Spud growers set to vote on contracts
Updated: Thursday, March 28, 2013 10:09 AM
Official says greater increase needed to fight zebra chip
By JOHN O'CONNELL
Idaho potato growers will vote March 4 in Burley on contracts with McCain Foods and J.R. Simplot Co. paying a 1.6 percent average increase, according to sources involved in negotiations.
Lamb Weston growers ratified contracts in early February with the same increase.
Dan Hargraves, who represented growers in negotiations spanning two months as executive director of Southern Idaho Potato Cooperative, anticipates members will approve the contracts. However, he'd hoped for increases averaging 3-7 percent to recoup additional costs associated with fighting zebra chip.
Zebra chip, spread by potato psyllids, first arrived in the Pacific Northwest in the 2011 season and creates bands in spud flesh that darken when fried.
"It seems like our costs really took a backseat to (processors') concerns about overproduction," Hargraves said.
Depending on variety and farm location, grower payments would range from $7 to $8 per hundredweight on field-run potatoes -- gross weight less dirt and foreign material. Most contracts would include some level of increase.
Hargraves explained the Simplot contract seeks to resolve payment inequities between growers who deliver spuds directly from the field and those who offer their own storage. Simplot's Russet Burbank growers with storage would see increases of more than 3 percent.
Lamb Weston and McCain contracts award growers in east Idaho, where zebra chip hasn't surfaced, an extra 8 cents per hundredweight, compared with 15 cents for southcentral and southwest growers.
Hargraves said processing contracts contain rejection language for zebra chip, so growers can't afford to make cuts in their prevention programs.
"If there's a full-blown spray program for zebra chip, this preseason contract thing is going to be pretty lean," Hargraves said.
The new contracts also include tougher penalties for sugar ends -- high sugar accumulations at the ends of potatoes, marring fry color, caused by hot weather.
Hargraves said processors voiced concerns this season about sugar ends and low specific gravity, which is a measure of the solid-matter content of tubers.
Grower Doug Gross, of Wilder, Idaho, said the stricter sugar-end language makes for "a much riskier contract" due to "something we often have little or no control over."
Gross estimates he spent an extra $180 per acre last season to protect long-season varieties from zebra chip, about a 4 percent increase in his production costs. He acknowledged fertilizer costs have declined.
If future contracts don't adequately cover increases in production costs, Gross fears some potato growers will leave the industry.
"I'm disappointed that it probably isn't enough to cover our increased cost of zebra chip control and our increased land rents," Gross said. "Contracts are no longer based on cost of production in a year when open market prices are so low."
Though the new contract offers no increase in profit margin, Paul Behrend, an Aberdeen, Idaho, Simplot grower, believes the increase covers his "bare bones" zebra chip program.
"I view the contract as being fair," Behrend said.
Potato Growers of Washington ratified contracts Jan. 24 with J.R. Simplot and Lamb Weston including a 2.1 percent increase on a weighted basis.