01/27/09 Potato processors cutting volume on 2009 potato contracts

Washington Ag January 27, 2009 Weak economies around the world and a significant drop in French fry demand is leading potato processors to cutback acreage in 2009 potato contracts with growers. Lathim: "We don't know yet how many acres they are going to cut, but all indications are that there will be some." That is Dale Lathim Executive Director of the Potato Growers of Washington. Lathim expects potato acreage in the northwest could drop 10 to 15 percent from last year but the decrease could go as high as 20 percent. While growers got good pricing in contracts agreed to with processors last fall, Lathim says that could change. Lathim: "Because what is happening now is the processors are getting a lot of push back from their customers, the big quick service restaurants, the big food service handlers. They are saying that they are not able to price along the price increases because the consumers can't afford them. The contract price increase that we received actually would require the processors to raise their prices significantly. So there is still a question as to what the price will actually be. We may as grower associations may have to re-look at the price and we might have to adjust it down a little bit to help." Lathim says previously most potato growers were looking at increasing acreage this year. Meanwhile, the Washington State Potato Conference and Trade Show is going on today and tomorrow in Kennewick at the Three Rivers Convention Center. I'm Bob Hoff and that's Washington Ag Today on the Northwest Ag Information Network.