Potato growers not only in Europe, but also in the United States are discussing contract prices and conditions for the 2019 growing season. However, the contract that McCain is presenting to growers in Idaho is causing unrest in the sector.
The contract cultivation of French fries potatoes in the United States is controlled by 3 players: JR Simplot, Lamb Weston and McCain. The latter chip manufacturer is dissatisfied with the contracts presented. This is what the American trade magazine writes Spudman.
Duty of confidentiality
Before McCain's growers are presented with the contract (with the price and conditions), they must sign a confidentiality agreement. This 'nondisclosure agreement' is not working well with several growers. If we do not sign, we are told that McCain is saying goodbye to the grower in question.
Chuck Stadick, executive director of growers' association Sipco, is one of the potato growers who had to deal with this. Sipco negotiates, on behalf of the growers, with the three factories mentioned about the contract prices and conditions. The cooperative recently even set aside its chairman, because as a grower he signed a confidentiality agreement with McCain.
Contract price is fixed
Despite not signing, Sipco says that McCain wants to keep the contract prices the same as 2017 and immediately commit them for 2 years. It has a great need for potatoes as it is expanding their factory in Burley. The potato growers are hoping for a price increase of at least 4%, in order to be able to compensate for the higher cultivation costs. The University of Idaho also agrees.
According to the growers, contract prices at all processors have fallen by 7% to 8% in recent years. In order to be able to grow profitably, the poorer soils are removed from production. They therefore expect that McCain's attitude will lead to a decrease in the acreage in Idaho. For example, arable farmers choose to expand their crop rotation.
Threat
The grower groups have been struggling with the new potato contracts since last autumn. Anyone who does not sign is not allowed to grow. A colleague will then receive this area, the processor threatens. It is not yet known whether Simplot and Lamb Weston will increase prices.
The total acreage in Idaho in 2017 was 125.455 hectares. This means it controls almost 33% of the entire American acreage; about 45% of this is processed into chips and the rest is grown for the table market or as seed potatoes. More than half of the acreage is of the Russet Burbank variety.
Keep your paw stiff
In October interviewed Boerenbusiness the Canadian potato grower Jan Rademaker, who also grows chip potatoes for McCain. Rademaker, who is originally from Biddinghuizen, is also affiliated with a growers' association and was a board member there for almost 25 years. "You have to hold your ground and say no," is his motto. A profitable contract price is established by law in Canada. If the factory and grower cannot reach an agreement, the judge will decide. However, it has never come to that.