Potato Grower

June 2018

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WWW.POTATOGROWER.COM 37 PLUS OR MINUS ONE Moderation and cooperation are keys to success in the fresh potato business. United Potato Growers of America By Buzz Shahan Chief Operating Officer Growers of fresh produce only earn a profit by matching supply to demand through an organized, legally sanctioned effort. Wireless Potato Node™ Identifies exact locations where potato damage takes place along the chain of production, packing and distribution wireless-tester.com • Triaxial accelerometers • Sample rates up to 4096 Hz • Water resistant • Data transmitted up to 2 km (1.2 mile) • Supports multiple potatoes simultaneously • 6 - 9 months battery continuous use • Real-time data as well as log to memory 42395OrkFoo13h.indd 1 4/18/18 9:20 AM Acknowledging as a potato grower that profitability depends more upon tailoring your crop's delivered volume than it does upon any other production factor, how much attention should you give to making sure that your production-volume analytics are exactly right? Let's go back 150 years to Boston's farmer's market: Imagine yourself in late summer 1868 on Boston's outskirts, watching your potato crop approach field maturity, hoping desperately that your potatoes will be the first ones to appear in Boston's farmer's market. If your potatoes ripen in concert with every other farmer's potatoes, you will all arrive in the market at once, glutting it, and price will be the only lever left to get the ladies to buy your potatoes and not your neighbor's. It's only too obvious that that is exactly what happened to your strawberries, to your peaches, to your cabbage, and to everything else that you labored so hard to produce. With your mind reviewing disastrous glut after disastrous glut, logic suggests that there must be a better way. To stop these gluts from ruining their economic lives, farmers began getting together and regulating the amount of produce going into a market. Price stabilized at whatever level the farmers decided. This practice spread to many other consumer products. Unhappy with rising prices, consumers brought heat on politicians, and Congress passed the Sherman Antitrust Act of 1890, prohibiting producer collaboration. The unintended consequence of this crackdown was that the farm economy immediately fell into deep recession. Profits that once energized the nation's largest economic sector—agriculture—had been taken away. With agriculture forming the basis of the national economy, the national economy fell apart as well. Recognizing the harm done to one of agriculture's vital economic aspects, politicians reversed themselves and passed the Clayton Act, whose Section 6 exempts agriculture and labor from antitrust legislation. What's the message here? In today's free-market economy, growers of fresh produce only get a fair return on investment by matching supply to demand through an organized, legally sanctioned effort. To omit producers' intense focus on supply as price's fundamental driver, is to throw price to the wind and wait, instead, for random supply impulses to determine one's financial future. This makes no business sense; it is economic Russian roulette. Today, virtually every successful fresh produce segment recognizes the economic fundamental of supply and focuses on it. An old-timer in the process contract business advised, "Always be one load short or one load long on a process contract—never more nor less, even if the balance goes to the dump." This observation of supply's unmatched value in creating price applies just as well to fresh, non- contracted potatoes as it does to contracted potatoes—or to fresh strawberries, or to lettuce, or to any other produce segment. Something to think about.

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