POTATO CARTEL in IDAHO!?! (2009, co-ops, find a job)

[Alexia45]

This is awful! I can't believe someone would actually do something like this!

My husband is going into the potato industry, and it looks like this guy has put together a type of Potato Cartel. Do they still do stuff like this when the world is in a recession and probably need food now more than ever?

[url=http://gregmankiw.blogspot.com/2006/09/opec-for-spuds.html]Greg Mankiw's Blog: OPEC for Spuds[/url]

OPEC for Spuds
By: Greg Mankiw, Harvard University Professor

A reader alerts me to a textbook example of a cartel:

It took farmer Merrill Hanny three days to bury $100,000 worth of his perfectly good potatoes. He remembers how they crunched beneath his tractor as he plowed over his muddy field in the spring of last year.

Mr. Hanny destroyed part of his crop at the behest of the United Potato Growers of America, a fledgling group of regional farming cooperatives. The group aspires to be to potatoes what OPEC is to oil by carefully managing supply to keep demand high and constant, resulting in a more stable return for farmers.

The new organization has been a boon to Mr. Hanny, 53 years old, and other farmers who for years have watched potato overproduction push down prices and mash profits. "For the first time, I feel in control of my destiny," says Mr. Hanny, who is married and has seven children....

In the past year, United Potato helped erase 6.8 million hundred-pound potato sacks from the U.S. and Canadian markets -- the equivalent of about 1.3 billion medium orders of french fries at McDonald's. For farmers, their open-market returns surged to $10.04 per hundred pounds, up 48.5% from last year....

The spud cartel's manipulation of supply is perfectly legal. Orange, dairy and other farmers have employed similar co-ops as market stabilizers since 1922, when the Capper-Volstead Act exempted farmers from federal antitrust laws, permitting them to share prices and orchestrate supply.

From the Wall Street Journal two days ago. As a matter of public policy, it is hard to see any good reason to allow this cartel while outlawing most others.

But I must admit that it is hard for me to separate my objective analysis as an economist from my love of hash browns. So I have two reasons to object to this particular cartel.

Please tell me this stuff isn't true.

[Mtn. States Resident]

Originally Posted by Alexia45

This is awful! I can't believe someone would actually do something like this!

My husband is going into the potato industry, and it looks like this guy has put together a type of Potato Cartel. Do they still do stuff like this when the world is in a recession and probably need food now more than ever?

Greg Mankiw's Blog: OPEC for Spuds



Please tell me this stuff isn't true.

Did you read the comments associated with this article or search for other information? Oh, that was from blogspot where anyone can post anything. Search for the author's original comments and the absolutely ignorant comments by some students (truck the potatoes from ID to New England, without explaining who would pay for the costs, let alone the costs of harvesting). You are talking about your husband's future, yet researching articles from 2005, any special reason for that instead of using present contacts in farming?

Cartel is a strong word to use, unless you've been personally involved. I do realize the Harvard professor chose that word and his dingy students picked it. Again, I encourage you to read the original source that was posted and what the student wrote. This is a very skewed presentation....but one Mankiw likes.

BTW - I grew up on a potato farm and am very curious how your husband has apparently no knowledge of farmers forming a United Group? Or, did your husband know and it was you who didn't? Potato farms tend to stay in families, except for those who had to sell out around the time this Harvard professor (who has never visited a potato farm nor learned the costs of fertilizer, the electricity bill of sprinkling pivots, labor, crop dusting etc. cost). So I still have potato farmers in my family. Did either you or your husband live on a potato farm during your childhood/teenage years, or have a parent that worked in potato processing, fresh pack etc.? I won't say more until you clarify your experience first hand with knowing the subject matter.

If your husband is "going into the potato industry," then he is aware of what has happened the last 15 years to independent farmers. He will know whom to ask.

A group of farmers have merged together so they are in a better position to bargain with those who buy produce. YOur husband should have all that information and when this group formed, what the prices for potatoes were prior to then and after the group formed.

I strongly encourage YOU to research this more, given your post. What will your husband be doing in the "potato industry?"

I'll be interested to find what you post when you research the sbuject, hopefully, more thoroughly this time. Relying on blogspot.....well, lots of families stay in touch that way and it has its place. But, relying on Blogspot for facts, especially when there are multiple facets to a story, is a new idea for me.

MSR

[Mtn. States Resident]

Alexia45,

I was hoping you were from a very distant state and had not experienced any connection with ID previously to have asked this question.

When I clicked on the Utah forum for a different reason, you had a rather interesting post, from today, as well.

Today, 04:28 PM
Alexia45
Join Date: Nov 2009
5 posts, read 39 times
Reputation: 10


"Moving out"


"I'm finally moving away from Utah. Living here has created a love/hate relationship with the culture and beliefs found here, but lack of work has driven me north. I'll miss many of you. Others, not so much. "

"Adeus."

Newsflash, ID shares a lot with UT. Many chain stores have expanded into Idaho, car dealerships, culture and beliefs and etc. can all be found in Idaho as well.

I'm wondering with a post like that leaving Utah how you think you'll be happy in Idaho? Granted, having an income does help and it appears from what you wrote, either you and/or your husband haven't been able to find a job. Or at least not a job that meets your needs.

I applaud you for making a change when you are not in a good financial situation for your family. Many lack the courage. I wonder though, what would motivate a person to write what you did in the Utah forum? It sounds like you don't plan on going back to Utah.

Obviously, you are free to write anything you want at CDF. I'm trying to understand more about you and honestly I am confused. I wonder if you realize what your posts are really saying to others?

Most people I know in today's economy and the changing job scene don't severe ties anywhere. Sounds like your husband must be quite secure with his new Idaho job.

You are a new user, having joined in Nov. 2009. I'd encourage you to ask some where you are moving what has helped them be successful on CDF.

MSR

[teamcoltra]

Honestly something like this isn't that weird.

Do you remember during the great depression (not the depression itself, but history class... smart ass )? Farmers were actually paid large sums to NOT produce certain foods for the season to drive up costs. While this failed to HELP it did cause the prices to go up, and the farmers made more etc. Though the system was abused (like all systems) and whenever a farmer would find out which plant was going to be paid to not produce they would quickly plant them, and then destroy their feild because what they were being paid to not produce, was waay more than they would typically make.

Anyway... the point is: This isn't that weird

[Need2Leave]

There's nothing strange about this story at all. Sometimes dairies dump milk, sometimes farmers don't plant, sometimes oil wells pump slower, sometimes mines shut down. If things continue the way they are headed, some farmland will be lost in the name of carbon sequestration. ALL commodity prices are manipulated in one way or another these days.

BTW... simply adding tons of food to the global supply chain wouldn't do a thing for hungry people... the world already produces much more than it consumes.

[Western gal]

I don't know about any cartel, but there is strange activity in the potato warehouse near us all night. Suspicious fellows by the names of Vinnie, Donnie, Tommy, Anthony and Big Joe in and out all night. Don't forget all the hoagies and meatballs they order......

OK, just joking! Seriously, I think the Harvard professor ought to stick to something in his own state, like the big dig or the Red Sox...