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By Dale Lathim
As we put another potato crop in the rearview mirror, it is always a good time to reflect on what we have learned and what we hope to do better in the future. There is no doubt that 2021 is a year we all will remember very well – not for the great things that happened, but for the challenges we faced both in the field and at the bargaining table.
Last spring, we were all surprised at the adversarial approach to negotiations that the processors took. For decades, we could always count on them to recognize grower costs and, at the very least, try to keep the contract price in line with those ups and downs. We rarely agreed on just how much costs were changing, but we always saw it moving in the same direction.
2021 was the first time that both sides saw costs increasing, but a 3 percent price reduction was all but dictated to the growers who were already committed to their potato acreage for the year. While the 3 percent price reduction was unanimously voted down, all growers reluctantly signed the contracts when they were offered because they had no other viable choice based on the sunk costs they already had in the potato crop.
Growers told us loud and clear that they never wanted to be in that position again. They told us loud and clear that they wanted to know what the contract price would be and have an idea of their volume for the next year before they made any commitments to grow potatoes. We heard the growers and made it our main focus to negotiate the 2022 potato contracts in that timeframe.
As we all know, the processors finally came to the table once we reached the Sept. 1 date that growers would start taking advantage of the opportunities that exist this year with other commodities and reduce their available potato acreage for 2022. The price negotiated was one that I believe was very fair for the majority of the volume being contracted.
Cost of production has risen significantly this year and is projected to rise even more in the coming year. The negotiated price for 2022 covers the projected increase in growing costs for most of the larger operations which make up the majority of the contract volume. We fully recognize that the price increase may not be enough to cover the increase that all growers will face. However, like in any organization, we have to do what is best for the majority of our volume, even if it is not necessarily best for all individual growers. Based on the fact that the majority of growers as well as the majority of the contract volume both voted to accept this price level, we met the goal that was given to us by our member growers.
So while Mother Nature may not have done growers any favors with the extreme heat limiting yields and lowering quality, we at Potato Growers of Washington did meet the stated needs of getting the contracts settled in the fall at a price that covers the cost of production increases for most growers. In a challenging year like this one, we feel pretty good about meeting your needs and look forward to a better year in 2022.
