(Sept. 25, 2:30 p.m.) Promises of good-quality product and strong markets for their potatoes had Red River Valley grower-shippers in an upbeat mood as the new crop got under way in early September. But few companies anticipated a worry-free season.
Trucks to get potatoes to market once again could be in short supply, and freight costs were making many shippers jittery.
“I think the truck supply is going to be a little tight,” said Cory Seim, general manager for Northern Valley Growers LLC, Hoople, N.D.
Every year, trucks seem to be more difficult to come by as independent drivers faced with mounting costs throw in the towel, and larger trucking companies cut back on the number of vehicles they have on the road, he said.
As usual, finding trucks to deliver product around Labor Day was difficult this year, and Paul Dolan, general manager at Associated Potato Growers Inc., Grand Forks, N.D., said supplies could remain tight — or maybe not.
“I hope there will be ample supplies, but we never know for sure,” he said.
Last year, sufficient transportation was available, albeit at high prices.
“Our big concern is transportation,” said Ron Norman, director of operations for Ryan Potato Co., East Grand Forks, Minn.
Truckers don’t like to follow the potato deal as it moves north because the weather is simply too cold, Norman said.
“We’re struggling during the winter,” he said.
Whether a sufficient number of trucks will be available depends to an extent on the state of the U.S. economy, said Bryan Folson, president of Folson Farm Corp. in East Grand Forks.
If the economy is strong enough, there’s a good chance that trucks will be able to pick up a back haul, which could make the return trip to the valley worthwhile.
Although higher fuel costs have received much of the blame for the trucking industry’s woes, Tom Campbell, an owner and sales manager for Tri-Campbell Farms, Grafton, N.D., said oil prices are only indirectly to blame.
Tri-Campbell operates its own trucking company, and Campbell said the firm generally has been able to recoup higher fuel costs by passing on the expense to customers in the form of a fuel surcharge.
“We have to,” he said.
But surcharge doesn’t cover the trip back, he said, and it’s the lack of back hauls and more “deadhead” miles caused by the economic downturn that are the bigger culprit.
“The fuel prices haven’t been the big killer, it’s the recession that has put a lot of trucking companies out of business,” he said.
During a recessionary period, if there’s 10% to 15% fewer loads, the demand is less for trucks so drivers end up deadheading hundreds of miles to get to a load.
Dolan agreed, saying that finding enough product to bring back to the area from as far away as Florida can be a challenge.
Much can depend on the time of the season and whether produce is available to be moved, he said.
Folson was fairly optimistic after Hurricane Gustav failed to cause much damage to offshore oil rigs in the Gulf of Mexico around Labor Day, and oil prices briefly slid under $100 a barrel.
“It might work itself out,” he said.