16 CapitalPress.com
November 3, 2017
Simplot loses dispute with farmer
Judge awards
ownership to
Frank Tiegs
By MATEUSZ PERKOWSKI
Capital Press
Northwest farmer Frank
Tiegs has prevailed against
the J.R. Simplot Co. in a legal
dispute over the ownership of
a Washington food processing
company.
The relationship between
Tiegs and Simplot, who once
held equal ownership of Pas-
co Processing, turned acrimo-
nious last year over the need
to inject money into the com-
pany.
Tiegs wanted each own-
er to contribute $3 million to
Pasco Processing to resolve
a loan default but Simplot
didn’t agree to the cash in-
fusion. The National Frozen
Foods Corp. in Albany, Ore.,
is wholly owned by Pasco
Processing.
The conflict prompted
Tiegs to invoke a contract
provision allowing him to
buy the company if the two
partners deadlocked on a key
decision.
Citing contract terms,
Tiegs claimed he wasn’t
forced to pay anything for
Pasco Processing due to its
poor financial performance.
Both partners eventually
filed lawsuits against each
Tree fruit trade group
combination awaits
federal review
By DAN WHEAT
Capital Press
YAKIMA, Wash. — Two
Northwest tree fruit trade
organizations are awaiting
review by the U.S. depart-
ments of Commerce and Jus-
tice before proceeding with
plans to combine operations.
Northwest Fruit Ex-
porters plans to become a
dues-paying member of
the Northwest Horticultur-
al Council and contract its
staffing and management
with NHC. Both are based in
Yakima.
The effort has been un-
derway for more than a year
and was expected to be com-
pleted this fall. NFE sought
Department of Commerce
approval to retain its Export
Trade Certificate of Review,
which allows it to receive
shipment volumes and tim-
ing information of cherry ex-
ports to Japan to coordinate
efficient Japanese inspec-
tions.
In July, the Commerce
Department notified NFE the
request will also be reviewed
by the Justice Department,
said Mark Powers, NHC
president.
“We were hoping that
wouldn’t be necessary but
now it’s taking longer,” he
said, adding he likely won’t
know more until the end of
the year.
The two nonprofit trade
corporations plan to con-
tinue operating as sepa-
rate legal entities so NFE
can keep its Export Trade
Certificate of Review and
continue to be funded by
grower assessments. NHC
is funded by the Columbia
Gorge Fruit Growers, Idaho
Apple Commission, Oregon
Sweet Cherry Commission,
Washington Apple Commis-
sion, Washington State Fruit
Commission
and Wash-
ington State
Tree Fruit
Association.
The in-
tent of the
Mark
restructuring
Powers
is staffing
efficiencies
and speaking with one voice
on foreign market issues,
Powers has said. Some NFE
board members opposed the
plan, saying they saw no
need.
NFE will operate under
the policy of its board but
be managed by NHC. NFE
will appoint two trustees to
NHC’s nine-member board.
NFE will simplify its gov-
ernance structure, no longer
seeking nominations for
board members from other
industry organizations and
eliminating apple-pear and
cherry commodity commit-
tee governing boards.
NHC was incorporat-
ed in 1947 and focuses on
national and international
policy issues affecting tree
fruit growers and shippers
in Washington, Oregon and
Idaho.
NFE was formed in 1978
to manage export market
preparation procedures for
fresh sweet cherries to Ja-
pan. In 1992, its role was ex-
panded to include export of
apples to Mexico, China and
Japan.
In March 2014, at the
initiative of the Apple Com-
mission, apple market ac-
cess regarding China, Japan,
Vietnam, India, Australia,
South Africa, Egypt and
Israel were switched from
NFE to NHC.
NFE continued handling
apple market access to Mex-
ico and protocols or work
plans for the export of apples
to foreign countries.
Mateusz Perkowski/Capital Press File
The National Frozen Foods facility in Albany, Ore., is part of Pasco
Processing, of which farmer Frank Tiegs has won full ownership in
a legal dispute with the J.R. Simplot Co.
other, with Tiegs seeking a
declaration that he owned the
company and Simplot accus-
ing him of deliberately mis-
Barriers high, but
dairies hopeful
By DON JENKINS
Capital Press
A Washington dairy indus-
try official said Tuesday that
he hopes an upcoming state
report will rekindle interest in
rewarding farmers who take
extra steps to protect water
quality.
Dairy Federation policy
director Jay Gordon said wa-
ter-quality trading, in which
farmers earn and then sell
pollution-reduction credits to
downstream industries and
sewer plants, could help busi-
nesses, cities, fish and farms.
“I’m tickled to death we’re
having this discussion,” he
said. “It has so much potential
promise. That’s why it’s an
idea that hasn’t died.”
The Washington State
Conservation Commission
is circulating a draft of the
report, which names basins
where water-quality trading
might work best, but also
highlights obstacles to such a
program.
The underlying idea is that
it’s cheaper to reduce pollu-
tion by managing the land
“The court concludes
that in this case if a conflict
looks, walks, and talks like a
deadlock, it is a deadlock,”
Peterson said.
Before Tiegs could buy
Pasco Processing, the con-
tract did require him to reach
a five-year deal for supply-
ing Simplot with vegetables,
the judge said.
However, Simplot effec-
tively waived this require-
ment when it refused to ne-
gotiate the supply agreement
with Tiegs, according to the
ruling.
Similarly, Simplot dis-
regarded contract terms by
refusing to participate in me-
diation scheduled by Tiegs,
Peterson said.
Fruit industry keeps eye peeled on NAFTA
By DAN WHEAT
Capital Press
YAKIMA, Wash. —
Washington state exports
close to $500 million worth
of apples, pears and cherries
annually to Mexico and Cana-
da and anything that impedes
that is a very big concern, says
Mark Powers, president of
the Northwest Horticultural
Council in Yakima.
Powers is the Northwest
tree fruit industry’s point per-
son on North American Free
Trade Agreement renegotia-
tions. He’s attended the third
and fourth rounds and soon
will go to the fifth round in
Mexico.
“If something changes that
affects our ability to send the
volume or affects our profit-
ability, that has serious im-
pacts to our economy and
growers here in Washington,”
Powers said. “Any changes
that make our exports more
difficult, we oppose.”
The greatest worry so far
for tree fruit and some other
agricultural commodities is
the U.S. Trade Representa-
tive’s stated objective of “a
separate domestic industry
provision for perishable and
seasonal products.”
That objective has been set
at the behest of Florida tomato
growers — and supported by
some berry, melon and pepper
producers — who say Flori-
da tomato growers have been
going out of business because
Mexico sells tomatoes in the
U.S. at artificially low prices.
The issue comes down to
fundamental fairness says the
Florida Fruit and V,egetable
Association.
Under current rules, U.S.
producers can only bring an
anti-dumping violation case
against Mexican or Canadian
imports if they represent 51
percent of their industry and
can show a year-long impact
of imports, Powers said.
Definitions of season-
al and perishable come into
play and changes that would
Water-quality trading surfaces in Washington
than updating technology to
treat effluent. The Environ-
mental Protection Agency and
USDA embrace the concept,
and so does the Washing-
ton Department of Ecology.
Trades, however, depend on
matching facilities that need
help to comply with discharge
permits with reliable land
projects.
“So far, we haven’t found
that situation where every-
thing aligns,” Ecology special
assistant on water quality Kel-
ly Susewind said.
The obstacles cited in the
report include the fact that
Washington’s pollution-con-
trol law already bars farmers
from releasing anything that
tends to cause pollution into
the water .
Bruce Wishart, a lobby-
ist for environmental groups,
said it may be hard for con-
servation groups to support
water-quality trading for that
reason.
“Really,
technically,
there’s nothing farmers can
trade,” he said. “This is a very
significant difference between
Washington state and some
of the other states where wa-
ter-trading schemes have been
put in place.”
Gordon agreed that recon-
managing the firm.
U.S.
District
Judge
Rosanna Malouf Peterson
has now sided with Tiegs,
finding that he was allowed
to take complete ownership
of Pasco Processing due to
the deadlock with Simplot.
The judge ruled against
Simplot’s argument that she
consider additional evidence
regarding Tiegs’ credibility,
finding it was irrelevant to
deciding the contract dis-
pute.
While it’s “uncontested”
that Tiegs tried to follow dis-
pute resolution procedures,
“Simplot refused to partici-
pate,” which resulted in the
deadlock, she said.
Simplot’s claims that
Tiegs tried to “manufacture”
a “sham” deadlock are im-
material in terms of the con-
tract, the judge said.
ciling a program and the state
pollution-control law “would
be the big challenge,” but
said that water-quality trading
could encourage farmers to
take extraordinary measures,
such as planting trees to shade
streams or using new technol-
ogy to extract phosphorous
from manure.
Ecology outlined in 2010
how a program could work,
particularly to reduce phos-
phorous, nitrogen and sed-
iment. “We think there is
room there,” Susewind said.
“The bottom line is, if the
water is cleaner, we’re all
happy.”
Ecology must concur with
the conservation commis-
sion’s final report. Susewind
said the department is review-
ing the draft.
The report’s lead author,
the conservation commis-
sion’s habitat coordinator,
Brian Cochrane, said the draft
was “a conversation starter.”
“It was my hope to identify
some of the barriers and focus
our efforts on going forward,”
he said.
According to the report,
water-quality trading would
work best in places where the
supply and demand for credits
were roughly equal.
Dan Wheat/Capital Press
The Northwest Horticultural Council is concerned about protecting tree fruit exports as it assists in new
NAFTA negotiations.
allow regional dumping
claims could be used against
Northwest tree fruit or other
U.S. commodities by grower
groups in Mexico and Cana-
da, he said.
“It’s an import-export is-
sue. Those who don’t export
are trying to protect them-
selves in U.S. markets and
U.S. producers who do ex-
port are trying to make sure
that whatever is done doesn’t
hurt our exports,” Powers
said.
There’s a lot of concern
across the U.S. heartland as
corn and meat are the main
exports to Mexico, he said.
Mexico has slapped tariffs
on U.S. apples several times
for alleged dumping since
NAFTA was implemented in
1994. The last one involved
temporary tariffs that were
lifted in June of 2016. Mex-
ico determined Washington
apples did not damage the
Mexican apple industry. That
outcome was partly due to
goodwill between the two
nations as politically the
Mexican government moved
against its own growers, Pow-
ers said.
There has been hope in
the Washington tree fruit
industry that renegotiating
NAFTA could lessen the abili-
ty of Mexico to instigate more
dumping cases.
Powers said he’s working
to ensure duty-free access
for tree fruit into Canada and
Mexico is not jeopardized,
that fruit can be shipped
through borders easily and
that phytosanitary rules re-
main to protect against any
“pest or disease attack on our
plant resources.”
Powers is on the U.S. Trade
Representative’s Agricultural
Technical Advisory Commit-
tee on Trade for Fruits and
Vegetables. It’s one of several
advisory committees whose
members have security clear-
ance to talk to and be briefed
by negotiators.
Idaho quinoa buyer to expand production
By JOHN O’CONNELL
Capital Press
IDAHO FALLS, Idaho
— A local quinoa supplier
plans to significantly expand
his contracted acreage of the
nutritious, gluten-free grain
next season, and to start com-
mercial planting of a quinoa
variety he bred himself.
This season, Jeremiah
Clark worked with 27 grow-
ers who raised 1,600 acres of
quinoa, which he cleaned and
packaged at his facility.
“I see that (acreage) prob-
ably tripling next year,” said
Clark, who believes there’s
sufficient interest from his
current grower base to handle
the quinoa production expan-
sion.
Clark said his quinoa de-
mand far surpassed produc-
tion this season, but contracts
weren’t finalized in time to get
the extra acres planted.
“This year, we’ll know by
the end of November what we
want to do,” Clark said.
Clark also plans to look at
property this winter for build-
ing a bigger cleaning facility,
which could be completed in
time to process next fall’s har-
vest.
“We could do two or three
times the capacity where
John O’Connell/Capital Press File
Jeremiah Clark plans to expand contracted production of quinoa
in Eastern Idaho.
we’re at, but it would be a
good challenge,” Clark said.
Next season, he’ll also
start the first commercial pro-
duction of his own variety,
Kailey, named for his daugh-
ter. Kailey yields better than
the two Colorado varieties his
growers have been planting,
produces 10 percent larger
kernels and matures about a
month earlier. The early mat-
uration should make it easier
for growers to plant fall crops
after quinoa, reduce the risk of
crop damage due to extreme
weather and enable growers
to be done cutting their quinoa
fields by the time potato har-
vest starts. Clark said he gave
the University of Idaho 100
Kailey seeds, which UI plant-
ed in a greenhouse last winter.
The greenhouse generated
a couple of pounds of seed,
which a grower in Oregon
planted on 2 acres, providing
a seed supply for next sea-
son’s commercial production.
Clark said about 70 per-
cent of his fields produced
an adequate crop this season,
but two or three fields experi-
enced “complete failures” and
weren’t harvested. Clark said
most of the problems were on
dryland farms, where sum-
mer rainfall was insufficient.
However, he also had a dry-
land field in the Ashton area
that yielded as well as some of
the irrigated fields.