News Release

Potato Industry meeting set to discuss new plan for managing oversupply problem

BLACKFOOT, ID — A huge oversupply problem has the North American potato industry in a chokehold. Our industry is mature and because of that fact the surplus in storage right now may have no market at any price. PGI has encountered strong opposition from other states for a government diversion plan. Therefore we have concluded that we must find a way to help ourselves.

A company called the Potato Management Company (PMC) has been formed that can manage this oversupply in order to generate a market with positive fundamentals. The program will be presented to growers and industry representatives at 1 p.m. on Tuesday, December 19 at the University Place Auditorium in Idaho Falls.

Fresh and process growers, and shippers from all states are invited to join with us in this true self-help program. We can choose to be victims of the inevitable changes occurring, or to be proactive and initiate change. Here's how it works. All growers with open (non-contracted) potatoes will be asked to pay a fee and sell a portion of their crop in order to create a market for the balance of the crop. All growers will benefit because the unmanageable surplus will be removed from the market. The program is designed to improve both fresh market prices and to insure that the oversupply doesn't hang over next year's market. Even growers who do not have non-contracted potatoes are encouraged to help fund this effort. Timing is critical. The program must be in place by January 15, 2001. There is no time for hand wringing.

An outline of the program follows:

1. Growers commit to a conditional sale contract with PMC for 10 percent of open (non-contracted) 2000-potato crop for a total of $1.
2. Growers sign a one-year renewable membership agreement with PMC and pay $500 to fund the program plus 2 cents per hundredweight committed.
3. PMC takes control of those potatoes and cellars are marked and inspected. The sales contract is not triggered until a sufficient overall volume of potatoes are committed to effect the market for the remaining potatoes.
4. Growers market the rest of their crop as they see fit. Growers may also choose to block their remaining open potatoes with other PMC members for marketing through one desk.
5. PMC will dispose of the 10 percent purchased with any net cost of disposal charged to that member.
6. If a sufficient volume of potatoes is not committed to obtain a reasonable chance of improving the market, any unexpended funds will be returned to the members pro-rata.
7. When a sufficient volume of potatoes is committed to PMC a committee of participants will be formed to make policy decisions for PMC.