Columbia Basin potato contracts in jeopardy

Kristi Pihl, Tri-City HeraldFebruary 22, 2014 

Columbia Basin potato growers aren't likely to have contracts for this year's crop before they start to plant.

Representatives from the Potato Marketing Association of North America have expressed concern about changes processors have suggested to the annual contracts.

Those contracts are important because the bulk of Washington's potato crop -- about 80 percent -- heads to processing, where potatoes are made into french fries and other frozen potato products. About 10 percent is for the fresh market, and the rest becomes chips.

Dale Lathim, executive director for the Potato Growers of Washington and the United Fresh Potato Growers of Washington & Oregon, is negotiating with individual processors on behalf of Washington and Oregon potato growers.

Processors are each suggesting a different system this year that would no longer adjust prices based on the cost of inputs such as fertilizer and chemicals, Lathim said. Those changes would bring prices down.

But growers contend that contracts were already at a sustainable price level because of the model used the past six years, Lathim said. There isn't much that can be taken out without growers having to sacrifice some quality.

ConAgra Foods Lamb Weston, one of the biggest area processors, declined to comment specifically on the negotiations.

"We look forward to additional conversations as we work with them to negotiate fair contract values for the upcoming year, keeping our industry strong and viable," said Shelby Stoolman, the company's communication manager.

Lamb Weston has seven plants in the Columbia Basin that process about 11 billion potatoes from the region's fields each year. That's enough to fill 350 football fields 6 feet deep.

The company is proud of its significant presence in the Columbia Basin and of relationships the company has built with local growers, Stoolman said.

Other processors Lathim is negotiating with include JR Simplot Co., H.J. Heinz Co. and McCain Foods.

Potatoes are sensitive and costly to produce -- close to $5,000 an acre, he said. The Columbia Basin's 80 or so potato farmers intensely manage their crop with fertilizer and pest and disease control. Other costs include renting land, equipment, seed and irrigation systems.

For some areas, suggested changes would bring the price of potatoes down below the cost of production, Lathim said.

Farmers have already bought their seed for the year and will be planting in the next few weeks, Lathim said.

-- To submit business news, go to bit.ly/bizformtch.

-- Kristi Pihl: 582-1512; kpihl@tricityherald.com

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