Potato growers hit by deep cuts in contract
Potato growers took a major hit in contract negotiations after the state’s largest processor reduced its volume of orders by 20% and the price paid to growers by nearly 5%.
The Portland Press Herald reported that Easton-based McCain Foods will pay $9.87 per hundred pounds of potatoes for the 2014 growing season — 48 cents less than last year. The new contract will also see McCain Foods buying less potatoes from potato growers.
Nearly 68% of Maine’s potatoes are grown in Aroostook County and sold to processors.
Dana Wright of the Agricultural Bargaining Council in Presque Isle, who led negotiations with McCain Foods for about 60 growers in Aroostook County, said he expects similar cuts with other processors, including Frito-Lay, another large potato processor in Maine.
“It’s going to be a very difficult year,” Wright told the newspaper. “Our growers are going to have to be extremely frugal and try to weather the storm.”
Wright said farmers would be paid about $3,158 per acre under the negotiated price with McCain Foods — $158 more than the average cost to plant potatoes in an acre. Potato growers typically make a 3-4% profit margin, according to the newspaper.
Don Flannery, the Maine Potato Board’s executive director, said the contract reduction is a reflection of what’s happening across the continent, though Maine has experienced greater cuts because of its proximity to markets. He said the drop in demand is likely related to the harsh winter and dietary trends leading people to eat less carbohydrates.
Earlier this year, Cavendish Farms suspended its potato planting operations in Presque Isle, citing unfavorable market conditions. The move by the J.D. Irving Ltd. subsidiary cut 13 jobs and delayed a $2.7 million potato storage investment.
A Mainebiz feature from last year documented the efforts by Aroostook County potato growers to innovate with new technology investments and flexible business plans to stay competitive. "We have had to find our place in the market, and that's something Maine has done fairly well," Flannery told Mainebiz in early 2013.
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