Issue link: http://read.uberflip.com/i/1385402
WWW.POTATOGROWER.COM 35 POTATO PRODUCTION BUSINESS MANAGER Potato producers can determine the price they receive. United Potato Growers of America By Buzz Shahan Chief Operating Officer When production has not been fitted to demand, the over-supplied sales manager becomes little more than a loader of trucks and railcars, not a salesman. The measure of any business manager is performance. As good athletic performance produces wins, good business performance produces healthy margins. To measure a business manager's performance in terms of potato production, this framework shows how that is done: Three distinct job descriptions stand out in the potato production business: 1) production manager; 2) marketing and sales manager; and 3) business manager. The production manager (grower) executes field-level operations measurable in three distinct aspects: 1) cost per unit produced; 2) percent of total production reaching the market (pack-out percentage for fresh, incentive targets for frozen process, and viral and bacterial cleanliness/ generation for seed); and 3) profile efficiency (Since potatoes are valued according to size, percent of high-value size within a crop matters). Note the specificity of measuring the production manager's performance. Taking what the production manager hands over — total production of perfect and imperfect potatoes — the marketing and sales manager must then move the crop into the market, securing the highest possible value. It is here where control can be lost. As over 100 years of crop production science aids the production manager, the marketing and sales manager does not always enjoy comparable support. When production (supply) has not been fitted to demand but overdone, the over-supplied sales manager becomes little more than a loader of trucks and railcars, not a salesman. Who is to blame when such imbalance happens? While vegetable-producing entities like those that manage the supply of carrots, lettuce, tomatoes, bananas, avocados, citrus and other crops utilize market data to match supply to demand to stabilize price, such has not happened in all potato-producing regions. For producers in regions not following this vital market strategy, this lapse is terribly expensive — and wholly unnecessary. For example, no potato-producing region ranks with Idaho in brand promotion and recognition; the separate menu-item Idaho baker priced at $5 to $7 each makes the point. But Idaho's potato production business managers can regularly cancel their valued brand by ignoring its supply/ demand balance. Conversely, those potato- producing regions that do quantify their respective supply/demand balances reap great rewards for doing so. Note that this balance is accomplished without stipulating any producer's volume, relying instead upon locally acknowledged historical supply/ demand/price figures and relationships. No potato production factor exceeds balancing production supply with demand in terms of stabilizing price. The responsibility for doing so lies squarely upon the business manager's shoulders. Whether dealing with process volume or with fresh or seed production, if the business manager allows production to exceed a market-dictated price-positive volume — thus undermining the crop's value — the business manager has no one to turn to when things do not work out. The business manager's job is to work with fellow regional business managers to know what profitable production is and to see that it happens. As the beloved Yogi Berra said, "If you don't know where you're going, you might wind up someplace else." With today's potato supply chain management database, no potato production business needs to wind up "someplace else." When it does, it goes there intentionally.