Impact of Conagra Foods Lamb Weston plant closure

ConAgra Lamb Weston will close its potato processing plant in Prosser, Wash., on May 30, fostering fears other potato processors in the state may close. ConAgra announced the closure to its 250 employees at the plant on March 24, citing a poor market and the plant being the most expensive to run in the region, said Matt Harris, director of trade for the Washington State Potato Commission in Moses Lake. "It's the first french fry plant to close in the state and it might not be the last. That's our concern,"Harris told Capital Press. Domestic consumption of french fries, hash browns and tater tots is down because of the recession, but exports to Mexico have been devastated by a 20-percent tariff imposed when the U.S. ended a cross-border trucking program with Mexico, Harris said. From April 2009 to January 2010, the tariff has cost the U.S. about $30 million in lost frozen potato product exports with half that, $15 million for 32 million pounds, coming from Washington state, Harris said. The U.S. has pending trade agreements with South Korea, Columbia and Panama to lower tariffs but could lose South Korea to other export nations before the agreement is finalized, he said. "Korea is our fifth largest french fry export. It's frustrating to see business opportunities disappear,"he said. "For us as growers, we lose acres. If the demand isn't there the contracts won't be." Canada is picking up U.S. business in Mexico, trucking potatoes right through the U.S., he said. But Dale Lathim, a grower-bargainer with processors as executive director of the Othello-based Potato Growers of Washington Inc., said he doesn't think other french fry plants in the state will close because closure of the Prosser plant brings capacity into line with demand.