‘BLINDSIDED’: Global shifts in snacking industry affect St. Johns County’s potato growers

Local farmers have long been at the mercy of such unknowns as the weather, the whims of giant food conglomerates, and shifts in people’s perceptions of what’s healthy or trendy to eat. For these reasons and others, risk is built into this way of life.

 

But not much can prepare you for losing 40 percent of your business for the year in two swings of the corporate scythe — just weeks before you’re set to start planting.

Prim Parker, an Elkton farmer who’s been growing potatoes alongside his family for 35 years, says potatoes are all he grows.

This became a problem when, shortly after Thanksgiving, two big snack-makers significantly reduced or eliminated their contracts for 2018 with local growers for chipping potatoes.

Snyders’-Lance, whose chip products include Cape Cod and Kettle Chips, pulled out 100 percent of its business in the area and much of its business throughout the Southeast. On the heels of that loss, Frito-Lay came to Parker with news it would be cutting its contract volume by 15 percent.

“It was like, ‘What a Christmas we got going here,’” Parker said, facing the prospect of well over 100 acres of his nearly 400 acres for potatoes sitting idle this year.

Parker’s farm also grows some table stock and creaming potatoes for a fresh market company in Canada, but that accounts for just a sliver of his overall business compared to the long-standing arrangements with the much-larger chippers.

Not only was the news bad, it was too late in the game to turn around and do anything else. Parker said had there been just a little more notice he could’ve looked at moving some acreage over to the Canadian company.

“We got blindsided,” he said.

St. Johns County Commissioner Jeb Smith, a Hastings farmer, said Parker isn’t alone. Many potato growers in the area are facing significant reductions in their business with little time or ability to pivot to another buyer or another crop altogether.

While he’s heard about some farmers considering planting corn, he said corn doesn’t cost more than 20 to 25 percent of what potatoes cost.

“There’s not nearly the return,” Smith said. “You’d have to do way more acreage to make your money back because it’s just a lot less intensive of a crop.”

The effect of the reductions doesn’t stop with the farmer. He and Parker said less potatoes means less fuel purchased, less parts ordered, less equipment needing repairs, less labor needed and all the rest.

“Farmers just aren’t spending their money this year,” Parker said. “It’s a domino effect.”

Too risky, too expensive

On the farming end of the potato industry, nothing’s done on speculation. Big growers set up their contracts with big buyers ahead of time and plant accordingly.

“It’s just too risky and too expensive to plant market potatoes and hope that you can find a home for them,” Parker said. “If you don’t have a home for them and you can’t sell them, you have to eat them yourself.”

He said any growers in the area are “absolutely” dependent on large, outside buyers, because that’s where the volume is and that’s how you make your money back.

According to Parker, Snyder’s-Lance had made some management changes that resulted in a shift toward using stored potatoes in the Midwest rather than fresh market potatoes from the Southeast. Snyder’s-Lance, one of the largest salty snack-makers in the country, has since been sold to Campbell Soup for nearly $5 billion, in a deal dubbed the largest in the soup company’s history.

Parker said the reality is Florida potatoes are the most expensive in the country, at least for chipping, because of the amount of risk involved. To illustrate, he said Florida growers can expect well above 50 inches of rain a year, working with lower quality soil, whereas farmers in other parts of the country are looking at more like 20 inches, working with much richer soil.

“We’re not able to grow the tonnages they’re able to grow in the northern states just because of climatic conditions and soil type,” he said. “It’s not like we’re just sitting down here making a billion dollars — what we’re charging them is just enough to make a fair profit and keep our heads above water.”

However, as Smith said, Florida has a “special and unique” harvest window, which can work to the advantage or disadvantage of the grower, depending on circumstances that are pretty much out of their control.

Parker said Frito-Lay found itself in a place where there was too much product in the supply chain and the company had no choice but to push growers later into their harvest windows.

“It is what it is,” he said. “You just have to tighten your belt and weather the storm.”

He said while Frito-Lay has told him what they cut should come back next year, he has to assume the business from Snyder’s-Lance that was entirely cut isn’t coming back.

No small potatoes

Hastings’ status as “Potato Capital of Florida” was hard-earned. The challenges of maintaining this title have been plenty, but so have the rewards, when they come. Basically, it’s not a business for the faint of heart.

Smith said global circumstances can affect everything down the line, for better or worse.

Simple changes in demographics over time can bring entirely different perspectives on food consumption, he said. Some major markets have drifted from Wavy Lay’s toward Fritos and Doritos.

“You’re seeing a transition,” Smith said. “It’s been slow, but the population changes. There’s a little more Latino, Hispanic influence. And it’s cheaper doing corn products than potato products.”

This isn’t the first fall from grace the potato has suffered, even in recent memory. The Atkins Diet, a low-carbohydrate fad diet that peaked in popularity in the early 2000s, also did a number on the industry.

Overall, the area’s potato output is down over the past two decades.

Smith and Parker said there’s less than half the acreage in the tri-county area dedicated to potatoes that there was in 1995. They said about 35,000 acres have been whittled down to 17,000 acres — and that some estimates go even lower than that.

Smith, who used to grow potatoes for a small chipper in northern Pennsylvania, got out of the industry shortly after that business’s shelf space got gobbled up by some of the larger snack companies.

Contracts with other buyers weren’t big enough for him to justify the fixed costs of doing business.

“We sold our potato equipment and got out of it,” Smith said. “We just could not get enough contract volume to justify the risk.”

Best foot forward

In the meantime, what’s left of the show must go on.

Parker said planting begins this week, on schedule, but on a smaller scale.

A 6- or 7-week harvest window from late April to the middle of June should still yield nearly 275,000 100-pound bags of potatoes, Parker says. That’s about 600 semi-trucks worth of product.

To put this in perspective, Smith said every 100 pounds of potatoes yields about 28 pounds of potato chips. Meanwhile, most family-size bags of chips come in well under a pound.

For Parker, once the last of those potato-hauling trucks leaves, that’s all the business for the year. One pay day.

“That’s our Friday,” Parker said. “I hear people say, ‘I can’t wait for Friday,’ and I’m like, ‘I can’t wait for June.’”

The rest of the year is dedicated to maintenance of equipment, making repairs and tending to the land. There’s a lot of budgeting, planning and hoping for the best, too.

“It’s been fun and it’s been challenging,” Parker said. “I don’t gamble, I just farm. That’s my addiction, is farming.”

 

More