Profitability in Potatoes Pt 2
I’m Bob Larson. Given our inflationary times, rising crop prices are helping to make soaring input costs … bearable. But how long will it last?
At the Potato Expo in Anaheim, University of Idaho Assistant Professor and Extension Specialist, Pat Hatzenbuehler tried to ease the frustrations and help growers understand how negotiations may be key to your success …
HATZENBUEHLER … “Contracts are pretty common within the potato industry, especially for processing, but those are usually focused on output prices or the price that the farmer receives for the potatoes. But, not less so on the input costs, and so in this new environment in which input costs, there’s a lot of volatility, the contract that only preserves your price that you’re getting from the processor doesn’t really protect you in terms of the margin from volatility in the inputs.”
So, Hatzenbuehler says talk over prices with your processors that work within your margins rather than just the output prices …
HATZENBUEHLER … “At least anecdotally, in Idaho it’s pretty common to have discussion between and their input dealers to say, I want to be with you for the long run so this is a year that we want to be able to provide you the inputs you need and price that works for you, then we can be in touch and continue to communicate about getting through this.”
Hatzenbuehler says establishing those relationships and effectively communicating a strategy that allows adjustments is important in these challenging times.
