Union workers who build farm equipment just ratified a new contract. In their negotiations, striking workers got an $8,500 bonus to come back to work. They got an immediate 10% raise with two 5% raises and two more large bonuses soon to follow. Retirement benefits were increased by $270,000 per employee. The deal also increases base pay for an internal program by 4%. Nothing of this magnitude has ever happened before in farm equipment labor negotiations. Do labor unions know something about the upcoming economy that potato producers do not?
The manufacturer’s willingness to agree to the union’s terms was based upon critical forecasting. In that forecasting, while more total equipment may be sold, the biggest factor in producing enough more dollars to meet the new contract’s terms is that it is going to take a greater number of devalued dollars to purchase the equipment that the workers produce. Here’s the bad news for the union workers: All they have gained and more will be needed to cover their rising costs of living. When the dust settles, the union workers will find themselves in the same economic spot they are in today. This is how inflation works. The difference between this inflation cycle and any other that the U.S. has witnessed is that this one will likely be bigger on an average annual basis and last longer.
Together, potato producers can gather, analyze and react to market data. Only by this process can supply be matched to demand to achieve fair prices.
As you are aware, unions are striking everywhere. They are striking now, at the beginning of this inflation cycle, to get ahead of it or at least to keep up with it. As a potato producer, you have no union to represent you in keeping you abreast of upward-spiraling production costs. Without that representation, how do you plan to get fair value for the crop to be planted? To assume that you, as a producer, can meet these rising costs with yesterday’s pricing is to invite disaster. So, how can you assure fair pricing so that disaster does not happen? Think about the union example. A single worker lobbying for a raise gets nowhere, but workers acting together make it happen. Together, potato producers can gather, analyze and react to market data. Only by this process can supply be matched to demand such that fair pricing results.
United Potato Growers of America is not a newcomer when it comes to facing a tough situation. UPGA knows how to guide potato producers legally and safely through these uncertain times. Do not make the mistake of thinking that you, as a single entity, can know what to do. Certain shipping entities profit because they sit beneath the umbrella of others that know what they are doing. Free riders happen. Arrogance and cynicism happen. If you are in a region that cares nothing about balancing the supply/demand equation, you’d better pay attention.
Good business managers are neither arrogant nor cynical; they are realists. Good business managers know their market, and they know how to fit their crop into it to assure fair value. UPGA has the data to make that happen.