State experiments with increasing flexibility for packers

By DAVE WILKINS

Capital Press

Federal regulations affecting fresh russet potatoes in Washington state have been temporarily suspended in a move to reduce packing costs.

The suspension of russet packing regulations took effect on July 24 and is scheduled to remain in effect until June 30, 2011.

The experiment could become permanent if growers in the state see no benefit in bringing federal regulations back.

With the change, USDA inspections of fresh russet spuds are no longer required in Washington state. Packing sheds may ship russets without regard to the minimum quality and size requirements prescribed under the Washington potato marketing order.

The change was initiated by the State of Washington Potato Committee, a group of growers and handlers that administers federal marketing order No. 946.

Suspension of fresh-pack regulations gives shed owners more flexibility in deciding whether to have USDA inspections and when to schedule them, committee manager Matt Harris said.

Packers will continue to use federal inspectors whenever buyers request it, he said. But shed owners will be able to schedule those inspections during regular business hours and won't get stuck paying overtime to federal inspectors.

Under the old mandatory rule, USDA inspectors had to be on site anytime that a shed was packing spuds.

"If your shed was running at 6 in the morning or 7 at night you had to have a USDA inspector there and pay overtime," Harris said in an interview.

"Quite a few handlers will continue to have inspections, but they will have it on their time schedule," he said. "It gives them more flexibility."

The elimination of mandatory inspections is expected to reduce overall operating expenses for grower-shippers in the state.

About 7.8 million hundredweight of Washington russet potatoes were inspected during the 2008-09 season. At a cost of 7 cents per hundredweight, the inspections cost packing sheds a total of $546,000.

Federal regulations will resume for Washington russets on June 30 unless the committee takes action to extend the suspension or make it permanent.

The committee will meet this winter to assess the program, Harris said.

The elimination of federal packing regulations in Washington may not have as much impact as it might in some potato states. Only about 13 percent of Washington's spud crop is sold on the fresh market. About 87 percent is sold to processors for french fries, hash browns and other frozen potato products.

The state potato committee started discussing a possible suspension of handling and inspection regulations in January. A subcommittee met on May 11 to consider the implications.

Some concerns were expressed then that elimination of quality requirements could result in the shipment of low-quality spuds.

Potatoes packed without a USDA inspection are not permitted to carry the U.S. No. 1 grade label.

According to a notice in the Federal Register, "there is some concern that overall quality of the product may decline, and that the Washington potato industry could lose russet potato sales to production areas that are covered by quality and inspection requirements."

But the consensus among committee members was that suspension of federal regulations in Washington would have minimal impact, Harris said.

Ultimately, it's the marketplace that determines packing quality, not government regulation, he said.

"If the person you're selling to doesn't like the quality of what you're packing, you're going to make some changes," he said. "You're going to find a way to pack to that quality."

Idaho and Colorado are now the only states with mandatory federal handling and inspection requirements for russet potatoes.

Industry officials in Idaho said the regulations remain an important guarantee of quality and there are no plans to discontinue them.