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Merrill - Oregon

Malin Potato Cooperative closes after 55 years

In February of 2015, the Malin Potato Cooperative, an agricultural co-op in Merrill, Oregon, was preparing to open a brand-new, $7 million state-of-the-art potato packing plant. Its members had been convinced the investment would provide a much-needed lift with the promise of high efficiency and new organic markets. Dave Cacka was the co-op’s general manager at the time.

Now, only four years later, with the packing plant shuttered, the co-op disbanded, one of the co-op’s eight members in Chapter 11 bankruptcy, and another now farming for someone else, that moment appears only a distant memory.

“It is the age-old story with agriculture: high debt with low prices,” says Cacka, who left the co-op’s general manager position in 2016 to hand the management to Larry Nixon.

Coming just two years after the dissolution of the 87-year-old Pendleton Grain Growers (PGG) cooperative, the closure of the 55-year-old Malin co-op provides yet another cautionary tale for agricultural cooperatives. PGG’s closure came after its grower-members invested in constructing a large grain storage facility at the Port of Umatilla.

Certainly in the case of the Malin Potato Cooperative, the decline of potato acreage in the Klamath Basin is named as a contributing factor. “Thirty-five, forty years ago, there were 38,000 to 42,000 acres of fresh market potatoes in the basin,” Cacka says. “Now there’s probably 7,000 or less.”

“The co-op was going to go out of business one way or the other. I think the board of directors thought they had a good shot at making this work. It was a move to try to keep the cooperative viable for the future and it just didn’t pan out like they thought it was going to.”

And then there were the expectations put on organic produce: “The premiums growers anticipated generating for organic potatoes, never materialized,” Cacka says. “I think the board of directors were under the impression that they would be able to sell the potatoes at a higher price, which would help pay for the cost of the new facility.”

Who originally sold the plan to the Malin board that a significant investment in a new plant, combined with special organic pricing, would be profitable for the potato co-op is still unclear.

Source: naturalresourcereport.com


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