BURLEY, Idaho — A delay in a $100 million expansion project for McCain Foods USA in Burley, Idaho, has area potato growers worried about the status of their contracts to sell produce to the company.
McCain Foods made cuts to its contracts because it wouldn’t be able to process potatoes while upgrading the production line at its plant. Once the upgrade was complete, farmers were told, their contracts would be re-established.
Now some growers are concerned about what the delay in McCain Foods’ expansion plans will mean for them.
“There was a very small (contract) reduction this year because of their (McCain’s) plans,” said Dan Hargraves, executive director of the Southern Idaho Potato Cooperative (SIPCO). SIPCO negotiates between potato processors and growers to determine annual contracts.
Hargraves said he expects the contracts to be restored to area growers once the production line is upgraded.
Cathy Sharifi, communications manager for McCain Foods USA, confirmed the reduction in produce contracts.
“We will have to have less volume in order to complete work on the rebuild,” she said.
That work is different than the expansion, she said. The expansion will add a new production line, while the rebuild already under way will upgrade technology in Plant 2’s existing production line.
“We’re already in the midst of a rebuild of Plant 2,” she said. “I think there is some confusion about the rebuild effort and the expansion being the same thing.”
Sharifi said the rebuild was underway before the company announced plans to expand its Burley facility.
The company already has spent $47 million toward upgrading technology on the existing line, Sharifi said.
McCain Foods has to reduce the produce it takes in for a short time, and that has meant a small cutback in grower contracts until the rebuild is completed, she said. The rebuild should be done by late January 2015, Sharifi said.
“We’re very excited about the rebuild, and it will end up as an improvement to the current footprint of the Burley plant.”
She also said the upgrade will allow the Burley plant to stay competitive with other companies and will keep it up to date with current technology.
“We don’t have a timeframe for how long the delay will last,” said Sharifi. “We feel confident in our decision to delay the expansion, and we’ll continue to monitor the market trends. We want to be prudent as we move forward with the expansion.”
Source: Twin Falls Times-News