High fuel costs come with a silver lining for Wisconsin potato grower-shippers

07/15/2011 11:43:00 AM
Tara Schupner

High input costs are taking a toll on Wisconsin potato grower-shippers, though many say high fuel costs give the state an advantage over its Western competitors.

Mike Carter, chief executive officer for Rosholt, Wis.-based Bushmans’ Inc. said high fuel, crop protectant and other petroleum-based prices would continue to weigh heavily on growers this upcoming season.

For Wisconsin shippers, however, there is a silver lining.

“It adds dollars to the bottom line, but our proximity to markets does give us an advantage” over Western growers,” Carter said. “But nobody likes to see it (the cost of fuel) this high.”

That competitive advantage allows Wisconsin shippers to charge more for their potatoes than shippers from other regions, said Bob Johnson, president of Katz Produce Sales LLC, Plover, Wis.

“The whole crop moves west to east, and we’re further east than Idaho, Washington or Colorado, so we’re able to carry higher f.o.b.s,” he said.

Michigan and Ohio are farther east still, but they don’t have the acreage and volume Wisconsin has, Johnson said.

That said, input costs still take their toll on Badger State growers, Johnson said.

“The price to produce the crop in the ground is now the highest ever, and more than likely, it will be higher next year,” he said. “Nothing has gone down. Fuel prices are still dramatically higher than a year ago, seed’s higher. Fertilizer prices have really gone ballistic.”

Price hikes have been most dramatic in three categories: diesel, fertilizer and land prices, said Larry Alsum, president and general manager of Friesland, Wis.-based Alsum Farms & Produce Inc.

However, Alsum agrees that high fuel prices do open a door for Wisconsin shippers when it comes to proximity to markets.

“We definitely try to take advantage of that,” he said.

Nobody likes to see high fuel costs, said Tom Lundgren, owner and president of Stevens Point, Wis.-based Spud City Sales LLC.

But a bonus, he said, is that the price hasn’t changed much in recent months.

“We haven’t had an issue with trucking,” he said. “Fuel has stayed somewhat steady.”



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