Potato Grower

WWW.POTATOGROWER.COM 35 WWW.POTATOGROWER.COM 35 WE MUST HANG TOGETHER No fresh potato grower is an island. When America's Continental Congress met in 1776, a solemn mood permeated the atmosphere. Why? Because they were about to decide not only the fate of the people they represented, but their own as well. Just before signaling open rebellion against Great Britain by signing the Declaration of Independence, founding father Benjamin Franklin famously warned fellow founders: "We must, indeed, all hang together, or most assuredly we shall all hang separately." No matter how independently a single signer of the Declaration of Independence viewed his particular status, his involvement as a rebel signer inextricably wove his personal fate into that of every other rebel. Potato growers, especially fresh potato growers, are also rebels of a sort: Rather than shielding beneath government-supported crops, these rebels take on open-market risk inherent in fresh potato production. And with that risk, no matter how independently a particular potato grower may view his operation, his production unavoidably combines with all other production to form the potato market's supply side—and supply is what determines price. Yes, demand is a factor, but one over which the grower has little or no direct influence. As a credit to their wisdom, America's rebels did stick together and by so doing triumphed. Slicing the risk pie, however one chooses to do it, the overwhelming fact remains that the rewards of sticking together in the produce business far exceed those of going it alone. Certainly, aggressive asset amortization that spreads capital investment over a maximum number of units has appeal, but, in actuality, this is antithetical to balancing supply with demand. Approaching the potato market through that lens—and excellent analytics exist on the topic—in the very best example, such an approach produces a maximum $0.35 per hundredweight cost- of-production advantage with no regard at all for supply balance. Conversely, a focus on the supply/demand equation readily and easily produces whole dollars per hundredweight. This is not just a fresh potato example; process-grower margins have halved over the past five seasons, for one reason: overproduction due to little, if any, regard for supply. Processors today United Potato Growers of America By Buzz Shahan Chief Operating Offi cer Are potato growers any less interested in their families and their fortunes than were the founding fathers? PH: 218-346-3357 • Toll Free: 888-884-8070 47418 US Hwy 10 Perham, MN 56573 • w w w . b t u v e n t . c o m 165656BTUVen13s.indd 1 1/23/17 3:10 PM enjoy more supply options than ever before. Why should they pay more when so many producers are willing to do the job for less? America's rebel founders stuck together for mutual benefit, and did so in spite of significantly different world views. They did so because they stood an obviously better chance of surviving—not to mention prospering—by combining forces to manage the outcome. Because the ultimate prize of freedom so overwhelmed their petty differences, acting as a single body the founders established a form of government they felt would yield the best results for themselves, their families and their fortunes. Are potato growers any different? Are potato growers any less interested in their families and their fortunes? Where political philosophy forms the basis for government, business philosophy forms the basis for managing a farm. In potato farming, making nickels and dimes by maximizing amortization schedules as opposed to profiting whole dollars by attending to production levels—supply— leaves one questioning why anyone would concentrate on the former at the expense of the latter. Local and national grower organizations know the magic formula. Is disregarding this fact the best course of action a grower can take to advance his family's future? disregarding this fact the best course of action a grower can

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