USPB Assessment Increase: A Good Investment

Half cent more to raise industry's marketing potential

Published in the February 2009 Issue Published online: Feb 28, 2009 Cheryl Koompin, USPB International Marketing Committee Co-chair
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I've just finished reading University of Idaho Extension Agricultural Economist Paul E. Patterson's 2008 Cost of Potato Production in Idaho Comparison to 2007. I am somewhat dismayed in learning the extent to which per acre potato production costs have risen.

Depending on where a grower farms, 2008 fertilizer expense increased from 75 percent to 85 percent compared with fertilizer costs in 2007. Machinery costs are also up roughly 25 percent for the same period.

Everyone is experiencing increased fixed and variable operating costs. All of us can expect to pay more to accomplish what we all do so well-produce potatoes. With the value a grower invests in producing a crop of potatoes today, how can we even consider scaling back our marketing and promotion efforts?

As an Executive Committee, this is a question we have long considered. Without an increase, the United States Potato Board will have to cut investment in vital programs in future years. Cut backs in these programs will affect each industry segment and reduce the ROI and demand building results each segment presently enjoys.

Prioritizing which programs, in which industry segments, to curtail would be an insurmountable challenge, likely to leave many, if not all, industry members with less of a return on their investment.

At Koompin Farms in American Falls, Idaho, we are mainly process growers for the frozen and dehy market, but we also grow chip-stock and seed. We look to the USPB to increase demand for any variety in all segments, and we believe the greatest market potential to be in international exports.

Foreign market development helps the entire industry by increasing demand, even for those who do not directly export potatoes.

The USPB obtains about $2 of Foreign Agricultural Services (FAS) funding for foreign market development with each $1 in USPB funding invested in international programs. Compared with other commodity programs, the USPB's FAS allocation has increased every year for the last 10 years.

Research and evaluation of value-added potato products for domestic and international use are other ways to return sustained profitability to the industry.

The USPB also needs to keep a level of funding available for successful educational program activities, as well as funding for contingency/emergency purposes like acrylamide and erroneous nutrition claims about potatoes.

If we, the potato industry and USPB board members, don't approve the half cent assessment increase, then the USPB programs cannot be sustained. At an estimated $2 per acre, it is definitely worth the investment.

Our collective assessment of two-and-a-half cents helped boost potato export sales to another consecutive record over $1 billion last year.

As a USPB board member, and as a co-chairperson serving on the USPB International Marketing Committee, I have had the good fortune of participating in USPB activities in Africa, Asia and across the United States during the last four years. I always return from these activities truly grateful for the opportunity to educate new and potential customers about the high quality of U.S. potatoes and potato products.

Whether my travels have taken me to Senegal for Food Aid activities and presentations about U.S. dehy, or to Japan to show foodservice reps the quality of U.S. frozen potato products, the response is always the same: "Where can we buy these, because these are so much better than any other potato product we have tried?"

These activities follow the growth strategy in the USPB's Long Range Plan of maximizing return on grower investment.

I recall hearing Idaho potato expert and University of Idaho Agriculture Economics Professor Dr. Joe Guenther state, "In free markets people stop doing unprofitable things. When enough people stop, profits return."

The USPB is our catalyst for positive change in the U.S. potato industry. I would also add the USPB not only helps us stop doing unprofitable things, but also helps us be proactive in doing what is profitable. We as potato growers need to invest in the financing of this type of future.