SALT LAKE CITY -With national fresh potato consumption continuing to decline and production volume continuing to increase, United Potato Growers of America announced today their 2007 acreage management plan. The plan calls for a nationwide reduction in potato plantings by 15 percent off of individual grower's 2004 base acreage.
"As we strive to build upon our supply management successes of the last two years, 2007 is a critical crop year," said Albert Wada, UPGA board of directors chairman. "Last year we asked for a 10 percent reduction in plantings off of 2004 acres, and, due to increased production yields, alarming drops in fresh consumption, and increased acres by some nonmember growers, the reduction in acreage did not equate to a 10 percent reduction in potato supplies. We urge all growers, members and non-members alike, to control acreage and ensure the viability of the potato industry. It is in every grower's best interest to support this or similar planting management plans."
Explaining the rationale behind the crop plan, Wada noted that last year's European weather-caused crop shortfalls will not likely occur again this year. He believes that processors are likely to contract more of their needs to assure raw supplies, rebuild finished inventories and therefore will buy fewer open potatoes.
Wada said, "Potato growers and landlords have excellent alternative crop choices this year with record or near record high prices for wheat, barley, corn, sugar beets and other crops. It's a rarity in potato growing to have multiple profitable cropping alternatives. It fits in nicely with growers' need to extend rotations on their potato ground."
All UPGA member co-ops have agreed to the 15 percent acreage reduction off of 2004 base acres. UPGA growers reducing acreage less than the 15 percent in storage areas will be assessed a pro-rata fee on all their base acres. Any collected fees will be maintained within the local co-op to buy down local acreage.
Members who expand acres without acquiring additional base will be assessed a higher fee on all acres (expansion plus base acres).
"The goal is to reduce planted acres, not collect fees. We urge non co-op members as well as our members to support this or a similar 2007 acreage management plan," said Buzz Shahan, UPGA chief operating officer.
"The market consistently demonstrates that pro-active supply management dramatically improves earnings for growers. The fact that UPGA grew by 3,213 acres per month in 2006 speaks to the value potato growers give to learning and reacting to data that helps them understand and manage to market dynamics.
"We've had two good years. Let's make it three in a row, a first for our industry. It's within our grasp," Shahan concluded.
UPGA encourages process contract growers to decline contracts below the actual cost of production. Process contract growers are encouraged to work with UPGA and the Potato Marketing Association of North America contract bargaining groups to true-up and understand real costs of production so that accurate margin and analysis can occur.
As part of UPGA's 2007 acreage management plan, the organization is calling for a new, nationwide demand creation strategy. UPGA leaders are working with the U.S. Potato Board and other potato promotion organizations to influence potato consumption, especially table stocks.
Goals include increasing advertising promotions without decreasing price, developing additional funding for promotional activities, leveraging promotional messaging, increasing individual shipper promotional efforts by developing innovative packaging and products, offering new convenience products and improving upon merchandising collaboration with retailers.