Growers cooperative warily eyes Technology Crops International
By MATEUSZ PERKOWSKI
Oregon's niche meadowfoam industry is apparently getting more crowded.
The state's industry has long been dominated by the OMG Meadowfoam Oil Seed Growers Cooperative, but another company has now reportedly entered the market.
Technology Crops International, based in Winston-Salem, N.C., is reportedly contracting with farmers in Oregon's Willamette Valley to produce the oilseed, which is primarily used as a cosmetics ingredient.
The company's president and CEO, Andrew Hebard, could not be reached for comment, but the firm's website lists meadowfoam as one of the crops offered by TCI.
Jerry Hatteberg, executive director of the growers cooperative, said he has spoken with Hebard, who indicated TCI would focus on pharmaceutical uses for the crop rather than compete for cosmetics customers.
However, Hatteberg said he is "not convinced that's the case," since the cooperative would likely be aware of alternative markets for the oilseed.
"We're basically the only commercial source worldwide," he said.
The growers cooperative isn't a stranger to competition, albeit from different crops, said Mike Martinez, vice president of the organization's marketing arm, National Plant Products, Inc.
Oils from plantains, avocados, macadamia nuts, shea seeds and jojoba seeds are also used in cosmetics, he said.
In 2010, the cooperative has contracted with farmers to grow about 3,800 acres of meadowfoam, Martinez said. Based on observed fields, TCI has probably contracted for 500 acres to 1,000 acres, he said.
Martinez said TCI appears to have begun contracting with farmers last year, but he isn't aware of the company selling the oil.
"I have not seen them in our primary marketplace yet," he said.
The cooperative sees itself as having multiple advantages in processing, storing and marketing the oilseed, Martinez said.
"Anybody can try to poach business. Until we see actual moves in the marketplace we're not taking too many reactive steps," he said.
The cooperative has had unpleasant experiences with overproduction in the past, according to prior reports in Capital Press.
After a major buyer defaulted on contracts in the late 1990s, the surplus inventory caused delayed payments to farmers and suspended crop production for several years.
The cooperative was able to work through its inventories, pay farmers and resume field production in 2006.