April 2007
NPC, USPB Heads Discuss Issues Facing U.S. Potato Industry

The National Potato Council (NPC) and U.S. Potato Board (USPB) are the potato industry’s national voices. Both stand side by side as different but equally important pillars” of the industry. In the following interview, CEOs John Keeling, NPC, and Tim O’Connor, USPB, discuss the state of the potato industry, its strengths and weaknesses, current challenges and how each organization is working to increase profitability for the industry.

Describe the role your organization plays in the potato industry.

Keeling: Basically, we’re the growers’ voice in D.C. on national legislative, regulatory, trade and environmental issues.

O’Connor: The USPB is the central organizing force in implementing demand-building programs for potatoes, domestically and abroad. We expand markets and increase usage.

What is the greatest challenge to the industry, and what are the NPC and USPB doing to address it?

Keeling: The long-term issue remains balancing productivity with demand growth. For the NPC, the strongest role we can play is in opening up new markets and breaking down trade barriers so that the U.S. potato industry has a chance to grow. Our mission is very direct in how we support the industry. We focus on programs that:

1. Maintain free markets for potatoes
2. Protect the potato industry from adverse government programs
3. Provide science-based information to EPA pertaining to potato production
4. Provide input on food safety and nutrition standards to ensure decisions are based on sound science
5. Expand international trade in U.S. potatoes

O’Connor: How to increase the demand for potatoes is always the central question facing the USPB and the industry. We’re still America’s favorite vegetable, but most people are eating fewer potatoes today than they did in the past. We use the following strategies to increase demand:

1. Find new markets abroad for U.S. potatoes. Every new export sale is new demand that lifts the market for all growers.
2. Educate consumers about potato nutrition. We know from our consumer research that one third of consumers hold negative opinions about the nutritional value of potatoes, but the nutrition messages the industry has been united in delivering to consumers are beginning to turn some consumers around positively.
3. Give consumers exciting new potato meal inspiration through new varieties, packaging, recipes and in-store merchandising that expand consumers’ meal ideas beyond our traditional potato meal barriers that inhibit increased meal occasions. We can only increase demand by innovating and connecting with consumers.

What are the major accomplishments that your organization has achieved for the industry over the past year?

Keeling: Elimination of unfair Canadian trade practices has held our attention for a few years and will take even more time to achieve. This year, however, we successfully engaged three dozen members of Congress, the U.S. Trade Representative (USTR), the USDA and the Department of Commerce to work together to help to more fairly open up the Canadian market to our potatoes. While the NPC’s position has long been to resolve problems in a positive manner, when cooperation fails all available resources of the potato industry and the U.S. government will be utilized this is exactly what the case is with Canada right now. We will continue to address this issue until fair trade is obtained.

We have also been successful this past year in working with USDA to purchase potatoes for domestic and international feeding programs, including school feeding, food aid and Second Harvest. This past year’s purchases by USDA were historically high. Additionally, USDA initiated and expanded a program to purchase potatoes directly from farmers for school programs. Instead of processors bidding, the farmers bid on the contract, USDA delivers the potatoes to the processor and the processor delivers a branded product for the schools. This should prove to be more efficient and beneficial to farmers.

O’Connor: The Healthy Potato campaign has made a significant difference in consumer eating habits, as both potato servings and positive attitudes about potatoes have increased 4 percent in one year. The entire industry individual growers, shippers, states and national organizations made a commitment to supporting the Healthy Potato campaign, and that effort has repositioned potatoes in people’s minds. This was the first measurable payoff from the investment in the nutrition campaign.

We continue to research our retail recommendations, to make sure our “Best Practices” truly are the best practices. With this research, we convinced 21 shippers and six retailers to develop new packaging that appeals to consumer needs. Nine retailers expanded their assortment beyond traditional offerings, and 26 shippers now manage the potato category for their retail customers by using USPB information.

By marketing the full portfolio of U.S. potato products frozen, dehydrated, seed, table-stock and chip international marketing is increasing the use of U.S. potatoes and expanding market penetration. The value of exports to USPB-targeted markets increased 17 percent last year. Fueling that growth are new product launches, new foodservice customers and new menu items. Additionally, our strategic work has helped generate more than $16 million in fresh and chipping potato exports to new markets and $6 million in dehy sales to Food Aid.

What is one of the greatest decisions that your organization’s leadership has made on behalf of the U.S. potato industry in the past three years?

Keeling: Honestly, relocating the NPC to Washington, D.C., three years ago made us present and part of the game. Visibility makes a difference and by having an office in D.C. we are just that -– more visible. It’s really made a difference in working with the agencies and Congress. Being right down the road means we are there when they need us there’s no substitute for that.

O’Connor: No question about it, the decision to redirect budgets to develop a consumer nutrition campaign that was strong and aggressive enough to halt negative consumption and attitude trends. It was a difficult decision to deplete our reserves and shift funding from international and retail marketing programs, but as we all know, it’s paying off.

There is a shrinking pool of growers being asked to participate and play a leadership role in both the state and national organizations. Is there competition among the organizations for leaders?

Keeling: Definitely not. A lot of growers have a specific interest either in the lobbying side, so they get involved with the NPC, or in marketing and serve on the USPB. More and more, we are getting growers who complete a tour of duty in one organization, then go on to serve on the other. It’s highly beneficial to both the NPC and the USPB when a grower serves on both boards—they come in with a strong background on how the two organizations must work hand in hand.
We don’t want to burn out volunteers, so we are always seeking to grow that pool of grower leaders. That’s why the USPB and NPC developed the annual Potato Industry Leadership Institute. It’s an intense, week-long training for 20 or so individuals who are interested in playing a leadership role in local, state or national potato organizations. We expose them to aspects of the potato industry outside their growing region and specialty areas so that once they complete the week they can take the tools provided and be confident representing the industry on a national level. The success of the program shows in that almost every one of the institute participants has pursued some type of industry leadership position following their training, whether it be at the local, state or national level.

O’Connor: Cultivating leaders for the future is important, whether it’s a year or two down the road or a decade from now. The USPB gladly invests time and resources in the Leadership Institute and our own board member training. Friendly competition for grower leaders is healthy, and I invite it. It motivates excellence in our industry’s organizations. When growers gain leadership training and experience they strengthen the industry’s long-range foundation.

What surprises have you had this year? What new directions are you excited to see?

Keeling: I think what’s happening with the entire industry in the area of trade is important and exciting. The NPC, the USPB, the state organizations and the American Potato Trade Alliance (APTA), working together, have the ability to open and expand markets and to make a meaningful impact on the demand for U.S. potato products. Whether it’s Mexico or China or Korea, we’re there every day, chipping away, approaching all the issues with a united front.

The positioning of the potato in the revised dietary guidelines and pyramid graphic is also exciting and very positive for the industry. It goes right along with the industry’s efforts in educating consumers on the nutritional benefits of potatoes. I’m also encouraged by the opportunity for specialty crops to be given the same consideration as program crops in the 2007 Farm Bill. The NPC created a Farm Bill Task Force that will begin to review opportunities for the ’07 Farm Bill and will serve as industry representatives at hearings and in filing comments.

O’Connor: The best surprise was how completely the industry rallied around the nutrition campaign and continues to stay engaged. It was the full-industry press that made the campaign successful in moving the needle, and that is a direction I’m glad to see.

What kind of changes could the industry make for the fastest growth?

Keeling: Get involved and be active know what’s going on. Contact your congressmen when issues come up. Just stay on top of issues. Stand together and rally together when issues arise.

O’Connor: We need to give the consumer new reasons to eat potatoes. That will require growers and shippers to bring the type of innovation to what they do that berry, mushroom, tomato and many other growers have already done. Growers should begin to experiment on a small scale today with new varieties and marketing tactics that will be the drivers of their business in the future. Doing better at the same things that they are today won’t be enough for growers to remain competitive tomorrow.

If you would like to comment on any of the issues discussed by Tim O’Connor and John Keeling, e-mail Kimberly Warren at [email protected] You also can send your comments via fax to (616) 887-2666.

75 Applewood Dr. Ste. A
P.O. Box 128
Sparta, MI 49345
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