Today, potato producers are in a battle against chaotic economic circumstances. Whatever the source of this chaos, whether politicians, economists, or global influences, economic chaos rules the day. These are some of the most challenging economic times people in business today have ever faced. Navigating this unpredictability is a serious matter. How to succeed from now until calm returns is the challenge, and calm is not just around the corner.
Recent legislation makes clear that most politicians have learned nothing from previous mistakes.
Many of last year’s process contracts saw the largest one-year increase ever negotiated. However large it was, it was not large enough because this year’s contract negotiations aim at an equal or larger increase. (Specific numbers are absent here for obvious reasons, but if you are in the game, you know the point being made.)
While chaos exists on the production side as just illustrated, imagine the chaos on the buy side. Up and down the potato-supply chain, everyone must have product to operate their businesses. Processors must have product in inventory available for those they supply, retailers must have product on grocery-store shelves, food service must have potatoes and potato products to fill out menus and re-baggers must have product in totes waiting in the cold room to be bagged and sold.
During the past one and one-half decades, fresh-potato producers accumulated market data with the goal of helping producers balance the critical supply/demand/price equation, thereby stabilizing both consumer and producer prices. Producers in regions that have balanced this equation now operate their businesses with annually consistent margins with consumers benefiting as well.
Today’s market conditions make it more important than ever before that potato production generates fair returns. Profitability has always been important though some producers just did not know it was. Not a few of those types are either awash in unnecessary debt or no longer producing potatoes.
There is peace, safety, and economic stability in respecting market data. Successful business people seek market data and are anxious to be guided by it.