To say that interest was high on the effort to form an industry cooperative today at the Shiloh Inn Convention Center in Idaho Falls, ID, is a definite understatement.
Over 450 growers, shippers, and industry representatives from seven states crowded into a convention room to hear industry experts speak about the potato marketing situation--especially from a fresh potato market perspective--and introduce a plan to form a marketing cooperative that will have benefits for the processing, dehy and seed segments as well.
Ron Olsen and Dave Beesley, Rexburg, ID, growers/shippers and founding committee members, speaking at a news conference afterward, said it was a very humble group that met to discuss falling returns and the loss of equity in all segments of the potato industry.
Olsen said it probably took reaching this point to get the interest that was exhibited. Prices have fallen 30 percent in the last 12 weeks, much to the consternation of everyone.
"Pray," is the first thing the committee will do, Olsen said with a smile in answer to a question. But he also said the interim committee will have a follow-up meeting and the marketing advisory committee will also meet.
Articles of Incorporation have been drawn up to form the United Fresh Potato Growers of Idaho Inc. The Articles were signed by the 23 members of the founding committee.
"United," as it will be called, will be a state-wide co-op for all growers with an emphasis on fresh production. It is incorporated as a company and will be operated as a business with a CEO, staff and Board of Directors. It has been organized by a broad cross-section of growers.
Already United represents 140,000 acres of fresh potatoes or 20 percent of the United States total. It also represents 60-65 percent of Idaho production.
Beelsey said an ad hoc group had first met on the possibility of forming such an industry-wide cooperative in September 2003. He said over the last several weeks the founding committee has been meeting almost daily to try to get a plan put together to present.
The duo mentioned other attempts made over the past few years by groups to get a fresh grower cooperative organized. All attempts have failed.
Growers, known for their fierce independence, were obviously stirred by the two- and one-half-hour presentations. The meeting included presentations from Bruce Huffaker, publisher of the North American Potato Market Newsletter; Jim Chapman, statistician, marketing consultant, and columnist for Potato Grower magazine; Dr. Joe Guenthner, marketing specialist from the University of Idaho; Tim O'Connor, president and CEO of the United States Potato Board; Frank Muir, CEO of the Idaho Potato Commission; Jim Knutzon, president and CEO of Farm Fresh Direct LLC of Colorado; Russell Wysocki of the Russet Potato Exchange in Wisconsin; Steve Connors CEO of Basin Gold Cooperative in Washington, and Ed Staunton of Cal-Ore Potato of Tulelake, CA. Blaine Larsen, representing Nebraska, was also on hand.
Also speaking was Randon Wilson, a Salt Lake City-based cooperative attorney. Wilson was behind the successful formation of three large sugarbeet grower cooperatives in 10 states over the last eight years.
Olsen explained that it is not the consolidation in the buying end of the industry with five or six major grocery store chains and maybe four foodservice entities that is putting pressure on prices.
He said it was the industry's own fault for failure to control supplies and conduct orderly marketing. He said all the buyers want is a quality product, delivered in orderly fashion, and a way to plan ahead for the quanity and the price they will have to pay instead of always having to deal with a moving target.
Five committees have been formed, one to seek an executive director to work out of an Idaho Falls office. They want the individual to understand marketing concepts and not necessarily come from the potato industry.
The first FOB consumer pricing recommendation was given during the meeting. The plan is to increase the price from $3.25 to $4.50 in stages over the next three months. Carton price recommendations for 70-count cartons is to move from $7 in increments to $8 in three months.
All growers can join. Process and seed growers were also encouraged to join.
To become members growers must purchase one share of common stock (voting stock) for $100. Grower/members must invest in Preferred Stock at $5 per acre for each acre of fresh potato acreage grown in 2004. Growers may opt out without penalty by Feb. 1, 2005. A check-off of $.02 will be used from the net cwt off potato settlements by the first handler to operate the co-op office.
The co-op has set up eight districts throughout Idaho with an interim board member from each with seven at-large directors.