Wednesday, January 30, 2008

Ag Summit Notes

Albert Wada Receives the Ag Summit Governors Award for Marketing Innovation


(GARDEN CITY) In the produce department at the Wal-Mart in Garden City, shoppers gather in the produce section. They’re looking at the ‘baby potatoes’ in the microwave bag, ‘Look, they’re ready to go, no washing, nothin,’ said the 30-something shopper to his wife. He dropped the mini spuds in the shopping cart.

Albert Wada of Pingree has done it again. The head of Wada Farms knows that people are busy and spending less time in the kitchen, so he’s marketing microwavable spuds, “This may be a solution for today’s time-starved consumers,” he says.

The colorful bags catch the eye, “It’s a one and-a-half pound gourmet, petite size yellow, red or russet potato,” said Wada. “And it’s ready to steam in the bag, you end up with is a potato that’s quartered and buttered right and ready to go.”

Wada is known for fearlessly chasing ideas to keep up with consumers, “We’ve had missteps and mistakes in judgment, over expansion or weather situations that caught up with us, but things work out,” he says with a twinkle in his eye. Wada farms more than 30-thousand acres of irrigated spuds.

The farmer’s diligent monitoring of the marketplace and consumers has transformed Wada Farms into an Industry giant and this years Governor’s award winner for Marketing Innovation.

Wada has a long history of thinking ahead not only on the consumer side of things, but the production side as well. He’s watched the rise and fall of potato fortunes for more than four decades, he says through the years farmers at times were their own worse enemies.

“We worked ourselves into a chronic over production situation,” said Wada. “We were raising more and better potatoes every year and the marketplace couldn’t accept that. Quite honestly supply and demand couldn’t accept that volume without selling at lower prices and it took a serious toll.”

Idaho Farmers had operated with the assumption that free enterprise, hard work and good weather would get them through the hard times. But the globalization of the market made farming even harder.

Enter the North American Free Trade Agreement and suddenly the U.S. borders were open to the world, Canadian French fries started flooding the market and U.S. spud prices plummeted. To make matters worse in 2003 Canadians opened a large French-fry plant of their own, forcing the closure of the Burley plant and soon the United States was importing fries with Idaho farmers stuck with a huge surplus.

“Because of the magnitude of the losses we were surrendering huge amounts of money to this over production and getting half of the cost of production for a hundred weight of potatoes,” recalled Wada. “When you do that for more than a year or two you hemorrhage money and farm yourself out of equity. Wada set out to address the problem by managing the supply of fresh potatoes.

Albert Wada was the perfect person for the job, when the confident, soft spoken man speaks people listen.

He helped found United Fresh Potato Growers of Idaho in late 2003, and then worked at getting the attention of the nation’s other potato producers. He set out to unite as many growers as he could with the ultimate goal of ‘rationalizing the industry’ by fitting production to the market.

The next year at a National Potato Council meeting in Washington, D.C. Wada took it a step further and was the driving force behind the formation of the United Fresh Potato Growers of America an umbrella organization overseeing state co-ops. United immediately started monitoring the potato market and encouraged farmers to limit production to keep prices up.

“If you told me five years ago that I’d be involved in a cooperative movement the way I am currently, I probably would have given you a real dirty look, but the bottom line is that everything changes,” said Wada who started meeting with farmers stressing that the co-op preserved and promoted farmer independence. Under the plan farmers were still able to call their own shots, selling to anyone, on their own terms.

Wada told producers as long as prices stayed above the trigger point, the co-op would stay out of the picture. When it’s time to reduce supply, growers are free to take part in the buyout of acreage or crops and farmers with obligations were free to meet them. The market turned around but it’s a fragile, year to year proposition.The cooperative philosophy makes sense,” adds Wada. “It’s really unfortunate that more of the farming community can’t latch onto that and come together with enough effective critical mass to make a difference. We were able to do that at a relatively high degree because so many of us were in the same boat.”

“The cooperative model is the best chance, the best tool we have to manage our own economics,” said Wada.

At Wada Farms in Pingree everything is painted red, when asked about the color theme Wada chuckled. “When I get profitable with more assets than debt we’ll paint everything black; As long as I’m in the red, everything will stay red.”

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