January 2021 - 47

Mastering the supply chain means
mastering the money
The owner of a
UNITED POTATO
GROWERS OF
AMERICA
Buzz Shahan
Chief Operating
Officer
New York City grocery
chain remarked, " I
could never do what
many potato farmers
do, put significant
equity into a potato
crop without having
control over what it
will be worth when
it comes time to
sell it. I know what
every can of peaches
costs me, and I
precisely control what it will sell for. I don't
understand a kind of thinking that overlooks
this fundamental business element. It
makes no sense to me. What kind of person
does that? Where did that person learn
business economics, anyway? "
By the way, this gentleman's wife owns
a large Hunts Point produce distribution
center. So, he knows firsthand how the deal
works due to the countless rail cars arriving
at her rail siding every year loaded with
unpriced potatoes.
Whichever graduate school one chooses for
learning business administration or obtaining
a master's of business administration (MBA)
from a top-tier business school like the one
Harvard University offers or an online version,
an entire section of study will be dedicated
to understanding what a supply chain is,
how supply chains work and how to manage
them. Why such emphasis on supply chains?
Because that's where the money is!
A plan formulated without supply-chain
considerations cannot be called, nor
considered to be, a business plan. Such a
plan is nothing more than a hopeful notion.
Yet, it happens every day. Every day certain
potato growers - the ones whose potatoes
wind up unpriced in Hunts Point - pour
over endless production details. They ponder
field rotations, potato varieties, irrigation
techniques and water availability and cost.
This, along with myriad additional crop
inputs, form the basis for the many, many
production decisions that must be made,
and made right.
But what about the economic factor
that dwarfs by many times all production
aspects combined in determining a crop's
value and profitability?
When the time comes to sell a crop,
for a grower to capitalize on his expertise,
investment and risk, what then?
Here's " what then. " Here's what the late
and legendary Texas potato farmer, Frank
Barrett, had to say when he learned that
a group of potato growers were creating a
potato-market supply/demand/price database:
" I have planted many, many potato crops. I
did so without knowing on the day they were
planted what market conditions would be
when the time came to harvest and sell them.
How smart was that? I'll tell you how smart
that was: My farm is surrounded by farms that
used to grow potatoes, farms that went broke,
went broke because they rolled the dice year
after year. No business plan, just plant them
and hope. Not very bright! "
He continued, " Such market information is
long overdue. From here forward we can plan
how to fit our crop into the market in the
best possible way. To not do so makes no
sense, and certainly makes no real money.
Just look around. "
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Spudman * January 2021
47
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January 2021

Table of Contents for the Digital Edition of January 2021