How can farmers make irrigated land pay? Two Pope County producers do it by scrubbing and bagging their new potatoes on-farm.

By E. M. Morrison

Glenwood, Minn. -- The French call potatoes "pommes de terre," the "apples of the earth." The phrase suggests new red potatoes -- small, round, rosy, delicate in flavor.

Choice new potatoes enjoy strong demand in the fresh retail market and command premium prices. Now a Pope County company is developing a stake in the early red potato market. Agra Development International, Inc. recently completed a $115,000 expansion of its potato wash plant in Glenwood. The improvements will allow ADI to market new red potatoes early in the season when prices are highest.

Make it pay

Craig Damstrom of Alexandria and Mark Herickhoff of Belgrade founded ADI in 1992 to boost returns on their irrigated cropland. "It's hard to make irrigated fields pencil out," Damstrom says. "You need a crop like potatoes or alfalfa." And that's still not enough, he says -- farmers must ask how to add value to those crops themselves.

Damstrom and Herickhoff began by mixing and storing their own fertilizer in a 60,000 square-foot warehouse east of Glenwood. "The fertilizer plant was a way to lower our input costs," Damstrom says. They also built a potato cold storage room at the warehouse, which gave them more marketing flexibility. "Before, we had to sell our potatoes right out of the field," Herickhoff says.

In 1996 Damstrom and Herickhoff pushed for more vertical integration, installing a potato wash plant at the warehouse. Washing, sorting and packaging adds significant value to their new potatoes, they say. The processing generates gross revenues of about $2.75 cwt.

Last year, Damstrom and Herickhoff enlarged the wash facility with help from AURI and the Glenwood Development Corporation. They processed about 50,000 cwt. of potatoes, and the plant has enough capacity to triple 1997 volume, creating up to 20 seasonal jobs.

AURI also helped ADI upgrade its packaging equipment. Now the company can pack higher value retail-size bags and paper cartons, as well as 1500-pound bulk bags.

The improvements allowed ADI to effectively market new potatoes, Damstrom says. "The limiting factor in the early market is how quickly you can get the potatoes washed and bagged."

Planted in middle life

Together, Damstrom and Herickhoff grow 400 acres of Dark Red and Red Norland potatoes for ADI. Herickhoff, 48, runs a 5,000-acre irrigated and dryland farming operation in Stearns County with his wife Donna and their son.

In addition to red potatoes, the Herickhoffs produce corn, soybeans, russet potatoes and dry edible beans; they also feed 500 head of cattle. "Mark is one of the big farmers around here," says Damstrom, who knew Herickhoff by reputation before meeting him at an auction.

In contrast to Herickhoff, a lifelong farmer, Damstrom took up farming just a decade ago. "My wife calls it my mid-life crisis," says Damstrom, 54, a former chemical company executive.

Damstrom grew up in Plentywood, Montana, and joined the Peace Corps after college. After serving two years in Latin America, he remained in the region for 20 more, overseeing ag chemical manufacturing in Mexico and Costa Rica for Sandoz, a multinational chemical company. In 1984, he returned and took charge of U.S. ag chemical sales operations for Sandoz.

"But I always wanted to have a farm," he says. During a visit to relatives in Elbow Lake, Damstrom and his wife Kathy found farmland near Alexandria they decided to buy. Says Herickhoff: "I told him, now he was going to get his real education!" Since 1987, the Damstroms have raised corn, soybeans, potatoes, and dry edible beans on 1,500 irrigated acres in Douglas County.

Both partners bring extensive business backgrounds to the ADI venture, and that's a real plus, says Michael Sparby, manager of AURI's Morris office. Indeed, both men describe themselves as hands-on managers. "What appealed to me about this is having more control of our own destiny," Damstrom says. "Here, we're involved with all aspects of management."

Adds Herickhoff: "One thing we both have in common is a real entrepreneurial spirit."