Column: Whoever has the gold makes the rules — usually
We’ve all heard the adage: “Whoever has the gold makes the rules.”
While generally true the concept does have exceptions. One, the person with the gold makes the rules only if he or she wants to; and two, in a more subtle occurrence, the person with the gold may not realize that he happens to be the one with the gold in the first place.
This second scenario seems to be the case with some potato growers. Consider that everyone in the potato-industry food chain depends upon potatoes for their very existence. Where would they be without potatoes? Without potatoes, there would be nothing to peel, slice, dice, freeze or sell. Without potatoes, they would have nothing to dehydrate. Without potatoes, they would have nothing to pack, ship or sell. In summation, without potatoes they would have to get a job at the convenience store selling corn dogs.
This intends no disrespect to those vital links in the chain that turn potatoes into money. Rather, it is to point out that they are only links in the chain, not its foundation.
Beyond any dispute, the potato grower is the foundation for any dollar that comes afterward.
So why is it that the individual who risks everything to make it all possible must sit across the desk from his loan officer, hat in hand, year after year fidgeting to explain how next year he will pay off his operating line? This should not happen when it is the grower who lies at the foundation of all that comes next in the generation of millions upon millions of dollars flowing into so many people’s pockets, including the banker’s.
Explanations for this unfortunate situation range all the way from manly pride to what academics refer to as a hayseed mentality. It happens because, unlike many in the business who understand how the potato market works and how to use market knowledge to great advantage, some potato growers have yet to realize that they are the ones with the gold. They are the ones who produce the “coin of the realm.”
Because potato growers in key regions have figured this out and now have a sustainable business model, we know that such is possible. By lifting one’s eyes beyond one’s own farm gate and seeing the whole picture, especially the market component, a potato grower can improve his economic life beyond expectations. And this is not because the nature of farming potatoes has changed; farming potatoes is still farming potatoes. What has changed, generating millions of dollars in increased grower revenue, is actually the potato-growing culture itself; successful potato growing now includes — in fact, must include — market savvy. While selling potatoes used to be randomly chaotic, successful selling today happens in a culture where growers work together to gather, analyze and utilize market data to stabilize a fair market price.
Because of this cultural shift, farming potatoes is a more dependable business now than at any time in history. How refreshing is that!
— Buzz Shahan is the chief operating officer of United Potato Growers of America.
