After the announcement of grower contract cutbacks and the furor that followed, Simplot announced to workers last night that it is closing its Heyburn potato processing plant near Burley, ID, in April of 2004.
The announcement was made to workers. They were told that there would be a 70 percent workforce reduction but no layoff timetable was given.
The scale back of production will come over the next two crop seasons with even more drastic contract cutting to come in 2003.
At the same time, it is building a new fry processing plant in Portage le Prairie in Manitoba. That plant is expected to handle a great volume. It will supply eastern areas of the United States and Canada.
Potato Growers of Idaho, upon hearing word of the plant closure, said it is working on a strategy to help growers cope with the changing market.
“We must work with the state, our Congressional delegation and others to be successful,” Keith Frank, communications director of PGI, said.
“The Administration is not going to change its strong dollar policy,” Frank continued.
But he quoted Treasury Secretary Paul O’Niell who said with the trade deficit the strong dollar produces… “We are better off to help the casualties if it produces a better economic outcome for the whole society.”
PGI said it is open to suggestions from growers and the public. Frank said it is clear Simplot made the decision based on the economic realities of the time.
“We must recognize that unless something changes drastically in the coming months, it is possible that Simplot will close at least one more plant in the near future.”
Frank said a worldwide slowdown in demand is partially to blame, but the main cause is clearly the dollar exchange rate that makes processing much more attractive in Canada than in the United States.