Potato Country July/August 2019

Page 1

Essentials: Transportation & Packing

PLUS:

Cashing Out Navigating the Smoky Haze Potential Disruptive Forces for the 2019-20 Potato Crop For the Advertiser Index click here

PotatoCountry.com • July/August 2019 Western focus. National impact.


w w w . Po t a t o Co u n t r y . c o m

Vol. 35 No. 5

PO Box 333 Roberts, Idaho 83444 Phone: (208) 520-6461

Country Western focus. National impact.

Table of Contents

July/August 2019

Publisher, Advertising

Denise Keller ..............................editor@ColumbiaMediaGroup.com Editor

Insect Identification

Jeff Miller .....................................................jeff@millerresearch.com

Comparison of Metam Fumigation Methods

9

Dave Alexander ...........................dave@ColumbiaMediaGroup.com

Andy Jensen.......................................... www.nwpotatoresearch.com

4 To Broadcast or Not to Broadcast: 6

Contacts

Disease Identification

Bruce Huffaker ................................................. napmn@napmn.com Market Report

Dale Lathim ............................................................... dale@pgw.net

Potato Growers of Washington

Brian Feist ...................................brian@ColumbiaMediaGroup.com

Navigating the Smoky Haze

Operations Manager, Advertising

Impacts of Wildfire Smoke on Potatoes

USMCA Is Vital to Regaining Momentum on Trade

National Potato Council

10 Five Minutes With‌

Gary Roth, Oregon Potato Commission Executive Director

12 Cashing Out

An Employee Stock Ownership Plan (ESOP) as an Alternative to a Straight Sale

18 Transportation & Packing Essentials Buyers' Guide

EDITORIAL INFORMATION Potato Country is interested in newsworthy material related to potato production and marketing. Contributions from all segments of the industry are welcome. Submit news releases, new product submissions, stories and photos via email to: editor@ColumbiaMediaGroup.com. ADVERTISING For information about advertising rates, mechanics, deadlines, copy submission, mailing, contract conditions and other information, call Dave Alexander at (208) 520-6461 or email dave@PotatoCountry.com. SUBSCRIPTION INFORMATION U.S. $24 per year / Canada $40 per year / Foreign $80 per year Subscriptions can be entered online at www.potatocountry.com or call (503) 724-3581. Email address changes/corrections to brian@ColumbiaMediaGroup.com or send to Potato Country, PO Box 333, Roberts, ID 83444. Potato Country magazine (ISSN 0886-4780), is published eight times per year and mailed under a standard rate mailing permit at Idaho Falls, Idaho and at additional mailing offices. It is produced by Columbia Media Group, PO Box 333, Roberts, ID 83444 Copyright 2019. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, for any purpose without the express written permission of Columbia Media Group. For information on reprints call (208) 520-6461.

Editorial Board

24 Potential Disruptive Forces for the 2019-20 Potato Crop Market Report

Gary Roth

Chris Voigt

Executive Director

Executive Director

Washington State Potato Commission

Oregon Potato Commission

As crews fumigate a field, researchers are evaluating the efficacy of various fumigation methods. See the story on page 4.

(509) 765-8845

On The Cover

Departments

Trucks make their way through a potato field during harvest. Check out the latest products to help get your spuds from field to market in the Transportation and Packing Essentials Buyers’ Guide starting on page 18.

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Potato Country

(503) 239-4763

July / August 2019

14 15 22 22 26

Disease Quiz Insect Quiz Calendar In the News PGW Column

Nina Zidack

Frank Muir

Jim Ehrlich

Montana Seed Potato Certification

Idaho Potato Commission

Colorado Potato Administrative Committee

Director

(406) 994-3150

President/CEO

(208) 334-2350

President/CEO

(719) 852-3322


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To Broadcast or Not to Broadcast:

Comparison of Metam Fumigation Methods By Jeff Miller, Miller Research LLC

V

erticillium wilt is one of the most prevalent diseases faced by potato growers. The disease is caused by the fungus Verticillium dahliae. The fungus penetrates potato roots and grows into the water-conducting elements (xylem), plugging them so that water cannot travel up into the plant. Plants wilt and die early, thus reducing yield. Verticillium wilt can be exacerbated by the presence of root lesion nematodes. Often the disease complex resulting from the Verticillium fungus and the nematodes is called potato early dying. Managing this disease can be done through growing resistant varieties, optimizing fertility and irrigation and by soil fumigation. Metam sodium and metam potassium fumigants are effective in reducing Verticillium propagules and reducing root lesion populations in the soil. For this reason, fumigation with metam products has been considered the most effective chemical method for managing Verticillium wilt and potato early dying. Traditionally, these fumigants have been injected as a broadcast application in the soil in the fall or spring prior to planting a potato crop. Drawbacks to metam fumigation include the high cost and the perceived environmental impact. Metam fumigation can cost as much as $5 per gallon, and with application rates being between 40 and 60 gallons per acre, the total application costs can be between $200 and $300 per acre. If metam sodium is applied at 40 gallons per acre, the amount of active ingredient applied is 170 lb per acre. All other pesticide inputs combined on most potato crops in the Pacific Northwest do not exceed 10 lb per acre. Several years ago, growers began to experiment with reducing the area of soil treated in order to reduce cost and to reduce the amount of active ingredient being applied to the environment. Rather than broadcast metam fumigants through the entire soil profile, fumigant was

4

Potato Country

July / August 2019

Table 1. Summary of total yield and quality from fumigation trials conducted in 2014, 2015 and 2017

Total Yield (cwt/acre)

%US #1 Tubers

2014 – Russet Burbank Non-fumigated In-row, 20 gal Broadcast, 40 gal

421 b 483 a 490 a

68 a 69 a 78 a

2014 – Russet Norkotah 278 Non-fumigated In-row, 20 gal Broadcast, 40 gal

391 b 467 b 592 a

71 b 86 a 91 a

2014 – Russet Norkotah 285 Non-fumigated In-row, 20 gal Broadcast, 40 gal

257 c 447 b 567 a

32 c 74 b 87 a

2015 – Russet Norkotah 296 Non-fumigated In-row, 20 gal Broadcast, 40 gal

693 c 732 b 802 a

78 ab 70 b 81 a

2017 – Russet Burbank Non-fumigated In-row, 30 gal Broadcast, 40 gal

633 b 729 a 699 a

48 b 60 a 65 a

2017 – Russet Norkotah 296 Non-fumigated 683 b 73 a In-row, 30 gal 775 a 84 a Broadcast, 40 gal 776 a 79 a Within each trial, means with the same letter are similar to each other. applied in a concentrated band right within the hill where the potato seed would be planted (Fig. 1). With this method, potato hills are formed as the fumigant is injected, thus saving a pass through the field. This is referred to as “in-row” fumigation in this article. Research trials were sponsored by the Northwest Potato Research Consortium in 2014-15 and 2017 to compare broadcast and in-row metam fumigation. Each year, the trials were conducted with three treatments: 1. Non-fumigated check 2. Vapam applied in-row at 20 or 30 gal/acre 3. Vapam applied broadcast at 40 gal/ acre These trials were conducted on ground

that has a history of potato production. The results of these trials are shown in Table 1. In 2014, metam was applied in-row at 20 gallons per acre. The trial was conducted in a commercial field where each treatment was applied in large strips and different varieties were planted within the strips. Data were collected from four different locations (pseudo-replications) within each strip. In-row fumigation resulted in similar yield and quality as broadcast fumigation for Russet Burbank. The two Russet Norkotah lines (278 and 285) were also tested, and in-row fumigation did not perform as well as broadcast for total yield. Both methods improved the percentage of US#1 tubers compared to no fumigation for both


Norkotah lines, but broadcast was more effective than in-row for total yield with Norkotah 278. In 2015, only Russet Norkotah 296 was used. This season, broadcast fumigation was more effective in terms of total yield and quality than in-row. In-row fumigation did increase yield compared to no fumigation. Neither method improved quality this year. In 2017, the in-row rate was increased to 30 gallons per acre. With this higher rate of in-row fumigation, the differences between in-row and broadcast were not significant. Plant vigor late in the season was greatest for the broadcast metam fumigation (Fig. 2). Total yield and quality were similar and both methods Potato plants show symptoms of Verticillium wilt. provided an improvement over the nonfumigated control. For Russet Burbank, however, the percentage of 10-ouuce tubers was greatest with broadcast fumigation. This increase in size did lead to a significant increase over in-row fumigation for gross dollar return based on a fresh pack estimation. The increase was not significant when the dollar return was calculated based on a mock processing contract. In all of these trials, nematode Representation of soil cross section where Representation soil cross section where Representation of soil cross section where Representation of soil cross section where Representation of soil cross section where Representation ofofsoil cross section where numbers were very low in the trial metam sodium (green) was applied as a metam sodium (blue) was applied as a banded metam sodium (green) was applied as a metam sodium (blue) was applied as a ban metam sodium (green) was applied as a metam sodium (blue) was applied as a banded area. Laboratory analysis showed that broadcast application 9 inches below the soil application within the row broadcast application 9 inches below the soil application within the row broadcast application 9 inches below the soil application within the row surface Verticillium dahlia colonization in plants Figure 1. Examples of broadcast and banded metam fumigant application surface surface was reduced similarly by both in-row 1. Examples of broadcast andmetam bandedfumigant metam fumigant application Examples of broadcast and banded application and broadcast fumigation. BasedFigure on 20171.Figure results, it appears that using 30 gallons per acre may be more effective for inrow applications. This approach reduces the cost and total active ingredient load of pesticide by 25 percent. Even at the lower rate (20 gallons per acre), in-row fumigation was generally cost-effective and significantly improved potato production over no fumigation. Broadcast fumigation was the most consistent and resulted in the highest dollar return per acre in all cases. So to broadcast or not to broadcast? In-row fumigation is an effective method for managing Verticillium wilt, especially at 30 gallons per acre, but may not always be as effective as broadcast applications. In-row fumigation would be an effective way to reduce the amount of active Non-fumigated In-Row Vapam Broadcast Vapam ingredient applied to potatoes while still allowing growers to manage Verticillium Figure 2. Aerial photographs of plant vigor in non-fumigated, in-row fumigated and broadcast fumigated plots in 2017 wilt. PotatoCountry.com

5


Navigating the Smoky Haze Impacts of Wildfire Smoke on Potatoes By Carrie H. Wohleb, Washington State University

A smoky haze from area wildfires clouds the view from the hills above Ephrata, Wash. in August 2018.

Last year’s wildfires blanketed many potato growing areas in smoke and ash. Here’s what we know about how it affects your crops.

T

he policy over much of the last century to quickly suppress wildfires no matter where they occur has led to a buildup of fuels in forests. This, coupled with some hot and dry conditions, is resulting in more frequent and intense wildfires across much of the U.S.

What’s in Wildfire Smoke?

Wildfires discharge large amounts of carbon dioxide, black and brown carbon, and ozone precursors into the atmosphere, and when they mix with air, they can form ozone and organic particulate matter. Many of these things are toxic pollutants that can be harmful to plants, people and animals when exposed to them in concentration. These emissions also affect solar radiation and other factors that influence the weather we experience at the ground level. 6

Potato Country

July / August 2019

Ozone Levels Vary

Ozone is one of the most damaging air pollutants for plants. It enters through the stomata (the pores on the surface of the leaf) during normal gas exchange processes. Once inside the plant, it forms reactive oxygen species that can damage cell membranes and cell contents. Exposure to high concentrations of ozone for several hours can result in visible injury to leaf tissues. Symptoms may include stippling (small, brownblack spots), flecking (tiny, light-colored spots), bronzing and reddening. These symptoms appear within a few hours or days of the exposure. With continued exposure to high concentrations of ozone, symptoms can progress to chlorosis, necrosis and early plant senescence. Chronic exposure to more moderate levels of ozone may cause no visible symptoms, but it can still impair plant functions and limit growth. We see ozone symptoms on potatoes occasionally in the Columbia Basin of Washington. But because ozone levels are highly variable, we do not see these symptoms every time there is smoke.

Despite the presence of ozone precursors in smoke plumes, ozone does not always form in large concentrations. It is less likely to concentrate under cool, windy and cloudy conditions. In fact, I have only observed ozone symptoms on potatoes or other plants when wildfires were nearby (within 100 miles), it was very hot and sunny, and air inversions kept the smoke low to the ground and limited its dispersal.

How Does Smoke Affect Photosynthesis?

Some growers have speculated that wildfire smoke is limiting yields by reducing light intensity and thereby slowing photosynthesis. But the ways that smoke influences photosynthesis are complex. The main factors that determine the photosynthetic rate are light intensity, carbon dioxide concentration and temperature. Obviously, light intensity is reduced by smoke, but smoke does not completely block the sun’s rays. By contrast, carbon dioxide levels are increased by wildfires.


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Smoky Haze Increasing carbon dioxide usually leads to an increase in the photosynthetic rate because normal atmospheric levels tend to be limiting. Temperatures are often more moderate when there is smoke. Since the optimal temperature for potato growth peaks around 86 degrees Fahrenheit, the smoke cover may actually be a positive factor in regions that experience high daytime temperatures. So the degree to which smoke limits potato yields probably depends on how much light is actually being blocked — the darker it is, the more likely it is having a negative effect. This is an oversimplification of the influences smoke can have on photosynthesis since we must also consider that the chemical constituents of smoke can have damaging effects on plant functions at a cellular level.

Smoke Alters Environmental Conditions

Smoke, especially when it’s associated with air inversions, has some unexpected effects on environmental conditions. Smoke tends to prolong thermal air inversion conditions because it blocks sunlight and inhibits some of the radiant warming of the ground layer that is needed to break up the warm inversion layer. Essentially, the warm inversion layer acts like a lid trapping cooler air at

cover can modify the environment so that it favors these diseases.

Smoke and Human Health Concerns

In this picture, the stippling is only apparent where the leaf was exposed to air. The portion of leaf that has no symptoms was covered by another leaf.

the surface. If the conditions are cool enough at night and water condenses on the plants, smoke can help to keep dew around longer because it blocks the sun’s rays and delays evaporation.

Implications for Potato Diseases

We tend to see an increase in some potato diseases when slightly cooler and wetter conditions prevail. In the Columbia Basin, our hot and dry summer environment usually discourages diseases like gray mold (caused by Botrytis cinerea) and late blight (caused by Phytophthora infestans.). But smoke

Potatoes typically show a leaf stippling symptom when exposed to high concentrations of ozone. The stipples are usually found on both sides of the leaf.

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Potato Country

July / August 2019

If you want to know how wildfires (and other things) are affecting air quality, you can visit the EPA’s AirNow website (https://airnow.gov/). The website has maps that show current readings from sensors that monitor air quality across the country. The readings are displayed in a color code that relates to concerns for human health: green is good, yellow is moderate, orange is unhealthy if you have asthma or some other conditions that make you more sensitive, and red to purple means conditions are unhealthy or hazardous for everyone. This website also provides information about how to protect yourself when air quality conditions are poor. You should really pay attention to this information if you are responsible for other people who work outside. Editor’s note: This article was first published in American Vegetable Grower magazine’s February 2019 issue.

Smoke cover can modify the environment so that it favors potato diseases such as late blight. Photo courtesy Tim Waters, Washington State University


National Potato Council

USMCA Is Vital to Regaining Momentum on Trade By Kam Quarles, National Potato Council CEO

I

n late May, the Trump administration announced it was sending the new United StatesMexico-Canada Agreement (USMCA) to Capitol Hill for approval by September. The potato industry strongly supports this action by Congress and is aligning with other agriculture groups to gain the votes in the House and Senate for approval. The USMCA was signed by the leaders of all three countries last fall. However, for it to become effective, all three countries’ legislative bodies must individually ratify the agreement. The ongoing trade disputes had effectively sidelined any consideration of the agreement by the U.S. Congress. A necessary first step to breaking the logjam occurred on May 17 when it was announced that the U.S., Mexico and Canada had all agreed to eliminate retaliation that stemmed from the U.S. steel and aluminum (Section 232) action. This was important, as experts believed that the retaliatory tariffs had to be eliminated for the necessary votes to emerge for the USMCA. Canada and Mexico are the second and third largest export markets for U.S. potatoes. It is estimated that $80 million annually in frozen fry exports were jeopardized by Mexico’s 20 percent retaliatory duties. U.S. congressional consideration is occurring as both Canada and Mexico have started their own approval processes. The Canadian House of Commons is currently considering the Canada-U.S.-Mexico (CUSMA) Implementation Act. Mexico has also changed some of its labor laws to satisfy U.S. concerns. This includes new labor courts and conciliation bodies to assist workers across Mexico. The U.S. House and Senate approval of the USMCA will be challenging. Since the last approval of a free trade agreement, over 70 percent of Congress is entirely new. In 2018, there were 104 exiting

House members, making it a 23 percent turnover just in the last year. The Democratic majority in the House has several concerns they want addressed before approving the new pact. House Speaker Nancy Pelosi and others are moving that the USMCA be altered to ensure proper implementation on Mexico’s labor standards and other concerns with the environment. Additionally, some new representatives and senators (both Republican and Democratic) have campaigned on skepticism over the benefits of trade to the U.S. Those individuals will need to be provided with specifics on the value of this new agreement in order to gain their votes. Two weeks after the administration removed the Section 232 tariffs, it

announced another round of tariffs on all Mexican goods due to concerns over the influx of asylum-seekers crossing the U.S.Mexico border. It appears that these tariffs will not go into effect as threatened, but similar actions during the congressional ratification process would make it very difficult to get the required votes. The National Potato Council is strongly supportive of passing the USMCA. The successful implementation of this agreement will send a clear message to other trading partners that the U.S. is serious about opening vital overseas markets to American agricultural exports. It will make wins on a future free trade agreement with Japan, a settlement with China and trade pacts with other countries much more likely.

PotatoCountry.com

9


Five Minutes With…

Gary Roth, Oregon Potato Commission Executive Director

G

ary Roth is the new face of Oregon spuds. He took on the role of executive director of the Oregon Potato Commission May 1, and Potato Country caught up with him shortly after to learn more about him. Tell us a little about your background and what brought you to the Oregon Potato Commission. I grew up in agriculture and have been involved with the industry my whole life. I grew up on a 300-acre farming and ranching operation. I attended Oregon State University and studied agricultural and resource

economics. My first job was with the Oregon Farm Bureau as a lobbyist, and then I went to work for the Oregon Department of Agriculture for two 12-year stints with five years in between. During those 24 years, market access, market development and international trade were the primary focus of my work. That work ranged from something as local as farm to school all the way through international trade, primarily in Asia and Europe. I arrived at a point where I felt that I wanted to look for an opportunity to take that range of experience and focus it on something more specific

than the 225 to 250 commodities that Oregon grows. Working for and serving the State of Oregon was an honor and something I greatly enjoyed, but I was looking for an opportunity to go an inch or two wide and a mile deep. The opportunity came up with the Oregon Potato Commission, and it has been exactly what I was looking for. What makes you most excited about being part of the Oregon Potato Commission? It has exceeded my expectations in terms of the breadth of opportunities

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Potato Country

July / August 2019


and the reach that the industry has. Every day, we’re talking about something that’s very interesting and exciting and hopefully very beneficial for the industry. I work with a great group of growers and handlers from across the state. I get to represent all four corners, if you will, of the state that I love. And there’s the more familiar side of market access and development, and those are projects that are on the horizon for the summer and fall, and I’m looking forward to working on those, as well. Share with us something about yourself that people might find surprising. I don’t know; I’m a pretty straight forward guy. I love horses, and I have ridden them my entire life. My grandfather logged with horses, so it’s something that has been in my family for a long time. I continue to keep at least a couple of them on my property, and my kids ride, as well. So that’s something that we enjoy as a family. Another thing is that I think some of the best potatoes are served in some of the lesser known restaurants that some people won’t even admit they go into. They do the absolute best job serving up tater tots and French fries. Every time I ask them what their secret is they tell me they change the oil a lot.

As a child, what did you want to be when you grew up? I probably either wanted to be a horse trainer or I wanted to be a businessperson. If Hollywood made a movie about your life, who would you like to see cast as you? Robert Redford when he was the age he played Hubbell in The Way We Were… because that’s who my wife is really in love with. What’s on your bucket list? I would love to go to South America, particularly Chile. I would love to spend some time in Africa. Why Chile? It’s counter-seasonal to Oregon in so many of the products that we grow here so I was always interested professionally as to what they grow there and how they grow

it. I wanted to learn more on the ground about what the interface has been between the government or the public sector and the agricultural community and how they’ve grown their exports, particularly on the fresh side. What advice do you have for potato growers competing in today’s market? Always remain curious. Yes, it’s so important to take care of the business at home. But always stay curious about what goes on beyond the boundaries of your own operation because out there is where the policies are made that influence your business; out there is where your products are consumed, marketed and sold. It’s important to always keep an eye out and remain curious about all those things because they really do impact the bottom line.

What’s your favorite potato dish? My absolute favorite is the small red potatoes, maybe cut in half. My wife puts a little bit of olive oil, salt and garlic on them and puts them under the broiler in the oven. Do you have a motto or personal mantra that you live by? Try to be kind and listen to what others have to say. That’s something I’ve used a lot professionally. You still reserve the right to disagree, but at least give everyone a shot.

PotatoCountry.com

11


Cashing Out

An Employee Stock Ownership Plan (ESOP) as an Alternative to a Straight Sale By John Zitzmann and Bill O’Brien, Financial Advisors, Morgan Stanley

D

oes this sound like anyone you know? You’ve owned, run and built the value of your family farm for more than 30 years. You’re ready to cut back, enjoy your well-earned retirement and cash in on your years of hard work. No one in your family is ready to take over, so you’ve been thinking about selling the farm. But something is stopping you. For one thing, what about your employees? They’re good, loyal people who depend on you, and you’d like to be able to secure their futures. That may not be possible with a simple sale. Your legacy is also important to you; it’s hard to imagine the farm with a different name, or run by someone you don’t know or even repurposed in a way that alters the character of the community. And to be totally honest, you’re not 100 percent committed to full-on retirement. You’d like to maintain a presence on the farm – more like a “semi-retirement,” you might say.

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Potato Country

July / August 2019

Consider an ESOP

We have quite a number of clients who own and run family farms who are approaching traditional retirement age. Some want a typical retirement, certainly. But more and more baby boomers want to stay involved somehow. They may be ready to relinquish day-to-day responsibility, but they’ve put so much of themselves into the farm, and they want to continue to have a role in it. Under circumstances like these, one option we may discuss with clients is an Employee Stock Ownership Plan (ESOP). An ESOP offers a serious alternative to selling a business. It lets the owner or owners stay connected to the business, while still taking out significant wealth. It’s also a great option for rewarding employees. If you are familiar with ESOPs, it may seem odd to associate it with a sale of a farm. After all, aren’t ESOPs benefits plans, used to give employees a stake in the enterprise? Well, yes, but an ESOP

can be used to accomplish many of the key objectives of selling the business, including allowing the owner to cash in on the value of the asset. Because the ESOP trust purchases the equity from the owner, he or she can take cash out of the business without selling it to an outside party. Under this arrangement, the ESOP owns the company, and the employees are allocated shares based on their compensation. Since the ESOP trust itself owns the property, there is no outside buyer to disrupt the day-to-day operations of the farm. In fact, the owner is permitted to retain a significant percentage of the farm’s equity, determined by the preferences of those involved. The only threshold is that the ESOP must own at least 30 percent for certain tax benefits to be available.

Tax Benefits for Farm, Seller ESOPs offer significant tax advantages for all parties. As long as certain


Zitzmann

O'Brien

requirements are met, the proceeds from the sale may be exempt from capital gains taxes. In fact, an ESOP is one of the few ways for an owner to transfer wealth from the farm without triggering capital gains taxes. The farm may realize important tax benefits, as well. The mechanics of how this works are a bit arcane to fully describe here, but the financial features of the ESOP provide several opportunities for meaningful tax savings. ESOPs are also popular when the market for the farm is soft. And they provide some flexibility to the owner for passing wealth to the next generation.

About the authors: John Zitzmann is a financial advisor with Morgan Stanley Global Wealth Management in Providence, Rhode Island. William O’Brien is a financial advisor at Morgan Stanley in Chicago. Authors’ note: The information contained in this article is not a solicitation to purchase or sell investments. Any information presented is general in nature and not intended to provide individually tailored investment advice. The strategies

and/or investments referenced may not be suitable for all investors as the appropriateness of a particular investment or strategy will depend on an investor's individual circumstances and objectives. Morgan Stanley Financial Advisors do not provide tax or legal advice. Clients should consult their tax advisor for matters involving taxation and tax planning and their attorney for matters involving trust and estate planning and other legal matters.

Weighing All Options

ESOPs are not for everyone. It’s a great solution for some of our clients, but not in every case. For example, it only makes sense if you have at least 25 to 30 full-time employees. Also, the owner doesn’t get all the cash up front, which may be a deal-breaker for some. When considering whether an ESOP is right for you, you should consult your legal and tax advisors. When a client is looking toward retirement, we like to present several alternatives built around their needs and objectives. The ESOP is one alternative that can help overcome the hesitation some owners feel about selling. But it’s just one option. Morgan Stanley has been working with family farm owners for many years, and we understand the emotions that come with a decision to sell. It’s a mixed bag. Many of our clients have spent their lives on the family farm. On the one hand, it’s a once-in-a-lifetime opportunity. On the other, it’s a big change. We want to discuss every option and help them make the best choice for themselves and their families. After all, a client only does this once. It’s important to get it right.

GREEN. THE PROFITABLE COLOR.™

PotatoCountry.com

13


Know Your Potato Diseases

Disease Identification Quiz Dr. Jeff Miller Dr. Jeff Miller, a plant pathologist, is the president and CEO of Miller Research, Rupert, Idaho. He can be contacted by phone: (208) 531-5124; cell: (208) 431-4420; jeff@millerresearch.com

Potato virus Y (PVY) is one of the most important diseases facing potato growers today. The virus is spread primarily in seed and by aphids. The virus is transmitted from aphid to potato in a non-persistent manner, which means the virus resides on an aphid’s mouthpart (stylet). Once the aphid acquires the virus, the virus can be spread to another plant immediately. For this reason, control of PVY by using insecticides targeting aphids is not completely effective. Historically, three primary strains of PVY were recognized: PVYO, PVYN and PVYC. PVYNTN was a sub-strain of PVYN capable of causing tuber necrosis. PVYNWi is a newer common strain, which is a recombinant of PVYO and PVYN. In this quiz, three different varieties are shown: Ranger Russet, Alturas Russet and Clearwater Russet. Each row shown in the photos from left to right compares healthy, non-infected plants to infected plants. Can you tell which strain of the virus (PVYO, PVYNTN and PVYNWi) was used to inoculate which row? (Hint: Plants in row one are healthy.) Photos courtesy Dr. Alex Karasev, University of Idaho

Answers Page 23

Ranger Russet

Alturas Russet

Clearwater Russet 14

Potato Country

July / August 2019


This material is provided courtesy of Andy Jensen, Ph.D., Manager of the Northwest Potato Research Consortium. For more information, visit www.nwpotatoresearch.com.

Insect Biology Quiz Dr. Andy Jensen

It’s that time of year again to deploy yellow sticky traps to monitor for beet leafhopper and/or potato psyllid. Several years of evaluating yellow sticky traps showed me that many insects appear on them. Below are four interesting and somewhat unusual catches. Can you identify them and tell me something about their biology?

B

C A D

Answers on page 23

For a FREE CertiďŹ cation Directory, email Dr. Nina Zidack at potatocert@montana.edu

Uncompromising Standards, Generation after Generation. We have the seed for you! www.montanaspud.org

PotatoCountry.com 167820MonPot13h.indd 1

9/18/17 11:45 AM

15


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Held June 12, 2019 in Kennewick, WA Event Hosted By:

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To God Be The Glory!


transportation & PA

Automated Produce Equipment www.automatedproduceequip.com

Upmatic Master Bagger/Baler, Columbia Okura Robotic Palletizer

Automated Produce Equipment’s Upmatic Master Bagger/Baler, which is in use in potato and onion sheds, allows for the re-allocation or reduction of labor on the end of the line. The addition of a Columbia Okura robotic palletizer is also value added as a labor-saving installation. Robotic palletizers typically have a lower acquisition cost and have fewer moving parts than traditional machines. Other benefits include the elimination of injuries and workers’ compensation claims associated with pallet stacking.

Chinook Equipment, Inc. www.chinookequipment.com

edp Electro-bagger

The new edp Electro-bagger model AB-2218-DF has the ability to handle bags as well as cartons and reusable plastic containers (RPC). All that is needed is an optional set of carton holders, and operators can use the touchscreen to select bags, cartons or RPCs. There is no need to move machinery to make the changeover. Users can also control the belt speeds with the touchscreen, as well as the speed of the entire machine and the “no bag photo eye.” These adjustments can be made at any time, even if the machine is in operation. Push-button control of the bag clamps is now included as standard equipment for this model, providing ease of use. The latest design also features a larger in-feed area from the belts to the bag holder to allow for larger produce.

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July / August 2019


Visit our web site and view videos and photos. Learn how convenient E-Z Tarp can make your hauling.

ACKiNG Essentials Designed to make covering and uncovering truck loads safer, faster, and easier.

EZ-Tarp

www.ez-tarp.com

Automatic Truck Tarper

The EZ-Tarp is a fully automated tarp that is easy to install and is completely operational from the truck cab. Workers won’t be walking on the crop with the EZ-Tarp deployed. It is designed to make covering and uncovering truckloads safer, faster and easier.

Kerian Machines www.kerian.com

Speed Sizer

The Kerian Speed Sizer will gently and accurately sort potatoes by size. It is affordable and proven in use for both long (russet) potatoes and round potatoes including reds and whites. With 13 standard models, the Kerian Speed Sizer can fit applications from small packing lines to large processing plants. The constantly rotating rollers provide consistent and precise sizing that is fast, gentle, accurate and easily adjustable. Stainless steel models and stainless steel contact points are also available. The sizer offers each grower a maximum value and a machine perfectly suited to their capacity and number of sizes.

PotatoCountry.com

19


transportation & PA

Milestone

www.milestone-equipment.com Inline Sizer, AccuSizer

Milestone’s inline sizers and AccuSizers offer gentle and accurate sizing in a compact package. Standard inline sizers are available in numerous configurations and can incorporate the company’s proprietary quick adjust and sizing star for increased sizing accuracy. The AccuSizer has been many growers’ go-to for washed or peeled potatoes for over 30 years. The tried-and-true design, along with robust construction, has earned the AccuSizer a reputation of precise and low-maintenance operation.

Trinity Trailer Mfg., Inc.

www.trinitytrailer.com/spuds Ultra Spud Tail Fin

Unloading spuds can be an ordeal – both for the potatoes and the drivers hauling them. During unloading, potatoes can take a hard fall to the piler or conveyer belt, bruising the product. Or potatoes can bounce off the conveyor belt, smashing onto the ground and spoiling the spud. Trinity Trailer Mfg, Inc., an Idaho-based belt trailer manufacturing company, engineered a simple solution for its trailers: the Ultra Spud Tail Fin. This unique feature is simplifying life for haulers of potatoes and other agricultural commodities. The 24-inch shaft mount tail fin extension and its tapered edges gently funnel the cascading potatoes – or beets, onions and other commodities – onto the piler or conveyer belt. The cleaner unload produces less waste, meaning less time clearing spoiled spuds from the receiving area and more time back on the road. 20

Potato Country

July / August 2019


ACKiNG Essentials

Western Trailers

www.westerntrailer.com Western Spud Express Trailers

Lightweight innovation is in Western Trailers’ DNA. In 1972, when customers needed to move more spuds per load, Western Trailers designed the first Spud Express. It was and still is among the lightest weight high quality trailers on the market. Western’s use of high tensile steel in the chassis, state-of-the-art paint process and aircraft aluminum body provide a trailer that will survive the toughest conditions that the potato industry can throw at it, along with maintaining its good looks for years to come. Western Spud Express trailers deliver more to growers’ bottom line with more spuds per load along with high resale values.

PotatoCountry.com

21


In the News

McCain Begins Expansion in Washington

McCain Foods USA Inc. is making a $300 million investment in its Othello, Washington, potato processing facility. The 170,000-square-foot expansion will add another battered and conventional French fry processing line and bring an anticipated 180 new jobs to the community. The added capacity will require approximately 11,000 additional acres sourced from potato growers in the region. “This investment signals confidence in Washington, its potato growing community and its skilled workforce availability,” said Jeff DeLapp with McCain. The expansion also brings environmental efficiencies, reducing the facility’s carbon footprint while doubling its production, according to the company. Construction began in May and is expected to be complete in early 2021.

Mexico Removes Tariff on Frozen Potatoes

Three days after U.S. President Donald Trump removed the Section 232 steel and aluminum tariffs on Canada and Mexico, Mexico responded by removing its 20 percent tariff on frozen potatoes from the U.S. The tariff had resulted in a 26 percent decline of U.S. potato exports to Mexico during the first three quarters of the July 2018 – June 2019 marketing year, according to numbers from Potatoes USA. Mexico is the U.S. potato industry’s third largest fry export market. Potato industry leaders are hopeful that the resolution of this trade issue will lead to the passage of the United States-Mexico-Canada Agreement.

WSPC Welcomes Three Commissioners

The Washington State Potato Commission (WSPC) has added three new commissioners to serve three-year terms beginning July 1. Adam Weber from Quincy will fill the District 1, Position 2 seat formerly held by Rex Calloway. Jordan Reed from Pasco will serve in District 2, Position 8, taking over for Ted Tschirky. And Marvin Wollman from Warden was elected to fill the at-large position, formerly held by Stacy Kniveton.

US Potato Exports Inch Upward

U.S. exports of frozen, dehy and fresh potatoes have all posted modest gains through the first three quarters of the July 2018 – June 2019 marketing year. The impact of the very small 2018 crop in the EU is further increasing demand for U.S. products. However, ongoing trade wars have limited U.S. exports as has the strong U.S. dollar. Strong domestic demand in the U.S. has also constrained available supplies for export. The volume of frozen potato exports is up less than 1 percent, with strong exports to Japan, Korea and other Asian markets offsetting losses to Mexico. The volume of dehydrated potato exports is up 2 percent, driven by increases to non-traditional markets. Fresh potato exports are up 1 percent, led by increases to Mexico, Canada, Korea and Central America with declines in exports to Japan, the Philippines and Taiwan tempering the gains.

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July / August 2019

Research Review Points out Health Benefits of Potatoes

Recent reviews published in the American Journal of Potato Research are touting the health benefits of spuds. The first article discusses the role of potatoes in helping to combat chronic inflammation. Potatoes contain components such as resistant starch and fiber that can impact gut bacteria, which in turn, can produce compounds with potential anti-inflammatory activity. According to the research, this can help improve gut function and can be effective against diseases such as obesity and type 2 diabetes. The other review focuses on the potential positive impact of high-quality, nutrient-dense carbohydrates versus lowquality carbohydrates on performance. The article points out that potatoes contain macro- and micro-nutrients as well as energy, offering the full range of benefits athletes need, and potatoes are an excellent way to replenish the body's carbohydrate stores to normal levels for immediate use.

Calendar July 10-12

National Potato Council Summer Meeting

Chula Vista Resort Wisconsin Dells, Wisc. Hillary Hutchins, hillaryh@nationalpotatocouncil.org

July 28-Aug. 1

Potato Association of America Annual Meeting Delta Hotel Winnipeg, Manitoba, Canada www.eventcamp.ca/event/paa2019

Aug. 12-15

Potatoes USA Summer Meeting Westin Nashville Nashville, Tenn. Chelsea Madix, (303) 873-2332 or chelsea@potatoesusa.com

Oct. 17-19

PMA Fresh Summit Convention and Expo Anaheim, Calif. www.freshsummit.com


Know Your Insects Answers (from page 15)

R ITE T RACE Advanced Track & Trace System

Tracks from known locations in the field to precise layers and areas in storage

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Photo A is a larva of a ground beetle, family Carabidae. Ground beetles are common predators in and on the soil in potato fields. It is very unusual to catch a larva on a sticky card. Photo B is a damsel bug, family Nabidae. These bugs are common on sticky cards and are important predators in the foliage, feeding on aphids, psyllids, Lygus and Colorado potato beetle. Photo C is a click beetle, family Elateridae. Click beetles are the adult stage of wireworms, the notorious soil-dwelling pests of potato and many other crops.

FI E

Photo D is the pupal case and shriveled adult of a big-headed fly, family Pipunculidae. These flies are common parasitoids of leafhoppers, including beet leafhopper. This particular specimen emerged as a fully developed larva from a captured leafhopper on the card. I then held the card in the lab until the adult emerged.

EASILY TRACE loads from field to storage n Modular design to suit any size operation. n Straightforward components are easy to install. n Integrates with Greentronics yield monitor.

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Know Your Disease Answers (from page 14)

Plants in row two were inoculated with PVYO. However, the Clearwater Russet plants were not infected, so row two in that photo also represents healthy plants. Plants in row three were inoculated with PVYNWi. Plants in row four were inoculated with PVYNTN. As these pictures show, different virus strains can cause different symptoms, and varieties do not all respond the same way.

to DETAILED MAPS

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Market Report

Potential Disruptive Forces for the 2019-20 Potato Crop G

rowers generally base their potato acreage on perceived demand for their product, though that may be altered to some extent by relative prices for competing crops. Despite efforts to rightsize crops, the open market for potatoes can be extremely volatile. The biggest single disruptive factor in the market is year-to-year changes in average potato yields. Second on the list of disruptive market factors is unfounded expectations for demand. This year, a few other factors could prove to be disruptive forces in the potato market. Processors are planning to ramp up production at several new facilities. If that process doesn’t go smoothly, they could have more potatoes under contract than they need. While global potato supplies always influence North American markets, European crop development could be extremely critical this year.

Deviations From Trend Yield

U.S. potato yields have been in a relentless upward trend since World War II. During the last 20 years, the national average yield has increased 3.9 cwt per acre per year, on average. However, there are several things to understand about trend yields. First, ideal growing conditions are not necessary to produce trend yields, only average growing conditions. Second, trend yields are a large-scale phenomenon, not applicable to individual growing operations. Yields for individual operations increase as farming practices change. Those yield changes are often abrupt and rather dramatic. Trends are smoothed out because individual growers adopt new farming practices at different times. Experience shows that when yields in a particular growing area reach new heights, they usually don’t fall back.

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July / August 2019

Deviations from trend yields are a driving force for potato prices. When yields exceed the trend, prices for open potatoes tend to fall below the cost of production, while below-trend yields result in stronger prices. Open market price movement deviates exponentially with the magnitude of yield deviations from the trend. Market price research shows that potato yields are as good of a predictor of potato prices as the volume of sales. Several factors drive deviations from the trend yield. They include the timing of planting, summer temperatures, cloud and/or smoke cover, disease issues, first frost dates, harvest conditions and demands by buyers to sacrifice yields to supply immediate raw product needs. During the past 20 years, deviations from the national average trend have ranged between -11.9 cwt and +15.4 cwt. As farming practices have improved, deviations from trend appear to have narrowed. Between 1999 and 2008, the average deviation from the trend was 7.3 cwt per acre. During the most recent 10 years, the average deviation dropped to 4.4 cwt per acre. Several factors could influence this year’s yield deviation. Planting and crop development got off to a slow start in most of the fall potato growing areas. As we go to press, planting is not yet complete in several growing areas. Late emergence could limit yields. In some growing areas, surplus water is another concern. Other factors to watch as the season unfolds include summer heat, rainfall events, first frost dates and fall harvest conditions. When evaluating growing conditions, observers have a tendency to set the expected yield at the trend, with expectations that any deviation from

ideal growing conditions will push yields below the trend. That is a fallacy. Growing conditions only need to be “average” to make a trend yield. That would include some adverse weather events. Ideal growing conditions often lead to yields that exceed the trend by a large margin. Other factors can lead to surprisingly strong yields. For example, shifting acreage from low-yielding areas to higher yielding areas boosts average yields.

Unfounded Expectations for Demand

Unfounded expectations for demand can have a major impact on potato supplies and prices. The chip potato industry provides a prime example. When supplies of storage raw product are tight, buyers ramp up new-crop production in Florida, Texas and throughout the early spring growing areas. In such circumstances, they often overestimate their needs and underestimate the yield potential of the early fields. The extra supply pushes back harvest dates for later fields and ultimately results in potatoes backing up in storage. That happened with the 2017 crop. The same scenario may occur this year if summer growing conditions do not intervene. Idaho table potato growers also may be dealing with unrealistic expectations about demand for their product. They have been marketing a record volume of potatoes from their 2018 crop without pushing grower returns much below the cost of production. Planting for the 2019 crop may have been based on expectations that they could continue to move potatoes at that pace during the coming year without serious price repercussions. Such expectations fail to recognize that the market for the 2018


crop was facilitated by small crops in several other growing areas, which losses are unlikely to be repeated in 2019.

Raw Product Overages

North American processors have opened two new large French fry lines in the last 12 months and are scheduled to open two additional lines between now and next winter. They have contracted for potatoes to run those lines through the coming year. However, if they run into problems ramping up production on those lines, that could back up raw-product supplies and push some of the contract potatoes into the fresh market. While two of the lines are located in Canada, that may not insulate the U.S. market from the impact of raw product overages.

Global Potato Supply

Global potato supplies can impact the U.S. market. About 15 percent of the U.S. potato crop is exported, either as fresh potatoes or as processed products. European crop losses in 2018 tightened global potato supplies. European growers have increased planting this year. If growing conditions return to normal, Europe could have a large potato crop. However, parts of Europe’s main potato growing area remain dry, while Poland is dealing with flooding. World potato markets will be focused on European growing conditions this summer and could be subject to extreme volatility. That could spill into the U.S. market.

By Bruce Huffaker, Publisher North American Potato Market News

HUFFAKER'S HIGHLIGHTS • Year-to-year changes in potato yields are the strongest driver of open potato prices. When yields exceed the trend, prices tend to be depressed. Below-trend yields drive strong prices. • Ideal growing conditions are not needed for potato yields to match the trend, only average conditions. Ideal conditions can result in yields coming in well above the trend. • Unrealistic expectations for potato usage requirements can destabilize markets. This year, they could lead to overproduction of chip potatoes, as well as overproduction of table potatoes in Idaho. • Fryers may have contracted for more raw product than they need if they run into problems ramping up production on new processing lines. • Potato markets are likely to be extremely sensitive to European growing conditions this summer. Editor’s note: To contact Mr. Huffaker, or to subscribe to North American Potato Market News (published 48 times per year), write or call: 2690 N. Rough Stone Way, Meridian, ID 83646; (208) 525-8397; or e-mail napmn@napmn.com.

PotatoCountry.com

25


Potato Growers of Washington

More Than Potatoes Were Bruised in 2018 By Dale Lathim, Potato Growers of Washington

I

n the May/June issue of Potato Country, I discussed the historic spring weather that we had in the Columbia Basin and the subsequent late start to the planting season. As is the case in most years in the Basin, Mother Nature has given us great weather to put us nearly back on track. As I write this column, the crop appears to be only five to six days behind normal, and with the contingencies that the processors built into their run schedules in case we did not catch up, it looks like the crop should be ready when they want it in mid-July. While the new crop is growing nicely and catching up from its late start, there is still a lot of talk about the amount of bruise that we saw in the 2018 storage crop. While many growers have been totally shocked at the low percentage of their potatoes that have been scored as bruise free, many others have seen numbers equal to or higher than their historical average. After seven months of grower storage deliveries, the weighted average bruise-free score is 8.2 percent from the 2017 crop and a massive 12.4 percent from the five-year historical average. To put that into economic terms, the weighted average bruise-free incentive across the processors we deliver to is 73 cents per ton.

Our members deliver more than 1 million tons of grower storage potatoes, so that 12.4 percent reduction has cost them $9,052,000. As I mentioned before, not all growers had dips from their historical average, so that reduction has fallen on the hands of only about 12 to 13 growers. Of course, those growers are screaming for major changes to the bruise-free language in our contracts. I can completely understand where they are coming from and can sympathize with the financial hit they have incurred this year. However, it becomes very hard to address this issue in the contracts when we cannot definitively determine what led to the reduced numbers. All growers pretty much have a standard system that they use to harvest and handle the potatoes. Most growers have not changed the equipment that they use nor the operators who run the equipment. If all things are the same as usual, why was 2018 different? The two most common assumptions being made were that the potatoes were being graded differently or the definition of a bruise had somehow changed over the years. I believe that the intense scrutiny that we have put the grading services through has mostly laid to rest the assumption that errors were being made in the grading of the potatoes. After all, if the grading was being done differently or incorrectly, all of the growers – not just some – would be seeing lower percentages this year. The idea that the definition of a bruise has changed was an easy one to address. The definition in the contracts has not changed in nearly 20 years. The definition that has been used by USDA graders and adopted by Ag World has also not changed in even more years. So the answer has to come back to an environmental cause. Speculations include the stress the plants were under due to the heat and smoke that we experienced in the latter part of the season. But again, whywhy did itnot not affect When you put your hard earned money downgrowing for a new potato trailer, put iteveryone? Others speculate that it has to do with the moisture level of the soil and down on one that will work as hard as you? Western potato trailers deliver on average subsequently the tubers at harvest time. No one has any definitive 2000lbs more that the competition. Couple that the resale values thegood results and datawith on this, buthighest the growers who had somein very industry and you can’t go wrong. some very bad results say that the fields that were the wettest had the highest bruise-free and their low numbers were on Learn more at www.westerntrailer.com or callnumbers, 888.344.2539 their dry fields. While no one can pinpoint the exact cause of the bruise situation from last year, the one thing I do know is that the high level of talk and concern over this issue has reinforced the idea that we need to make some tweaks to the contracts. Are the processors Building the best and making it better…your way! going to allow more bruises going forward? Not a chance. When you put your hard earned money down for a new potato trailer, why not put it But we do have an opportunity to lessen the financial impact down on one thatthe will work hard as you? Western potato trailers deliver on average Building bestas and making it better…your way! 2000lbs more that the competition. Couple that with the highest resale values in the of some of the lighter bruises and take into account the size of When hard earned money down for a new potato industry andyou youput can’tyour go wrong. the potato so that a tiny bruise on a 20-ounce potato doesn’t cost trailer, it down on one that will work hard as you? Learn why morenot at put www.westerntrailer.com or callas888.344.2539 the grower four times the amount of money as a big bruise on a Western potato trailers deliver on average 2000lbs more that the 5-ounce potato. competition. Couple that with the highest resale values in the With emotions running as high as they are on this topic, you industry and you can’t go wrong. can be assured that this will be one of our top priorities when we get the chance to sit down with the processors to negotiate our Learn more at www.westerntrailer.com or call 888.344.2539 2020 potato contracts.

Building the best and making it better…your way!

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TESTING/CONSUlTING

MISCEllANEOUS

Ag World

The Potato Podcast

Stukenholtz


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