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Pundit’s Mailbag — More On
PMA/United Merger

Jim Prevor’s Perishable Pundit, November 2, 2006

The issue of United and PMA merging has caught the imagination of the industry. We originated the discussion with an article PMA/United Merger Fresh On Our Minds that grew out of discussions with industry leaders at the recent Produce Marketing Association convention in San Diego.

We then published letters from Harris Cutler of Race-West Company and Phillip G. Ball Company and Richard Kaiser of The Richard Kaiser Company plus one from Bob Davis of the Maine Farmers Exchange, which we analyzed here. John McClung of the Texas Produce Association wrote an extensive letter relating United’s government relations efforts to the question of merger, and we discussed that right here.

Today we have some additional perspectives. If John McClung wants to run for President he has at least one vote:

I have to agree 100% with John. Stenzel has led the parade for the industry in Washington!

— Chuck Zambito
Zambito Produce Sales

With which, actually, the Pundit agrees as well. There is no question that of the national produce trade associations, United is the one with the more extensive focus on government relations efforts.

Which still leaves open the question of what organizational structure would best serve the industry in developing the most effective government relations program in the future.

Although not a scientific sample, we received some strong communication from grower/shippers pointing out the value they saw in United. This letter was typical:

For years we were members of both United and PMA. PMA always seemed to support the retail side of the produce industry. United always was a big supporter of the growing end of the produce industry. When we were still growers, there were certain concerns that we took to the PMA for help but fell on deaf ears. United listened and got things done for the growers’ interest.

I would support the idea of merging if the growers’ interest were not compromised. United is still working hard in Washington to help the growers survive. It is very important that we keep the American Growers healthy, for if we do not, we will end up like the auto industry and other goods that are produced elsewhere.

— Jerry Van Solkema
Van Solkema Produce, Inc.

Van Solkema is headquartered in Byron City, Michigan. We use the word “typical” because it both expressed the commonly expressed concern for protecting growers’ interests and because it came from a state without a voluntary association that does major work on government relations.

In other words, large grower/shippers in California didn’t write these kinds of letters, probably because they look to other organizations such as the Western Growers Association or the California Grape and Tree Fruit League for help with government.

This dynamic strikes us as problematic for the future of United. Its great reservoirs of support seem to be in places too small to support well-financed regional groups like WGA, for example.

The problem is that United gets a substantial portion of its revenues from the very grower/shippers who view WGA or Florida Fruit and Vegetable Association or another regional group as their primary government-relations vehicle.

What do the big boys who already belong to these regional groups think? Well on Tuesday night, October 31, 2006, the Pundit went home to do some Trick-or-Treating with the Junior Pundits. When they were done collecting their loot, I headed back to the office to be greeted by tons of e-mails, mostly from large California firms forwarding me the “Issue Alerts” they had received from both PMA and United regarding a Salmonella outbreak.

The alerts were virtually identical and, to these big companies, all dues-paying members of both associations, it seemed like their money was simply being wasted in redundant staffing and communication expense.

Lorri Koster, who as the newly installed Co-Chairman of Mann Packing Company, is looking to grow sales and profits through new products, product line extensions and driving unnecessary costs out of the system, sent both e-mails to us with this brief and to-the-point note:

Again, complete duplication of efforts. Received same communication from PMA and United on this.

In the minds of many, it is this waste that drives the urge to consolidate.

However, Jerry’s point must be addressed. Most of the time, there is little conflict between the grower and the buyer when it comes to government relations, but sometimes there is a head on fight and, other times, it is a question of priorities.

If we did have a consolidation of associations, how can we organize a mechanism to make sure that a grower in Ohio, Michigan or Massachusetts has a way of protecting his interests in D.C.?

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