Tam Moore
Capital Press Staff Writer
December 23, 2005
MERRILL, Ore. – Part pep rally, part celebration,
United Potato Growers of the Klamath Basin held its first annual meeting here
last week and heard a message to stay the course in an acreage-reduction
program that turned around spud markets in less than a year.
This isn’t your typical agricultural promotion organization. United Potato
this year formed marketing cooperatives, reaching about 70 percent of the
fresh-market acreage in the United States and getting cooperation with some
Canadian fresh-market producers. Spud prices are up, potato acreage is down
and a glut of stored spuds that this past spring threatened another year of
red ink for growers vanished.
Formed in Idaho last spring, United Potato bought surplus spuds off the market
and got its members to pledge 10 percent reduction in fresh-market acreage.
Results were dramatic, said Jerry Wright, the chief executive officer for
United’s Idaho branch and acting CEO for the umbrella United Potato Growers
of America.
“Economic conditions and the good Lord helped United along,” he said to
the Klamath growers. Wright is making the rounds of local associations, urging
them to take another 10 percent acreage cut to further boost spud prices.
Ed Staunton, chairman of the local branch of United Potato Growers of America,
estimated that the doubling of net grower returns, from $4 per hundredweight
last fall to about $8 cwt. in the first two months of this new season, put
nearly $10 million in the pockets of his 52 members.
But for all the success, the turnout of about 30 persons made Klamath leaders
nervous, and they set aside a vote on the 2006 assessment until they can get
greater participation. This year, members paid $5 an acre to the marketing
cooperative.
The Dec. 1 estimates of U.S. potato stocks, released while Wright was in
Oregon, show 253 million cwt. in storage, down 6 percent from last year and
down 5 percent from 2003. About 68 percent of the fall potato production is in
cellars, which probably means handlers will have to allocate the spuds for
release if they want to continue offering fresh potatoes until early harvest
begins in July 2006.
United, in addition to financing the removal of surplus spuds through
assessments on its members, is gathering a database on spud prices that will
allow national co-op directors to suggest marketing strategies to members. The
computers with that data will move to Salt Lake City from Idaho Falls this
winter. United of America’s new CEO, Julia Cissel, will set up what will
probably be an international cooperative, aligned with Canadian spud growers
holding their own talks in Canada.
The national headquarters has a $1.7 million budget for 2006, which will add
about $6 an acre to whatever assessments local co-ops set.
Wright said the potato industry has an ongoing problem: Americans are eating
fewer potatoes with their dinner meals. Consumer research done for the
National Potato Board shows about one-fifth of all home-prepared dinner meals
now include spuds.
While the Potato Board works on promotion, United is concentrating on supply
and on a message to growers that good prices for russet potatoes – far and
away the most popular with consumers – are good for producers of white, red
and specialty spuds and have an impact on contracts for processing potatoes.
To make United work, Wright said, the confidential information from handlers
is critical.
“You’ve got to be not afraid to give information,” he said. United
consolidates acreage, yield, stocks and other data together, then plugs it
into computer economic models.
Klamath handlers got praise from Wright for showing restraint in shipping
spuds this fall. Idaho, on the other hand, apparently broke ranks just before
Thanksgiving, causing a brief oversupply that drove down prices across the
country.
By this week, discipline appeared back in the market with 70-count cartons of
No. 1 russets bringing from $15 to $16.50 at Idaho shipping points, and $13.50
to $15 at Colorado sheds. The smaller Klamath fresh market doesn’t publicly
report prices on a daily basis.
Wright predicted that the Klamath handlers “will be ready.”
to pick up the business next spring when Idaho fresh market shippers run out
of spuds.
“I keep telling my Idaho guys you are giving away your market at the lowest
prices,” Wright said.
Tam Moore is based in Medford, Ore. His e-mail address is tmoore@capitalpress.com.
Source: http://www.capitalpress.info/main.asp?Search=1&ArticleID=21884