NFO-211 (AV10713): US Farm Report:Potato Bargaining

welcome to us farm report a public iNFOrmation program brought you in interest of Agriculture rural business and the well-being of our nation by members of the national farmers organization in this area and others interested in having American agriculture received cost of production plus a reasonable profit the American farmers and ranchers are building a brighter future for agriculture through the national farmers organization the organization that awoke America and represents the leadership of Agriculture us farm report presents potato bargaining with Gordon Shafer chief negotiator for the national farmers organization and Del Liddle head of NFO specialty crops here now for US farm report is Gordon Shafer we appreciate the opportunity to appear on this program today as previously stated I am Gordon Shafer chief negotiator the national farmers organization and administrative assistant to Oren Lee Staley our national president as most of you folks probably know the national farmers organization is a relatively new farm group we've actually only been working on our bargaining approach a few short years in the beginning the NFO was nothing more than a protest movement but after a couple of years of this type of an approach the membership realized that we needed to do it yourself approach to the farm program as a result at our third annual convention the officers of the organization were directed to come up with a program of collective bargaining for agriculture now this was a good big job to be assigned to a group of people because nothing like this had ever been tried before in the United States but after studying what little bargaining was being tried and after talking to many many people all over the United States the officers the organization did put together a program of collective bargaining for agriculture a program which would cover all commodities a program under which we could be bargaining nationwide on all products so that prices could be brought up more or less simultaneously on all products now in just a short time comparatively speaking our organization has grown until we now are organizing in 45 of the 48 states on the continent we believe that much progress has been made we think that the total bargaining effort he is proceeding satisfactorily last fall The California Farmer one of the leading firm magazines in the nation ran a survey in California asking farmers which bargaining groups they thought were doing most in the field of bargaining in this particular survey the NFO ran second the Raisin bargaining Association of California was listed first as being the most outstanding bargaining group in the state of California according to the farmers in the state of California we in NFO have always been looking for and anxious to locate people who had knowledge in bargaining and as a result we are always trying to locate people that can assist us in our effort we have with us tonight as was previously stated a man by the name of Del Liddle now Del was the first manager general manager of the raisin bargaining Association and it was under his leadership that most the raisin bargaining work had been done at the time the survey was run we talked to mr. little and we finally managed to convince him that he should come with any fault to head up our specialty crops division at this time I'd like to introduce you to mr. Del Liddle and let him tell you a little bit about himself and his work with the raisin bargaining group mr. Liddle thank you Gordon Schafer it's certainly my pleasure to appear here on this program with you and to be a part of this tremendous movement across our nation to help our farm people secure a cost of production plus a reasonable profit which as I understand and I'm sure you do is the basic fundamental principle upon which the National Farmers organization was founded the success story that I have to tell you about the razing bargaining Association of the San Joaquin Valley in California is one that I'm very proud to report to you because it's a success story that was accomplished by farm people themselves it was my pleasure to be their general manager and to work with them during this period and I take great pride in the fact that we were successful let me just briefly say that in the fall of 1966 the raisin producers of California had as usual signed open price contracts with their packers the previous two years the Packers have paid the growers 250 dollars a sweatbox ton for their raisins as they come into the packing plants they had promised in 1966 to pay the grower another two hundred and fifty dollars a ton which was apparently satisfactory to the growers at that time however as after the raisins were delivered some of them were actually packed and possibly even consumed by you and I as consumers the packer indicated that they would settle for 230 or cut $20 from the growers return and this $20 of course as you can appreciate is many times the market margin of profit so in the fall of 1966 the growers banded together and determined to organize a non-profit farm cooperative under the laws of the state of California and we incorporated on December 30th 1966 we opened our office the following March and proceeded to enroll members and on the 1st of June and I'm briefing this very brief we had some 70,000 tons of raisins blocked together with a thousand and 26 growers and we stopped enrollment at that time because we had the big problem ahead of us of selling the 70,000 tons of raisins we proceeded during the next four or five months to negotiate a contract with 11 major packers raisin packers in the Fresno area and succeeded eventually and signing these packers to two-year sales contracts in which they agreed to by all of the raisins that we had blocked together from the growers whom they have been previously servicing to brief the star even further we after much negotiations and this was a tough battle and I'm very proud to say that the growers stuck together 100% and this of course is basic and fundamental to successful collective bargaining the price that we finally agreed upon in 1967 for the entire free tonnage crop of raisins out of the valley was three hundred and five dollars per sweatbox ton or $75 over the previous year the grower who had invested 50 cents per ton in a membership agreement at now a return of $75 per ton to take to the bank and enjoy himself and pay off his debts this to me is a success story that I'm extremely as I said before proud of this was a gain of 32 percent over the previous year now the following year we succeeded in signing additional members increased our tonnage to 90,000 tons and proceeded to increase the price that the grower received for his free tonnage raisins to three hundred and twelve dollars for the 1968 crop this is the present price that all growers are receiving for their raisins and we know that we have returned to the grower well in excess of seven million dollars money that he would not have had before and I maintain that this is a success story that any group of growers can accomplish if they will stick together and if you multiply that seven million dollars garden by the seven times that we know represents the true relationship of a dollar sales and behalf of an agricultural commodity and as it works its way through the economy of our nation it increases seven times and again may I say I'm proud of this story well thank you that certainly is a success story and we appreciate your being here to tell it for us today as you know we are here today to talk about potato bargaining when you think about potatoes a lot of farmers not realizing that potatoes are as important to crop as they are may think that these potato crops are maybe perhaps not as important as they actually are to many farmers potatoes are important they're all that many farmers produce and of course they are a sizeable crop when you think of the crop in relation to the amount of money that's involved might be interesting to note the various uses for potatoes we find according to government statistics that in 1967 approximately 39% of the potatoes produced in the United States were used for the Fresh Market now this would amount to nearly 30 million bags hundred weight bags of potatoes now besides the Fresh Market of course we have a seed market which is a relatively small market something like two hundred and thirty thousand sacks in addition to this our other big market is the food processing market that use about thirty four million bags in 1967 and then what we call our non-food market which of course is the starch plant and livestock feed these together consumed approximately twelve million five hundred thousand bags of potatoes in 1969 the non Fresh Market using about sixty one percent of the total supply of potatoes and we might look for just a minute to see where these potatoes are grown Idaho we find is our biggest producer of potatoes producing nearly 30% of the total crop in the United States next Idaho we find the Red River Valley probably running second with something like 15% of the total crop this includes of course the states of Minnesota North Dakota some in South Dakota the third largest producing area is the state of Maine where they produce approximately 11% of the total crop then we find the balance of what you might call the Northwest area including Washington Oregon in California coming about fourth area wise in production and they produce about ten percent of the total crop now in addition to these major producing areas we have other states such as New York Pennsylvania Wisconsin Michigan Colorado and some others that are considered to be major producing areas so we find that potato production is like a lot of other crops it's pretty widely scattered over the United States now Del since you have only recently come with us I believe that I will take the time here to discuss a little bit of the history and NFO's history in potato bargaining to go back about a year ago or perhaps just a little more than a year ago now we began to find a lot of interest among our members out in the various areas who were potato producers in trying to get together blocks of potatoes and bargained for a better price and of course at this time we found prices were very low last April which is not quite a year ago now we had our first what you might call a potato meeting here in Corning, Iowa where our NFO members from all of these areas which I mentioned above gathered to discuss the problem some of the fellows incidentally who did come to that potato meeting and this is only just a few but we had Willie Edwards from California John LaRue from Colorado Del Rayhome and Kent Remington from Idaho Glen Manuel from Maine Harold Smith from New Jersey Bruce Nichols from Oregon Larry Anderson from Washington and quite a group of in addition to these that I have named now when they came together here it's considerable discussions about the prices that were then being paid for potatoes over the various parities and we found that potatoes were bringing from 75 cents to a dollar and in some cases perhaps just a little bit per hundred after much discussion the members assembled decided that we should go back to the various areas and concentrate our efforts in organizing more production into an in fo block now the members were going to go back home and talk with the members that couldn't come about the cost of production they were going to have meetings and they were going to work on what it actually cost to produce an acre potatoes in their area or to break it down further a hundred pounds of potatoes they were going to talk about the going price of potatoes in their area they were going to try to show the members that actually the prices they were receiving were below the cost of production then they were going to try to urge these members to organize to get out and talk to the men to the neighbors that were not members of NFO yet about the possibility bringing potatoes together for block bargaining and selling you know August we had a second meeting some of these same fellows and some more came together in in August to discuss the progress that had been made and to further discuss the problem and what NFO thought could be done about the problem again we had many hours of discussion it was brought out in this discussion that probably our principal problem actually was with the grade-b or they and the cull potatoes the grade-b in case some of you don't know what we're talking about is the smaller potato that still sound it's usable it's a very valuable potato actually to the processing industry well it's a potato that no one had been receiving anything for so far as the farmers were concerned we actually found that our producers were receiving as little as ten cents a hundred down to ten cents a ton and in some areas our producers were actually paying the processors as much as ten cents a hundred to haul these potatoes out of the cellars to their processing plants bear in mind that once they got them to the processing plants these same potatoes were just as valuable in many cases to the processor as what we might call a number one fresh potato so we found that it was really a situation where the processor was actually getting his product to process from the members for nothing most cases just practically nothing as a result we proposed and fo members assembled at the second meeting in August proposed that when they started digging the fall crop they dispose of the grade-b potatoes now these brand minder the ones that had never had brought him anything anyway well some of the boys when they went back home from Corning began to promote this plan more vigorously than others in the state of bargain and in the northern part of California our members very actively promoted this program and when they started to dig they opened up the chains on their digging machines and let these grade-b potatoes drop back on the ground now of course this eliminated the grade-bs now when the boys in Idaho learned that this is what the boys in Oregon were doing while they got together and decide did that although most of their potatoes were dug and were already in their cellars they would not sell the grade-b potato and therefore the grade-bs were also eliminated from the market in the state of Idaho now this meant that the processors on the west coast were drastically short of grade B potatoes or processing potatoes immediately they began to try to buy potatoes and it wasn't long until they were offering as much as a dollar and a quarter per hundred for these grade B potatoes the same potatoes that they had been getting for nothing the offer was first made in Oregon when they found that there was no great beat potatoes available then they went to Idaho where they offered as much as a dollar in 75 cents per hundred for grade B potatoes the Idaho producers got together and decided not to ship potatoes out of the state so then they tried Colorado and finally they were bidding as much again there's a dollar in seventy-five cents a hundred with the apparent intention of transporting the shipping these potatoes back to the west coast for processing now it wasn't that there was no potatoes to be bought in Oregon potatoes were available but what apparently they wanted to do was to move a quantity of potatoes into the Oregon area thereby forcing down the Oregon market well Gordon I think that is a tremendous success story for the national farmers organization it certainly compares with the story that I told you we enjoyed in California with the raisin bargaining Association just to review that again here's a fact that the potatoes have been raised in price from ten cents - as high as a dollar in 75 cents per hundredweight for grade B potatoes and I in fact know mr. Schaefer of a producer who has sold the grade B potatoes that are now in his warehouse at $2 per hundredweight that's real success in my book yeah as we said earlier we planned to get together at the national convention in December in St. Louis and make further plans for a bargaining effort on potatoes now I know you were not yet with us but I also know that you have familiarized yourself with the program which was adopted at St. Louis and I'd like for you to take a few minutes to go over the major points of this program points well thank you again the group of growers who got together then at the National Convention in St. Louis in December 1968 outlined a number of objectives that they had that they intended to put into practice during the coming and ensuing year and we are following this program at the present time I'm going to read it a couple of the items at any rate so that you will get the real deep significance of this program number one NFO will make an all-out effort to get processors and handlers of potatoes to pay the cost of production plus a reasonable profit to any MFO producers for all potatoes used number two NFO will work for a minimum price net to the grower of $2 per hundredweight field run with a maximum of 50% number one great potatoes with the local areas bargaining above this figure for the best price obtainable now where this pricing formula does not work NFO will work for a minimum price for us number one potatoes of three dollars per hundredweight Neph to the grower now another item is number NFO will make available to its members a potato sales agreement under which NFO members will be urged to sign for sale of their potatoes through the NFO bargaining process to the processing plant NFO will work for an equalized storage payment for better reflecting so that might better reflect the cost of storage and shrinking and another item NFO will work toward getting potatoes removed from the futures market because people quite frankly with money are playing the futures market and disrupting the potato market so that the legitimate potato grower is having difficult difficulties shall we say getting a reasonable price for his raisins and so it was decided that any four would immediately prepare a potato sales agreement to which our members could group their production we would also prepare supply contracts which could be signed with processing plants the program then both for the balance of the 1968 crop which was still on hands and for the coming crop of 1969 was that we would use our potato sales agreements and block together our production then go to the processing industry and offer this for sale at the quoted price as you mentioned they're two dollars per hundred for I can't quote exactly but it was for a number of us number one yes now I believe it was for the field run potatoes with 50% or more number ones that's correct Gordon yeah I'm sorry I made an error now since a convention can you tell us briefly I see we're about to run out of time what program has accomplished well fine since that time of course our growers have continued to sign sales agreements for their 1968 crop as well as for the 1969 crop and of course our big success with regard to the supply contract was our first NFO supply contract signed with a potato buyer in i which represented 210 dollar correction I'm in the potato industry now two dollars and 10 cents per hundred field run potatoes that is 50% number one and this contract also had a clause an incentive clause for quality so that some of our growers Gordon actually received two dollars and 80 cents per hundred under that contract well fine now the inner foal is continuing since this first contract to sign additional contracts and I believe that subsequent contracts have been signed almost every one at a little bit higher price till it's my understanding correct me if I'm wrong that today in Idaho our members have been receiving as much as three dollars and fifty cents per hundred for the potatoes which were signed under a sales agreement and sold through our supply contracts which were field run potatoes with fifty cents minimum number one potatoes now I think that there's no reason why other areas could not do the same thing that Idaho has been doing in Maine for example I understand that we now have 75% of all of the potato producers in Maine signed into NFO they are now beginning to group their production together and expect to proceed in bargaining the same as we're doing in Idaho and other areas in all commodities for that matter can and will be doing the same thing absolutely US farm report has presented potato bargaining with Gordon Shafer chief negotiator for the national farmers organization and Del Liddle head of NFO specialty crops members of the national farmers organization invite you to tune in again next week at the same time for more facts on Agriculture and Rural America which is the gear wheel in our economy that produces the majority of our nation's new wealth the farm income pattern sets the nation's true prosperity level the national farmers organization represents new thinking in a new generation of agricultural producers a brighter day for American agriculture