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Maine potato growers take hit on price in new contract

Maine potato growers take hit on price in new contract
Maine’s potato industry took a hit this week as negotiations with the largest processor in the state, McCain Foods in Easton, ended with cuts in the price paid to growers and a 20 percent reduction in the volume of orders.

“It’s going to be a very difficult year,” said Dana Wright of the Presque Isle-based Agricultural Bargaining Council, who led the negotiating team on behalf of about 60 growers throughout Aroostook County. “Our growers are going to have to be extremely frugal and try to weather the storm.”

Don Flannery, executive director of the Maine Potato Board, said growers had been prepared for the bad news since the french fry market nationwide has been stagnant at best or on the decline.

But no one expected cuts this deep.

“I think the decrease in volume was more than what most people anticipated,” Flannery said.

Last year the price paid to growers per hundredweight of potatoes – 100 pounds – was $10.35. For the 2014 growing season, it will drop 48 cents to $9.87, roughly a 5 percent reduction. The state’s potato crop was valued at $168 million in 2013, according to the U.S. Department of Agriculture.

Even more troubling, Wright and Flannery said, is that McCain wants fewer potatoes from growers. And while he was not involved in contracts with Frito-Lay, another big purchaser of Maine potatoes for processing, Wright believes there will be similar cuts there.

Wright said the negotiations were the most grueling he’s seen in his eight years negotiating on behalf of growers.

“This is the hardest one I’ve gone through, personally,” Wright said. “I’m tired.”

McCain is the largest potato processor in Aroostook County. About 68 percent of Maine potatoes are sold for processing – versus the fresh market – Flannery said. Most are grown in Aroostook County.
Companies in this Article
McCain Foods Limited is an international leader in the frozen food industry and the world’s largest manufacturer of frozen potato specialities, employing approximately 18,000 people and operating 50 production facilities on six continents.
Frito-Lay North America (FLNA) includes Pepsico's snack operations in the United States and Canada where the company dominates the market with a range of savory snacks brands including Lay's, Ruffles, Doritos, Tostitos, Fritos, Cheetos and Sunchips
The Maine Potato Board was created in 1986 by an act of the Maine Legislature for the purpose of establishing a cohesive framework for effective leadership within the potato industry.
McCain Foods Limited entered the U.S. market more than 30 years ago and is a leading supplier of frozen potato products for the foodservice markets. McCain also supplies retail grocery chains with both McCain and private label potato products.
McCain Foods USA acquired the Easton, Maine plant in 1976. It is one of the largest frozen potato operations on the east coast.
McDonald's is the leading global foodservice retailer with more than 34,000 local restaurants serving nearly 69 million people in more than 118 countries each day. 
The Pineland Farms Potato Company (formerly known as Naturally Potatoes) is a manufacturer of refrigerated pasteurized cut and mashed potato products in Maine.