Business | Spring 2010
Good market intelligence heads off bad production decisions.
By Gerald Pilger
Canadian potato growers mirror a U.S. information network that helps them anticipate supply and price
In an era of government mandated, check-off funded commodity groups, there is one organization that is strikingly different — the United Potato Growers. A creation of potato growers themselves, this federated cooperative has a mandate to provide member growers with more and better market and production information.
Ray Keenan, a PEI potato grower and chairman of the United Potato Growers of Canada (UPGC) says, "The prime objective of UPGC is to improve marketing through better data collection and information analysis. After all, you cannot manage what you do not know."
Barb Shelly, communications officer for the sister organization United Potato Growers of America (UPGA), describes the UPGA as the means for potato growers to take control of their own industry. "By working together, growers have achieved improvement and stability in prices and markets."
Creation of a federated cooperative of potato growers began in Idaho in 2004. According to Shelly, growers often lost money in the volatile potato market by competing with each other and overproducing. "They were not producing to demand because they simply did not know what that demand was."
Under the 1922 U.S. Capper-Volstead Act (The Co-operative Marketing Associations Act) that allows growers to work collectively to market agricultural production, Idaho growers created a state cooperative intended to manage the Idaho potato supply. These growers also encouraged potato growers in other regions to create their own supply management cooperatives. That initiative triggered 10 grower cooperatives. Within a year, it became apparent that national coordination of these groups was needed if the goal of stable potato pricing was to be achieved. So in 2005 the UPGA, with a head office in Salt Lake City, UT, was created. The mandate of this federated co-op is to manage national potato production to ensure a consistent supply of high quality potatoes at a reasonable price.
According to Shelly, information gathering and dissemination is key to managing the supply of potatoes, and this is the primary focus of the UPGA. "The UPGA gathers potato supply numbers directly from growers. Members also provide information on quantity of potatoes in storage, production costs, and shipping. As well, UPGA staff monitor demand for potatoes."
The vast amount of data collected, explains Shelly, is then analyzed and converted by UPGA staff into supply and demand information that growers can use to develop their individual marketing plans. Any member of the UPGA can access the information at any time via a members-only section of the UPGA website.
Shelly says the biggest benefit of this system is the quality of information generated. "UPGA members love growing potatoes. They recognize the need and value of good information and so the data they provide is of high quality. Weekly conference calls between the co-ops, and website updates three times a week, keep the information current."
In Canada, provincial potato growing organizations have worked to support and promote the potato industry for years. As a result, market information has been largely provincially based. Seeing the benefits the UPGA has achieved by sharing information nationally in the U.S., the Canadian provincial potato associations supported establishment of the UPGC in 2006. As in the U.S., the UPGC was launched to improve potato marketing through better information and analysis. Ninety eight percent of Canadian potato growers are now represented by the UPGC.
"The prime objective of UPGC is to improve the data system through monitoring selling prices, truck rates and availability, shipments, and storage, as well as crop and weather conditions throughout the growing season," says Keenan. "We want to make sure the user’s potato needs are met, that no sector is shorted, and that we supply all the potatoes ordered."
Canadian potato growers can also access up-to-date market information through the Internet. As well, regular telephone conference calls are held to share market information with members. And the UPGC has also partnered with industry to give growers educational opportunities.
Gord Medynski is director of sales and purchasing for Patates Dolbec, a large, diversified farm in St-Ubalde, QC. Each year, 3,000 acres of the 10,000-acre family farm is planted to potatoes for table, seed and processing markets.
"UPGC helps growers exchange information and share market intelligence. We can find out about supply and demand across North America. We also learn what varieties are working for other growers, and hear about new technology that may have a fit on our farm," says Medynski.
"I am not always able to participate in the UPGC telephone conference calls due to timing but I can contact other UPGC growers, many of whom I have never met face to face, to get their thoughts on the market."
While the UPGC provides only market information, the UPGA has gone one step further and now makes recommendations to growers about the number of acres of potatoes to plant in an attempt to balance supply and demand.
Due to above average yields last year, high potato stocks and reduced demand due to the economic downturn, the UPGA is recommending its growers reduce 2010 acreage by 25-30 per cent from their base (2004) level, to maintain prices. FF
