The new crop | Using high-tech tools or cracking new markets, Maine potato farmers get innovative to get ahead

If there is a stereotype that exists of the Aroostook County potato farmer, it might go something like this: An older man with a wrinkled, sun-tanned face, riding a tractor while wearing a beat-up John Deere hat and dusty overalls. When it’s harvest time he rounds up the local school children who dig potatoes from the neat hill rows and fill wooden barrels scattered throughout the potato fields with tubers.

Of course, if this is how you envision the modern potato farmer from northern Maine, you’d be dead wrong. Fact is the potato industry in Aroostook County has changed. “It is much, much more sophisticated than people realize,” says Tim Hobbs, director of development at the Maine Potato Board.

Take Daniel Corey, who owns a 600-acre potato farm in Monticello. On a recent morning, Corey wears a blue short-sleeve, button-down shirt with a pair of sunglasses tucked into the top button. His shirt is tucked into jeans, a BlackBerry sitting snuggly on one side of his belt and a cell phone on the other. He hasn’t ridden a tractor in years. “Do I miss it? Yes, but I’m in management now,” he says, standing in the driveway of his home down the street from Daniel Corey Farms. “My time is more valuable managing my BlackBerry than managing a tractor.”

Not riding a tractor for 10 hours a day left him time last year to work out deals to export 165 tons of seed potatoes to Brazil, making him the first U.S. potato farmer to export seed potatoes — which are used not for eating but to propagate new crops — to that country. Last year, he also became the first potato farmer in Maine to export seed potatoes to Uruguay. Now he’s sending test shipments to Sri Lanka and the Dominican Republic and has received inquiries from around the world, including Thailand, Lebanon and Egypt. Finding new markets for his product helped him stay out of the red last year, when supply in the domestic market outpaced demand. This year, however, Corey’s betting supply and demand will swing in opposite directions as farmers cut back on their crops. “We’re not sitting still here,” he says.

As Maine potato farmers watch their profit margins continue to shrink as costs for everything from fertilizer to diesel fuel escalate, farmers like Corey are finding ways to cut expenses and improve efficiencies, whether that means finding new markets to exploit or investing in new, high-tech systems to streamline operations.

There are nearly 400 potato farmers in the state, from Aroostook County to western Maine. The industry supports more than 6,100 jobs in the state and has a direct economic impact of roughly $293 million, according to the Maine Potato Board.

Between 1928 and 1958, Aroostook County alone produced more potatoes than any state in the nation. Since then, though, most of Aroostook County’s small family potato farms have disappeared as the industry has gone global and become increasingly competitive. Conversely, the farms that remain have grown steadily as the land is consolidated in fewer hands. Where two decades ago a farmer could support a family on a 200-acre plot, today it takes closer to 700 acres, says Darrell McCrum, who co-owns County Super Spuds, which harvests 3,500 acres of potatoes in Mars Hill. “The margins are getting smaller and the risks are getting higher,” McCrum says. “You really need to understand the markets you’re supplying and the input costs you’re putting into your crop.”

In a business as capital intensive as farming, the farmers that remain in the business need to be better at managing cash flow than managing a tractor. “The ones that are left are pretty sharp operators,” Corey says. “They’ve seen some rough times and they are still here. That says a lot.”

The export business

Corey’s 2007 entrance into the international potato market came at a serendipitous time. As the global prices for food commodities like rice, corn and wheat have shot skyward, the price of potatoes has remained fairly steady.

And the popularity of potatoes has steadily risen in the countries Corey now targets. Since the 1990s, potato production in Africa, Asia and Latin America has expanded dramatically — from less than 80 million metric tons in 1990 to a record 161.5 million metric tons in 2005, according to the Food and Agriculture Organiza­tion of the United Nations. Since those countries don’t have ideal potato-growing climates, they usually need to buy their seed potatoes from other sources. Enter farmers like Corey, who sits on the U.S. Potato Board’s export committee. Besides growing seed potatoes, he also is a partner in a seed tissue generation facility in Island Falls that includes a lab that develops new potato varieties, some of which are more tolerant to hot climates.

Last year, Maine potato farmers harvested more than 58,000 tons of seed potatoes, the majority of which were sold to farmers in Florida, North Carolina, New York and other states along the eastern seaboard, as well as roughly 5% to Canada. Before last year, the only international exporting Corey had done was to Can­ada. Through the export committee, he discovered that countries such as Uruguay and Brazil were eager for sources of seed potatoes and had been looking to Canada as their prime source. Corey pitched Maine seed po­­ta­­toes to the two countries and, after moun­­tains of paper­­work and no small amount of time spent on his BlackBerry, he set up deals to export 165 metric tons of the At­­lantic variety of seed po­­­­tatoes to Brazil and 25 metric tons to Uruguay.

The weak U.S. dollar is one reason Corey says Maine’s potato farmers are being considered, and he says the response from the countries has been second to none. “Regard­less of demand, you have to have a quality product to keep customers coming back,” Corey says. “And Maine does appear to have a quality product — even after a three-week boat ride.”

The seed potato market has been steadily declining for the past 15 years, and last year was particularly bad for seed potatoes on the domestic market, Corey says. His international shipments, however, turned a potentially tough year into a profitable year. While he charged roughly $1,200 an acre for the Atlantic variety in the domestic market, he received roughly $3,500 for an acre of that variety from Uruguay and Brazil. “Every load I sent to Brazil, I made a profit,” he says. “Every load I sold here, I took a loss.”

The demand from Brazil was so great Corey had to buy seed potatoes from two other Aroostook County farmers and was able to offer them more than twice the amount they were getting for their potatoes in the domestic market. As long as it remains profitable, international markets offer a viable option for Maine seed potato farmers. “This is what Maine needs here. We need a break,” Corey says. “If we can supply good product, they don’t mind paying for it.”

Brazil has remained an untapped market, Corey says, because some farmers have had bad experiences with international exports and Brazil was seen as a problematic export partner. But Corey says he had a good experience with Brazil, though his dealings with Uruguay could have been better. “Has the export thing gone blemish free? No. Am I better exporter now? No question. I paid a little tuition last year,” Corey says with a laugh.

And now that he knows how to navigate the piles of paperwork and potential hurdles that might trip up a less experienced exporter, Corey plans to continue exporting to foreign markets and act as a broker to help other Aroostook County farmers benefit, as well. “We just opened the door,” he says. “Brazil is a big country. I don’t know where the demand could end.”

Spuds.com

Jim Gerritsen, along with his family, runs Wood Prairie Farm, a relatively small organic farm in Bridgewater. Gerritsen farms roughly 55 acres, but because of a four-year rotation cycle he only plants 11 acres a year. It’s a small fry in comparison to an operation like Corey’s or County Super Spuds, but Gerritsen says he likes it this way and has carved out a profitable niche supplying organic seed potatoes of heirloom varieties. And he’s done so using the Internet.

He began selling organic seed potatoes 20 years ago and had a mail order catalogue, which served him fine for the first 12 years. Eight years ago he launched his first website and since then sales have doubled to over $500,000, he says.

Today, 60% of Gerritsen’s sales happen online. “There’s a lot of changes going on and you have to change with the times,” Gerritsen says. “It keeps you on your toes. There’s no standing still. Even in potato farming you have to keep up with that change.”

County Super Spuds, which owns nearly 6,000 acres of potato fields, 3,500 acres of which is planted with potatoes in any given year, is the largest potato farm in Maine. The company, which also includes Penobscot Frozen Foods in Belfast, has revenue of between $35 million and $40 million a year, according to McCrum, 33, who owns the business along with his brother, father and two uncles. He says the business has grown between 11% and 18% a year for several years. “Without the new technology we have now, I don’t think we’d be able to sustain our growth over the past 10 years,” says McCrum.

After testing the technology for a few years, the company in 2006 started using GPS to guide their tractors, McCrum says. The new technology resulted in straighter lines in the fields and a better crop. Before using GPS, McCrum says roughly 9% of the harvest was culled because of sunburn, often because the cultivator would pass along the rows and uncover potatoes, exposing them to the summer sun. That happened either because the rows weren’t straight or the driver wasn’t keeping to the rows. After installing GPS, the share of sunburned potatoes culled dropped to 3%, he says. “That returns 6% to our bottom line without adding any cost to the system.”

New technology also has allowed County Super Spuds to save on labor costs. In 1999 it bought two $600,000 harvesters that only take one person to operate and can harvest 20 rows of potatoes at a time, decreasing significantly the number of passes it needs to take to cover the fields. Even though the harvesters are only used four weeks a year, McCrum says the cost spread over a per-acre basis was well worth the investment. Whereas before the farm employed roughly 150 people during the harvest season, this year the farm will employ around 60 for the same job.

Last year, the company also purchased a grader for its washing facility that automatically, using digital imaging technology, culls the green sunburned potatoes or black rotten potatoes. The grader replaced 12 em­­ployees. When asked if he’s seen a reduction in costs because of the new piece of machinery, McCrum smiles and gestures to the grader. “What we noticed is no one’s here working. This shows up every morning and doesn’t complain.”

Like any business that faces stiff competition from home and abroad, potato farmers in Maine are discovering that constant reinvestment in their business is necessary to survive — whether it’s a small organic farmer like Gerritsen investing $4,000 in a tower to provide his business with high-speed Internet or the McCrum family investing more than half a million dollars in a state-of-the-art harvester.

Back in Monticello, the potato plants are in blossom and Corey predicts it will be a good year for potatoes, despite the heavy rainfall. Because of the increased demand he’s expecting from new markets, and an inkling that things are going to swing the other way after last year’s poor potato market, Corey is investing more than $1 million in his operation, including purchasing another 100 acres of land and spending $400,000 to build new storage buildings, which will allow Corey to monitor the temperature in his piles of potatoes during the middle of winter from a laptop in Uruguay. But given last year’s poor market, Corey says a lot of farmers are reining in their spending. “I’m bullish when everyone else is pulling in their horns,” he says. “I’m on the charge.”

Whit Richardson, Mainebiz staff writer, can be reached at wrichardson@mainebiz.biz.