaboration.

Albert Wada, an Idaho potato grower and shipper, said the association started from the formation of the United Potato Growers of Idaho in 2004. The voluntary organization now covers 12 states, including California , Idaho , Oregon and Washington . Wada said about 80 percent of the potato acres in the U.S. and Canada are now represented in the United Potato Growers Association.

He said the major benefit of the association is communication. Sharing supply management data across a broad growing region has allowed the organization to raise prices by better matching potato supplies with demand.

"We're talking to one another," Wada said. He described the industry's oversupply and poor profitability as "an albatross hanging around our necks for years."

Idaho farms provide nearly 30 percent of the nation's total potato supply. Nationally, yields have increased dramatically, rising from 213 hundredweight per acre in 1971 to 393 cwt. per acre in 2006.

As yields have gone up, people are eating fewer fresh spuds. Per capita consumption has fallen nearly 15 pounds in the past decade as consumption has shifted from fresh to processed forms, according to Shermain Hardesty, an economist at the University of California , Davis .

Two of every three potatoes grown in the U.S. now go into processing channels compared to 19 percent in 1959, Hardesty said. As a result, data show that Idaho potato growers suffered an average loss of $2.67 per cwt. in 2000 when fresh market prices averaged $5.27 per cwt.

Hardesty said information sharing cooperatives like United Potato Growers can help growers and shippers regain some of the marketing power they lost due to consolidation. The Capper Volstead Act provides authority for farmers to cooperative associations to gain countervailing market power without violating antitrust laws, she said.

Albert Wada said the organization's top priority is to create more demand, but he said there is a very sensitive relationship between production and price. A 1 percent change in potato supply can cause a 7 percent change in price, Wada said.

"Without supply management and grower solidarity, we don't have adequate profit margins, Wada added. "Growers tend to think it is a sin to produce a profit. Potato growers are very independent and the one thing that they can do is independently go broke."

A key feature of United Potato Growers' activities is a weekly conference call of members. Buzz Shahan, the association's chief operating officer, described the calls as "market conversation."

"We present ... the market dynamics to them and let them decide," Shahan said. "You give them pure data that is solid and they manage themselves."

Hardesty said the main components of United Potato Growers' program are planting controls, market data reporting and analysis as well as product flow controls. Because it is a voluntary organization rather than a marketing order, there are non-members who benefit.

"All that UPGA can really do is to continue to promote the benefits of membership," she said. "If everybody plays along, is going to benefit everybody," she said.

John Cross, a spokesman for United Potato Growers of the Klamath Basin , said his members joined the association as a chapter in 2005.

"There are growers who don't believe in it, that don't think this is the way we should go and that's their right," Cross said. "But I really think that the value to this is our ability to share information among growers."

Cross estimated that the 53 members of the Klamath organization represent about 85 percent of the fresh market acreage in the Klamath Basin . They pay $10 per acre to be affiliated with United Potato Growers.

"The main thrust of United was not to try to hit a homerun every year, but try and get on base with some singles every year," he said. "If we can take the plummeting lows out of the marketplace and by doing that, you are taking away some of the highs, if every year you can at least return the cost of production or a little bit better, then you're much better off."

Bob Krauter is the California editor based in Sacramento . E-mail: bkrauter@capitalpress.com.

+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
NOTE: In accordance with Title 17 U.S.C. section 107, any copyrighted
material  herein is distributed without profit or payment to those who have
expressed  a  prior interest in receiving this information for non-profit
research and  educational purposes only. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml

Source:  http://www.capitalpress.info/main.asp?SectionID=67&SubSectionID=616&ArticleID=37434&TM=40309.88

Spud industry unites to counter poor returns, oversupply

Bob Krauter
Capital Press

December 07, 2007


SEASIDE - They've been sacked by the low-carb diet craze and plagued with overproduction and poor returns, but some of the nation's potato growers are fighting back through the power of information.

Starting from an organization in Idaho , the nation's big spud producer, the two-year-old, multi-state United Potato Growers Association is sharing production and market information to whip up better profits. At a session at the National Bargaining Conference in Seaside Nov. 27, association leaders and an agricultural economist assessed the value of producer collaboration.

Albert Wada, an Idaho potato grower and shipper, said the association started from the formation of the United Potato Growers of Idaho in 2004. The voluntary organization now covers 12 states, including California , Idaho , Oregon and Washington . Wada said about 80 percent of the potato acres in the U.S. and Canada are now represented in the United Potato Growers Association.

He said the major benefit of the association is communication. Sharing supply management data across a broad growing region has allowed the organization to raise prices by better matching potato supplies with demand.

"We're talking to one another," Wada said. He described the industry's oversupply and poor profitability as "an albatross hanging around our necks for years."

Idaho farms provide nearly 30 percent of the nation's total potato supply. Nationally, yields have increased dramatically, rising from 213 hundredweight per acre in 1971 to 393 cwt. per acre in 2006.

As yields have gone up, people are eating fewer fresh spuds. Per capita consumption has fallen nearly 15 pounds in the past decade as consumption has shifted from fresh to processed forms, according to Shermain Hardesty, an economist at the University of California , Davis .

Two of every three potatoes grown in the U.S. now go into processing channels compared to 19 percent in 1959, Hardesty said. As a result, data show that Idaho potato growers suffered an average loss of $2.67 per cwt. in 2000 when fresh market prices averaged $5.27 per cwt.

Hardesty said information sharing cooperatives like United Potato Growers can help growers and shippers regain some of the marketing power they lost due to consolidation. The Capper Volstead Act provides authority for farmers to cooperative associations to gain countervailing market power without violating antitrust laws, she said.

Albert Wada said the organization's top priority is to create more demand, but he said there is a very sensitive relationship between production and price. A 1 percent change in potato supply can cause a 7 percent change in price, Wada said.

"Without supply management and grower solidarity, we don't have adequate profit margins, Wada added. "Growers tend to think it is a sin to produce a profit. Potato growers are very independent and the one thing that they can do is independently go broke."

A key feature of United Potato Growers' activities is a weekly conference call of members. Buzz Shahan, the association's chief operating officer, described the calls as "market conversation."

"We present ... the market dynamics to them and let them decide," Shahan said. "You give them pure data that is solid and they manage themselves."

Hardesty said the main components of United Potato Growers' program are planting controls, market data reporting and analysis as well as product flow controls. Because it is a voluntary organization rather than a marketing order, there are non-members who benefit.

"All that UPGA can really do is to continue to promote the benefits of membership," she said. "If everybody plays along, is going to benefit everybody," she said.

John Cross, a spokesman for United Potato Growers of the Klamath Basin , said his members joined the association as a chapter in 2005.

"There are growers who don't believe in it, that don't think this is the way we should go and that's their right," Cross said. "But I really think that the value to this is our ability to share information among growers."

Cross estimated that the 53 members of the Klamath organization represent about 85 percent of the fresh market acreage in the Klamath Basin . They pay $10 per acre to be affiliated with United Potato Growers.

"The main thrust of United was not to try to hit a homerun every year, but try and get on base with some singles every year," he said. "If we can take the plummeting lows out of the marketplace and by doing that, you are taking away some of the highs, if every year you can at least return the cost of production or a little bit better, then you're much better off."

Bob Krauter is the California editor based in Sacramento . E-mail: bkrauter@capitalpress.com.

+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
NOTE: In accordance with Title 17 U.S.C. section 107, any copyrighted
material  herein is distributed without profit or payment to those who have
expressed  a  prior interest in receiving this information for non-profit
research and  educational purposes only. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml

Source:  http://www.capitalpress.info/main.asp?SectionID=67&Sub

SectionID=616&ArticleID=37434&TM=40309.88