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Contract
modifications intended
to bring parity among
major processors
Online
www.lambweston.com
Spud processors
modify contracts with
growers
Dave Wilkins
Capital Press
Idaho potato growers
have agreed to contract
modifications with major
processors in an effort
to break an impasse with
Lamb Weston, a division
of ConAgra Foods.
Producers voted Tuesday,
March 17, to approve
changes in the 2009
contracts during a
meeting in Burley called
by the Southern Idaho
Potato Cooperative.
Growers declined to
provide specifics about
contract modifications,
saying only that changes
in price and volume
should lead to parity
among the major
processors that buy
Idaho potatoes.
ConAgra, J.R. Simplot
Co., McCain Foods and
Heinz all approved 2009
contracts with Idaho
growers last fall during
collective bargaining
negotiations, according
to growers. The
contracts included a
significant price
increase from 2008.
Three of the companies
went to the field with
the contract and began
signing up growers, but
ConAgra didn't honor its
commitment, co-op
leaders said.
However, ConAgra
contends that it didn't
agree to a deal with
Idaho growers last fall.
A spokesman said
Wednesday, March 18,
that the company is in
the process of writing
contracts and plans to
offer them to some
growers in the next two
to four weeks.
ConAgra has also
reportedly tried to sign
up more joint-venture or
custom producers who are
willing to grow for the
company outside of
collective bargaining
deals, grower
representatives said.
ConAgra's actions have
put other processors at
a competitive
disadvantage, causing
them to press for
contract modifications,
industry officials said.
"Growers will be
offering a compromise
that will provide parity
between processors and
an adjustment in price
that reflects current
economic conditions,"
said Bill Loughmiller, a
grower representative
from Twin Falls County.
The global recession has
weakened demand for
french fries and other
frozen potato products,
according to processors.
Companies have responded
by reducing contract
acreage.
The growers' compromise
proposal will be
presented to fast-food
restaurant chains this
week, Loughmiller said.
"It is hoped that
McDonald's and Burger
King can bring the
warring parties
together," he said.
ConAgra's actions have
left producers in a bind
this year, grower
representatives said.
Producers have made
significant investments
to prepare their ground,
and some have agreed to
pay cash rent of as much
as $800 per acre, but
now don't have a
contract.
Some growers have
discussed the
possibility of filing a
lawsuit against ConAgra
for breach of contract,
but they decided at the
meeting not to take
action as a co-op.
"If any legal action
comes about, it will
have to come from
individuals who were
harmed and not the
organization,"
Loughmiller said.
The Potato Growers of
Washington also voted in
February to give back
some of the 2009
contract price increase
the organization had
negotiated with J.R.
Simplot Co. and Lamb
Weston and expected to
make similar adjustments
to contracts with McCain
Foods.
Staff writer Dave
Wilkins is based in Twin
Falls, Idaho. E-mail:
dwilkins@capitalpress.com.
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