the specific example they gave was that if a farmer harvests his potatoes too early those potatoes wind up being sold for chips rather than being sold for use as baked potatoes etc.
does this make sense?
and if yes, how much more profitable is it to sell potatoes for home use/baking rather than selling them for chips?
thanks!
I do know that many years ago, big vegetable processors would call the farmer and tell what day to harvest each field and variety based on things like "heat/light hours."
It would go something like this "Hello, Bob. You need to harvest the carrots variety XX in field number YY tomorrow. That is 9.8 acres. Deliver them to receiving dock ZZ by 12:25 PM."
I am sure it is even more sophisticated now.
so in summary, it is NOT accurate to think that there is a prime window for a potato, and if it is harvested before that window it goes in the junk (chip) pile.
Rather, certain potatoes are grown specifically for chips, and other potatoes are grown specifically for the table.
if it matters, the example used by the CFO of this company was that if the potato is harvested early it becomes chips (which sells for less) and if it is harvested just right it winds up as a russet on your table (which sells for more).
i recognize that he was just painting a picture anecdotally so he may have been taking some liberties, but I think think this is a compelling investment opportunity so I want to know as much as possible.
thanks guys
He dug potatoes when the plants were dead & brown regardless of the variety I believe. He had a huge storage shed that had 4 computer controlled compartments. He could set the temperature and humidity to match the ground conditions when he harvested, so it was like the potatoes never came out of the ground. He was still shipping potatoes well into the middle of the winter some years.
The 14 hour weekend days were hard on this 'office worker' but I got to enjoy the best bow hunting ever in the small woodlots scattered across that 2 square miles.
Howard
"I think think this is a compelling investment opportunity"
To be honest, it sounds VERY sketchy to me!
IMO somebody is getting ready to turn $1,000 into $100,000 investing in potatoes and they intend to use your money to do it.
1. Never invest in something you don't really understand (gambling is not investing).
2. Agriculture is HIGHLY risky and rewards are tough to come by.
3. Commodity markets are a very specialized. Some invest, most gamble.
4. I am neither a financial nor an agriculture adviser.
I took a quick look at the financials and all of them are negative for this company. They are losing money hand over fist - but so was Microsoft at one time.
For some reason, this company reminds me of a trump. I see a lot of self-promotion and very little actual financial success.
It looks a lot like a penny stock for me. If you love gambling, gamble. If you want an investment .....
think of it this way - if there is a company with 2 business lines, and one of those business lines is making $10, and the other is losing $10.25, a quick look at the company would show that the business is losing money. but what happens if they shut down the money losing business? all of a sudden people realize that the business is actually making $10.
that is the basic story with this company. if the agriculture business is a success, then the stock will do very well. but if it isn't a success (which is my base case assumption), they will eventually shut it down and then the core business will shine through, and i think the stock will still do well.
gambling seeks quick returns with the odds stacked against you. investing requires patience, discipline, and reason to believe that the odds are in your favor.
by the way, patience and discipline are also key attributes to being a successful hunter as you know.
this is not investment advice, nor am i seeking to be promotional, but if you are interested in learning more and you are an accredited investor you may want to take a look at this http://laughingwatercapital.com/wp-content/uploads/2014/01/ITI-valuex-vail-final.pdf
no matter what though you are correct to approach any potential investment with skepticism!! no one should buy any stock without doing a lot of research first, which is why i am asking the good folks on bowsite who know more about farming than i do what they think!!
It's more the grading than the variety that determines for chips or fries or mashed. 1As, unblemished of various graded sizes went to 5 and 10lb poly bags for grocery stores, restaurants, etc. The larger 1As were graded out as well and were premium "bakers" for high end restaurants. #2s were those with growth cracks, sunburn and/or knobs that are cut off. Those were used for chips and fries. Ever see a green tint on a potato chip edge? The green indicates the potatoes was exposed to direct sun while in the field. Doesn't hurt it any, just a blemish that folks don't want to see in the supermarket. Bs were normally undersize and used for processed potatoes like mashed, dehydrated,etc.
Too badly deformed or insect bores, etc. went to the cull truck to be dumped. Occasionally a cattle rancher or pig farmer would buy up the culls. I know for livestock they normally boiled em first as animals tended to choke on the raw ones from time to time.
The vines are sprayed with defoliant to kill them off a couple weeks or so before digging. When the plant dies the skin of the potato thickens and toughens or "sets". After the plants were sprayed we used to run a cultipacker over the rows to break up and fill in surface cracks that may sunburn the potato and downgrade it.
A crop with too much fertilizer, not enough or even just at the wrong time will make more downgraded potatoes per ton. Same with irrigation. Weather, insects... you name it. It's not so much the variety as the conditions they are grown in that will determine the use for the bulk of the crop.
thanks again
