Potato Grower

WWW.POTATOGROWER.COM 43 THE TROUBLE IS… Something doesn't quite add up in the potato market. Part of the Buddhist's credo says: "If anyone should speak in disparagement of you, you should not be angry, resentful or upset on that account. If you were to be angry or displeased at such disparagement, that would only be a hindrance to you. For if others disparage you, then you must explain what is incorrect as being incorrect, saying: 'That is incorrect, that is false, that is not my way, that is not found being done by me.' " While this article's theme appears disparaging regarding certain potato market aspects, it is not meant to be. Rather, it is meant to inspire introspection by the potato grower that, should these points be addressed from a purely business perspective, could greatly improve the potato grower's financial health. Among the principles that pioneer economist Adam Smith put forward in his famous work, The Wealth of Nations, was that people act in their own self-interest. So, why would a potato grower align his fortune with a sales organization whose self-interest may not only be unsympathetic to his own, but perhaps even antithetical? Here's a question for the potato grower who finds himself in that situation (by the way, this potato grower is the same individual who provides a living for all those who profit from the risk he takes in the field), and it is a question that every potato grower might ask himself: Is my marketing/sales organization compensated the same way I am? If not—if a marketing/sales organization is compensated by volume rather than price—the obvious follow-up question becomes: How would potato markets look if these two vital groups—producers and sales organizations—followed the same business model rather than one depending upon price and the other upon volume? This curiosity won't go away anytime soon, but maybe it should be viewed from this alternate perspective. Could sales organizations' margins vary with that of the person who makes the whole thing possible in the first place? Could growers and sales organizations each be compensated similarly: by the market rather than by the package? How much sense does it make for United Potato Growers of America By Buzz Shahan Chief Operating Officer Max Yield From the Ground Up 1-800-288-8128 • www.tgschmeiser.com Better Soil Prep For a Higher Yield Max Yield From the Ground Up From the Ground Up 30' Till an' Bedder™ Seed Bed Maker Soil preparation equipment from TG Schmeiser is engineered to provide maximum productivity per acre. Versatile implements till, mulch, cultivate and firm the soil for optimum seed germination. C M Y CM MY CY CMY K 2016MaxYield4.6x4.6FINAL.pdf 1 11/24/15 1:59 PM 157791TGSchm13.indd 1 1/3/17 9:26 AM a potato grower to align his fortunes with someone with an opposing business model? Another analysis reveals that about 25 percent (which turns out to be a conservative number in some cases) of potatoes grown in the U.S. sell at the farm level for about 4 cents per pound or less. These are not culls. These are U.S. No. 1 or No. 2 potatoes. The trouble is that it costs about twice that much to produce them. So, how does a grower who only gets half of his growing cost for 25 percent of his production make the deal work? This lost money has to come from someplace, and that place happens to be from grower equity. Rather than asking how such a thing has come about, the better question is, why would this continue year after year? How could it be looked at differently? Final questions: Who is responsible to change these dynamics, and how can that happen? Is my marketing/ sales organization compensated the same way I am?

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