Wednesday, April 2, 2008

I guess they didn't specify the "Northwest" of what country.



Northwest brands reject pickles from Northwest growers

Wednesday, April 2, 2008
Last updated 9:36 a.m. PT


SKAGIT VALLEY -- On this rich rural land where tractors share the roads with cars, cucumber growers for decades have harvested their crops, which made their way onto pantry shelves in jars of Nalley, Farman's and Steinfeld's pickles that touted their Northwest roots.

That tradition is ending.

Starting this season, pickles in those jars will come from other parts of the country -- and even India.

Bay Valley Foods, a Green Bay, Wis., company that owns those labels, has broken a contract and told a small group of Western Washington and Oregon farmers it no longer needs their cucumbers. That's because the company, which says it's the nation's largest pickle and pepper supplier, is closing a processing plant in Portland in June, a month before harvesting begins.

"They decided they could get cucumbers cheaper elsewhere," said Don Kruse, a La Conner farmer who estimates he will lose half of his gross annual income -- a few hundred thousand dollars.

Ron Bottrell, a Bay Valley Foods spokesman, said it wasn't economical to keep the Portland plant running, and with its closure there was "no longer a need to source cucumbers in the Northwest."

He said the cukes would be sourced "elsewhere in the U.S.," but declined to disclose the locations; he added that India for some time has been a small source of cucumbers.

Skagit farmers, who were told of the decision in February, say Bay Valley's decision is a multimillion-dollar jolt to this agricultural community halfway between Seattle and the Canadian border, and it's expected to displace hundreds of migrant workers who depend on the late-summer crop. They also say Bay Valley's choice to pull out with two years left on a 10-year deal puts them, frankly, in a pickle on what to do with 1,000 acres earmarked for cucumbers.

"You can switch wives way easier than you can switch crops," said Mike Youngquist, a fourth-generation Mount Vernon farmer whose great-grandfather homesteaded here in the 1890s.

Bay Valley Foods and ProFac, a co-operative that represents the farmers, have reached a settlement for the affected 14 Skagit Valley farmers and another four from Woodburn, Ore. But Ken Dahlstedt, who negotiated the deal for the farmers, said the growers would rather harvest cucumbers.

"It would be safe to say the growers will be paid damages for lost delivery. It's a fair settlement. But the growers are still losing two years of delivery, and the biggest damage is for this year," said Dahlstedt, a grower who also is a Skagit County commissioner. "I think the company is being fair, but we would prefer to grow the crop and we would be financially better off to grow the crop."

Dahlstedt said the growers could receive more than $1 million, but gross sales for this coming year were estimated at $5 million. He said harvesting the crop can cost up to 60 percent of the gross sales.

Dahlstedt said some farmers still plan to sell to Pleasant Valley Farms, which is southeast of La Conner on Dodge Valley Road. Pleasant Valley, however, is primarily a wholesaler and a much smaller operation than Bay Valley. Pleasant Valley owners did not return calls for comment.

Along with cucumbers, Skagit Valley is home to about 70 different crops, with the biggest being potatoes. The closest McDonald's or Starbucks is miles away, and the favorite watering hole is the Rexville Grocery, a quaint outpost in rural Mount Vernon where locals can gossip, drink coffee and buy everything from wine to cat food to fresh clams.

Bay Valley's Bottrell said even though cucumbers no longer will come from Washington and Oregon, the brands would continue to be found in Northwest stores. He said he didn't know if the company would keep the slogans that date to World Wars I and II.

Nalley says its products have the "Down home taste of the Northwest since 1918," while Steinfeld's says its pickles are the "Quality brand of the Northwest since 1922," and Farman's says its products have the "Delicious taste of the Northwest since 1944."

Skagit Valley, with its rich riverbed soil and high water tables, began growing cucumbers for Tacoma-based Nalley and Enumclaw-based Farman's in the 1950s as farmland was becoming scarce around Seattle and Tacoma, Youngquist said.

In 1999, Dean Foods acquired Portland-based Steinfeld's, and a year later bought the Nalley and Farman's brands. ProFac, the farming co-op, agreed in 2000 to supply Dean Foods with cucumbers for up to a decade, and that deal was transferred over to Bay Valley Foods when it was spun off from Dean Foods in 2005.

Bay Valley Foods, which also sells Heifetz and Peter Piper's pickles, is a division of TreeHouse Foods Inc., an Illinois-based publicly held company.

TreeHouse last year said its pickles segment generated 28.5 percent of its nearly $1.2 billion of net sales. The company in 2007 had a 3.6 percent profit margin on $41.6 million in net income, according to a securities filing.

Youngquist, who said he grew cucumbers on only about 40 acres, said he likely would withstand Bay Valley's departure a bit better than some of the other farmers. Yet, Youngquist said he's very concerned about the farmworkers.

"For every acre it takes about one worker, and last year we (Skagit Valley) had 1,000 hand-picked acres. So 1,000 seasonal workers technically are out of a job," Youngquist said. "These are poor people who don't have a lot of skills other than being energetic and hard workers. ... They are the losers in this thing."

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