Potato Grower

38 POTATO GROWER | JUNE 2023 A Bird In The Hand Margins can determine one or two birds scenario United Potato Growers of America Buzz Shahan Chief Operating Officer The saying "A bird in the hand is worth two in the bush," implies that a bird in the hand has the same value as two birds in a bush. Not knowing what species they're talking about, it's hard to imagine any two birds in a bush, even 10 birds in a bush, that are that easy to catch. (Perhaps dodos, but dodos are extinct because they were easy to catch.) How- ever, the bird in the hand was caught. The catcher knows where he stands -- he has a bird in the hand, regardless. Imagine a contract-potato grower peering over the fence this year into the yard of a fresh potato grower and seeing a shiny new pickup sitting there. His process contract and the years it has taken to build that relationship is a bird in the hand. The shiny new pickup is two birds in the bush. That is what the history of the two-birds-in-the-bush market teaches. Nourishing the bird-in-the-hand con- tract to the best possible outcome rather than risking the two-birds-in-the-bush market is a sound business decision. Contrarily, adding bird-in-the-hand vol- ume to the two-birds-in-the-bush supply devalues that supply by the added portion. Add enough bird-in-the-hand portions to the two-birds-in-the-bush supply, and margins in each may dis- appear altogether. That is how the law of supply and demand works; balance supply and thrive, exceed supply and falter. History also makes clear that the healthier the two- birds-in-the-bush margin, the easier it is to negotiate the value of the bird-in- the-hand contract. By definition, a zero two-birds-in-the- bush margin means that there is an over- supply in the general market, enabling the bird-in-the-hand contract buyer to negotiate contract price at or near production cost. Is that what producers want to happen? Another thing. Two-birds-in-the-bush guys have figured out how to make that risky situation work by paying attention to supply. In fact, they can tell the bird- in-the-hand fellow how much his added portion will devalue their two-birds-in- the-bush market. Smart fellows, these two-birds-in-the-bush guys. They have become so smart, in fact, that they have stabilized their market with virtually no effect on the consumer. How smart is that? Everyone wins: the producer, the retailer, and the consumer. Here's some math to think about: How many bird-in-the-hand guys be- coming two-birds-in-the-bush guys does it take to destroy the two-birds-in-the- bush market? In the nation's largest two- birds-in-the-bush region, it only takes 20, 400-acre bird-in-the-hand guys to flatten the local two-birds-in-the-bush market. Raise your hand if you want to be one of those guys! If you're a bird-in-the-hand guy, rather than lusting over your two-birds- in-the-bush neighbor's new pickup, break out the iced cola and congratu- late him, not just on his new vehicle but on his mastery of the two-birds-in-the- bush supply, the very supply that made your bird-in-the-hand contract's margin stronger than ever. Be happy knowing that that mar- gin will provide you with all the new pickups you will ever need. Now, when you arrive together at the quick stop, bird-in-the-hand guys and two-birds- in-the-bush guys, with new pickups all around, life will be good, wonderful in fact. PG History also makes clear that the healthier the two- birds-in-the-bush margin, the easier it is to negotiate the value of the bird-in-the-hand contract.

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