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Friday, July 29, 2022
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Opinion
Editor & Publisher
Managing Editor
Joe Beach
Carl Sampson
opinions@capitalpress.com | CapitalPress.com/opinion
Our View
It’s about marketing
M
ost experts would agree
that the worst marketing
plan ever is this: “Our
product is pretty much the same as
everyone else’s.”
Yet, for many farmers and ranchers,
that may well be their marketing plan
— or lack thereof. Crops and livestock
are often marketed en masse with little
or no differentiation from others.
They are price-takers.
The farmers and ranchers who carve
out a niche for their crops and live-
stock can make the transformation to
price-setters.
One example of a readily recog-
nized niche is crops and livestock that
are raised organically. Some customers
seek out organic products and are will-
ing to pay a premium price for them.
Many beef producers market their
cattle based on how they are raised or
the breed. Grass-fed and hormone-free
are just two examples of niches.
Wagyu cattle, a breed originally from
Japan, produce highly marbled beef
and extraordinary prices. A wagyu rib-
eye steak for sale online was priced at
$138 a pound.
That’s the advantage of being a
price-setter.
Similarly, some wheat growers mar-
ket their crop as unique, either in how
it is grown or how their cooperative is
organized. Some even help consum-
ers trace flour back to the farm where it
was raised.
Some ranchers sell their beef
directly to customers online. Many of
those customers become loyal because
they get to know the ranchers’ families.
In the food world, perhaps no farm-
ers have developed the concept of
niche more than the French. Not only
is food produced in France marketed as
its own niche, but food and wine from
various provinces and regions are mar-
keted as special.
Everyone knows that “champagne”
sparkling wine must come from the
Champagne region, but do they know
about black truffles from Dordogne, or
scallops from Brittany, cheese from the
French Alps, ham from Bayonne, gar-
lic from Uzes, chili peppers from Espe-
lette or the unique blue-legged chick-
ens from Bresse?
In their own ways, each of these
products is unique, and consumers
willingly pay higher prices for them.
France is not alone in its niche-cen-
tric marketing. In Spain, the ham is
considered to be so special there is
a museum dedicated to it in Madrid.
Called Jamon Iberico, it and its cousin,
Jamon Serrano, sell for many times the
price of U.S. ham. It sells for $13 an
ounce online.
Our View
Truckers don’t want
AB 5’s protections
A
group of independent truckers instituted an
“free from outside control; not depending on anoth-
er’s authority.” Unlike drivers who are employed by
extended blockade of the Port of Oakland to
trucking companies, the independent drivers own their
protest a California law that endangers their
trucks and are free to refuse an assignment.
livelihood.
But, that’s not enough to satisfy the law.
The truckers’ actions have caused delays in getting
AB 5 requires that a hire be classified as an
inbound goods into the supply chain, and has stopped
employee unless the business can prove each of the
domestic goods — including farm products — from
following points:
being shipped abroad. At a time when the country is
(A) The person is free from the control and direction
struggling to get the supply chain back on its feet, the
of the hiring entity in connec-
delays are problematic.
tion with the performance of
But, we think the truck-
the work, both under the con-
ers’ concerns have merit.
tract for the performance of
In 2019, the California
the work and in fact.
legislature passed Assem-
(B) The person performs
bly Bill 5, a measure
work that is outside the usual
pushed by organized labor
course of the hiring entity’s
to rein in the state’s bur-
business.
geoning gig economy.
(C) The person is cus-
When using indepen-
tomarily
engaged in an inde-
dent contractors, busi-
Don Jenkins/Capital Press File
Owner-operator truckers in California are protesting pendently established trade,
nesses don’t have to pay
overtime, provide benefits, a state law that would force companies to hire them occupation, or business of the
as employees instead of as independent contractors.
same nature as that involved
deduct taxes and pay work-
in the work performed.
ers comp and other payroll
The truckers, and the companies that hire them, say
taxes as they do with their regular employees. Inde-
this test makes it all but impossible for them to qual-
pendent contractors are often used to augment a com-
ify as independent contractors. The work of an inde-
pany’s regular workforce to meet peak demand, while
pendent trucker is not “outside the usual course” of a
some businesses rely entirely on contractors to carry
trucking company’s business.
out key functions.
The protest started after the U.S. Supreme Court
In recent years, the use of independent contractors
refused to take up a challenge to the law.
has exploded in California, particularly in the creative
California’s 70,000 owner-operator truckers now
services, software and ride-share industries. Many
face the prospect of setting up their own trucking com-
contractors like the flexibility and independence the
panies and dealing directly with shippers, or for their
status offers.
present customers to make them employees and pay
Supporters of AB 5 claimed that businesses too
for the use of their rigs.
often were strictly controlling the work of contractors,
Or, like ride-share giants Uber and Lyft, maybe
treating them as employees but not providing the pay
they can get an exemption on the ballot. Once Califor-
and benefits due. There being bad actors in all areas of
nians start paying the increased costs of moving the
life, that no doubt was sometimes true.
goods they buy, they should be happy to pass such a
The protesting truckers don’t seem to want these
measure.
protections. Our dictionary defines “independent” as
READERS’ VIEW
Power line worries
those in its path
For 13 years Idaho Power Co. has
been trying to railroad the 310-mile-long
B2H, Boardman to Hemingway power
lines through Eastern Oregon.
No one wants it, but Idaho Power
keeps pushing, trying to outflank the
public and government agencies, state
and federal.
By the time they go into service they
will be archaic, but Idaho Power gets
around 10% of building cost bonus,
most of which will go into stockholders’
pockets.
Nor does Idaho Power have an ade-
quate fire plan for when the lines break
and start fires, as it did in Paradise, Calif.,
when PG&E ignited a wildfire. Death
toll: 85 people.
Nor has weed control from build-
ing the project been properly addressed.
The power lines cross the Oregon Trail
numerous times, but Idaho Power could
care less about preserving the trail or
the heritage that goes with it. Their plan
is to place their lines directly in front of
the $16 million Oregon Trail interpre-
tive center outside Baker City. The list
goes on.
Whit Deschner
Baker City, Ore.
Protect land that
grows food crops
As a city dweller, I support limits on
urban expansion. More compact cities
fight climate change by reducing fossil
fuel based transportation.
However, I question farm advocates’
use of the argument that we need to pre-
serve farmland for our food supply. It’s
just like when anti-tax developers hide
behind little old widows to justify their
objections to taxes.
Yes, food production is important,
but how much farmland grows non-
food products?Nearby Linn County
touts itself as the “grass seed capital of
the world.” How much of that grass is
grown for golf courses? Urban and rural
lawns? Nobody eats that grass, not even
cows. As the new normal of drought
takes over, and homeowners are con-
verting their lawns to rock gardens, the
demand for grass seed will fall, just like
it fell during the recession when fewer
homes were being built with their requi-
site lawns.
In Oregon, when field burning was
restricted, hazelnut farms began tak-
ing over the grass seed fields. Hazelnut
trees require lots of pesticides, harmful to
food-pollinating bees.
If farmers want city allies, they must
make the case that protected farmland
will be used to grow (organic?) food, not
such crops as non-edible grass seeds or
bee-killing pesticide dependent crops.
Dave Stone
Springfield, Ore.
As a whole, the wine industry has
perfected niche marketing. Not only is
wine from various regions marketed
separately — think Napa Valley or Wil-
lamette Valley — but it is marketed by
its American Viticultural Area, or AVA.
California has 139 AVAs, Wash-
ington state has 20 and Oregon has
23. Each has its own geography, cli-
mate and soil. The federal Alcohol
and Tobacco Tax and Trade Bureau
approves each AVA. A 5,530-acre AVA
was just approved for the Mount Pis-
gah Polk County area in Oregon’s Wil-
lamette Valley.
In turn, many wineries market their
wines based on the region and the AVA
they are in.
Like so many other farmers and
ranchers, they know that when it comes
to marketing, niche is the thing. It is
often the difference between being a
price-taker and a price-setter.
Renewable hydrogen
project can produce
green fertilizer, reducing
emissions and costs
I
f there’s one overar-
ching reminder from
today’s record-high
fertilizer prices, it’s that
global crises and markets
have an outsized impact
on essential inputs of U.S.
farms.
Between the restric-
tion in trade with Rus-
sia and Belarus and surg-
ing domestic inflation, thin
profit margins in the agri-
cultural sector are being
consumed by higher costs
of production. But we can
mitigate these disruptions
in the future by produc-
ing fertilizer in a way that
shields it from some of
today’s market volatility.
Our project, the Obsidian
Pacific Northwest Hydro-
gen Hub, will do just that.
First, let’s define the
problem and isolate two of
the many factors driving
fertilizer cost: natural gas
and transportation.
Today, nitrogen fertiliz-
ers are based on ammonia
produced principally from
natural gas. Natural gas is
processed with steam to
release hydrogen, which
is combined with nitrogen
from air to synthesize the
ammonia. The U.S. cur-
rently produces $20 bil-
lion of hydrogen annually,
and the second-largest
use for this simple gas is
in the production of fer-
tilizer for agriculture. It is
estimated 70-to-90% of
the cost of fertilizer is the
cost of natural gas. So, the
recent global surge in nat-
ural gas prices has greatly
impacted fertilizer cost
and supply.
There are other ways to
produce hydrogen, how-
ever. Our solution to pro-
tect Northwest farmers
from the volatility of the
natural gas market is to
produce hydrogen using
wind and solar electricity
to separate water into oxy-
gen and hydrogen using a
process called electrolysis.
Renewable energy instal-
lations paired with elec-
trolyzers located along
a storage pipeline will
carry the released hydro-
gen to two regional fertil-
izer production facilities
that will be in Oregon and
Washington.
In Eastern Oregon and
Washington, where the
storage pipeline would be
built, there are ideal loca-
tions with wind and solar
resources for producing
this renewable hydrogen.
The price of hydrogen
from this storage pipe-
line is not tied to the cost
of natural gas and can be
GUEST
VIEW
Ken
Dragoon
controlled through con-
tracts with local renew-
able energy installations,
thereby stabilizing the cost
of one of fertilizer’s most
volatile inputs.
An additional driver
of fertilizer price volatil-
ity for Northwest farm-
ers is transportation. There
is little fertilizer produc-
tion in our region, so it
is primarily purchased
from the Gulf states and
abroad. The surge in fuel
prices and shipping rates
are exacerbating fertilizer
prices here because of the
distance the fertilizer must
travel.
Obsidian’s proposed
hydrogen hub would
use regional renewable
resources to produce
ammonia fertilizers locally
at stable, predictable costs
and use the storage pipe-
line to greatly reduce
transportation cost because
transport and delivery of
this hydrogen would not
be dependent on volatile
fossil fuel prices.
The Obsidian Pacific
Northwest Hydrogen
Hub will leverage pri-
vate investment and — to
a lesser extent — federal
grants to make the proj-
ect a reality. Last year,
President Biden signed
a bipartisan infrastruc-
ture law that will award
competitive grants to
regional “clean” hydrogen
networks.
Earlier this year, Obsid-
ian established a Steering
Committee of more than
30 stakeholders, represent-
ing a broad range of inter-
ests, that is advising on
project development. We
are preparing an applica-
tion to be awarded a fed-
eral grant from the U.S.
Department of Energy.
Through partnerships
with farmers, landown-
ers and local officials, we
believe this project has the
potential to stabilize and
improve farm operations
across the Northwest. You
can find more information
about the Obsidian Pacific
Northwest Hydrogen Hub
at www.pnwhydrogenhub.
com.
Ken Dragoon is direc-
tor of hydrogen develop-
ment for Obsidian Renew-
ables in Lake Oswego,
Ore.