The Potato Marketing Association of North America held a special spring meeting this past week in Las Vegas, NV to discuss progress on the 2014 pre-season potato contract negotiations. Growers present expressed disappointment in the tone and direction of this year’s talks. They felt that processors had established a good precedent for establishing sustainable prices by adjusting contract prices according to annual changes in the cost of producing potatoes. This method has worked successfully for both growers and processors as crop input costs varied dramatically over the past 6 years.
As those same input costs have leveled out for this coming year, growers expected that contract pricing would adjust accordingly, but that is not what is happening. Processors are forgoing this reliable method for determining contract price and reducing prices instead to levels far below the cost of production in many areas. While every area must negotiate the best possible agreement for their growers, two common goals stood out that all felt were necessary for a reasonable outcome for both sides.
The goals are:
- Each production area must stand on its own merit and not be tied to a price which another area may negotiate.
- No multi-year agreements should be made without inclusion of a flexible pricing clause that addresses changes in production costs.
Each individual area will continue contracts talks over the next few weeks with hope of reaching agreements prior to planting season.
The Potato Marketing Association of North America is comprised of the bargaining associations in the growing regions of Washington, Oregon, Idaho, North Dakota, Wisconsin, Maine, Alberta, Manitoba, Ontario, Quebec, New Brunswick, and Prince Edward Island.