Potato Processors cut back Potato Contracts

Potato Processors cut back Potato Contracts
January 26, 2009
The first part of 2008 began as a banner year for spuds.

"But then all of a sudden in the fourth quarter of 2008, things started to change,"Dale Lathim said, Executive Director of the Potato Growers of Washington.

Despite how good the french fries are, the economy forced less of you to buy them. And it put a huge strain on potato growers and processors. By last month, sales dipped.

"When processors saw those numbers, that put the brakes on everything. The potato world changed overnight,"Dale Lathim said, Executive Director of the Potato Growers of Washington.

Suddenly, growers and processors scrambled to scale back. Dozens of orders had to be re-arranged. And too few acres of potatoes were now too many.

Then last week, processors quietly announced they were immediately cutting the amount of potato contracts. French fry demand was way down. They blamed increased costs, a weak economy and changes in fast-food menus.

The big three processors, Lamb Weston (the potato- processing division of Con-Agra Foods), J.R. Simplot and McCain Foods could cut back as much as 20 percent.

"It's going to effect us all,"Lathim said. But he stays positive.

"This is our storm for 2009 and I'm sure we'll weather it just like the others."
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