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With 'so-so' November, Associated’s Dolan expects improvements

by Tad Thompson | December 06, 2010
"Movement is just so-so," Paul Dolan said of the Red River Valley potato deal on Nov. 16. “It's not as brisk as we hoped it would be for Thanksgiving.”

Speaking from his Grand Forks, ND, office, where he is manager of Associated Potato Growers Inc., Mr. Dolan indicated, “Markets are holding but the demand is so-so. And the truck situation is really tight. It hasn’t been this bad in five years for trucks, so transportation is causing some of the lack of movement, as well.”

The volume this year for Associated Growers is down “probably 10 percent” compared to 2009. “Quality and appearance I think are good, from what I’ve seen. Our size profile is a marketable profile. We have not had an overabundance of Bs or premiums. It is a nice size profile for marketing.”

As to lackluster movement two weeks before Thanksgiving, Mr. Dolan said, “There has been every heavy movement on the russet side, which probably has something to do with it. The market” for Red River Valley red potatoes “is at a good value, priced good to our side, which may have slowed demand. It is a combination of demand and transportation. Combined, that has caused a lack of movement. It is not terrible but not as good as we hoped at this time.”

Mr. Dolan expects the market situation to improve. “We will be OK going into spring. Our volume is down a little so a lack of movement now isn’t hurting us that much. Things are storing well in storage.” The Red River Valley reds “all went into storage at nice cool temperatures. That helps in the long run.”

Red potatoes and yellows, which make about five percent of the valley’s fresh mix, will enjoy “a good marketing year. Other areas of the country are down on red production. I know that upper Washington and Canada have had issues with potatoes this year and Wisconsin reds are down somewhat. As a whole we (in the Red River Valley) are about the same as last year. Associated is down a little from last year.” But the various components mean “that all should be a good marketing year.”

At Associated, “We continue to push a premium size, which is larger than an A size.” This is a red potato measuring between three and 3.5 inches, which “we are trying to get in the grocery stores a little more than in the past. We are struggling with that a little.” The larger size is “down in quantity this year versus last, so that will help. As a red area we need to get out and tell people that the red is very good for baking. A lot of consumers aren’t aware of that.”

Associated now has an “Odenberg” potato grader in each of its two North Dakota packinghouses. In Drayton, which just received the newest grader, “We did some changing in the line up there to have a better flow with the 'Odenberg’ in place. We are very happy with way that turned out. The benefit is a grader that will help us be able to do more hundredweight in a shorter period of time, if we need to, and cut employees down a little bit. That makes us a leaner machine and we will be able to give our customers a more consistent quality, too.” He said some people will still be used in the grading process but “they will do fine-tuning, rather than be involved in initial grading.”

Mr. Dolan said, “We are always striving to do more packaging. We are doing more of the combo bag than in the past.” The combo bag is a combination of half-mesh and half-poly. Eighty percent or more of Associated’s packaging is for private label. “That has become the trend in the industry. So it really doesn’t allow us to introduce a lot of new bags when the receivers are looking to have you pack in their private label.”

Concerning this fall’s truck shortage, Mr. Dolan was asked about North Dakota truckers being reputed for leaving the road to hunt deer in November. That might explain some of the transportation void but “trucks were very tight even before deer season,” he observed. “There has been a lot going on. There is a big turkey movement here that affects trucks” before Thanksgiving. Deer hunting does play a factor and “I think there are a little less trucks on the road.” It is early enough in the fall that truckers are still occupied carrying gravel and road construction equipment. “It all plays an effect. It has not been this tight for a number of years.”