The French Fry Connection

Richard Read

Photos by Kathryn Osker
The Oregonian   October 21, 1998, Sidebar

New Competitors in an Old Land Race to Catch Up

The potato industry is branching out to China, but Northwest processors can rest easy, for now

DAPU, China—Liu Zhijiang plows his four acres behind a horse with no name. He digs his spuds with a hoe. He stores them in a cave.

Liu’s operation is a far cry from the massive scale of mechanized agriculture practiced by Hutterites and other potato farmers in the Columbia Basin. But while members of the religious sect cling to tradition at one end of the french fry chain, Liu, a 46-year-old survivor of the Cultural Revolution, reinvents his culture at the other.

A potato farmer in Dapu, China, northwest of Beijing, unloads his manure cart. Chinese farmers, the latest growers enlisted by the J.R. Simplot Co., are a long way from competing with sophisticated Columbia Basin farms in the global french fry trade.

Gone is Liu’s three-room mud home, replaced by a nine-room house that comfortably holds his wife and two children. Gone is the 8,000-member agricultural collective, which told Liu to plant apple trees that withered and died.

“My hero is Deng Xiaoping,” says Liu, referring to China’s late paramount leader, who introduced market reforms. “He brought us to prosperity.”

Liu’s latest benefactor is the J.R. Simplot Co. of Boise, which buys his potatoes for its new processing plant 150 miles northwest of Beijing.

The company’s foreign forays alarm some American farmers and french fry marketers. An internal report by the U.S. Potato Board, which promotes U.S. spuds, describes Simplot’s Chinese plant as a threat that could undermine American exports.

Workers in a storage building in Zhou Lu, China, load potatoes the old-fashioned way for Simplot’s french fry plant in Beiging. Northwest farmers use conveyer belts and tractor-trailer trucks to move spuds.

That might happen someday, but it won’t happen soon. The Northwest can grow bigger volumes of processing potatoes better and cheaper than any other region of the world.

Workers used wheelbarrows to feed the Beijing factory when it opened in 1990. The plant, which employs about 300 people, produces in a year what Simplot’s Hermiston plant makes in a week.

Simplot acquired three french fry plants in Australia in 1995. But relatively high freight rates discourage shipping Australian fries to Asia.

French fry production in Australia, China and other nations would have to explode to depress world prices.

Simplot is always looking for new potato sources. The company even investigated growing potatoes in the Indonesian highlands. But days there are too short, farms are too small, and land is too uneven to produce high-quality potatoes.

Other Northwest companies are capitalizing on depressed Asian currencies to expand abroad. In June, analysts said Tektronix Inc. got a bargain when it bought a Malaysian supplier of loading mechanisms for its color printers.

McDonald’s branched out in China only during the past decade. As recently as 1991, Americans in Shanghai lined up eagerly on Independence Day in the U.S. Consulate garden for Big Macs flown in from Hong Kong. Now Shanghai has 23 McDonald’s outlets.

Simplot began rearing seed potatoes in China 10 years ago. The company now produces 70 percent of the fries for McDonald’s 207 mainland outlets. And, despite the primitive state of Chinese agriculture, Simplot is introducing proven potato varieties and modern equipment.

In the village of Dapu, Liu finances his tiny farm with cash raised from sales of spuds to Simplot. He says that life has never been better. His family uses Head & Shoulders shampoo and other Western products. His 19-year-old son tacks Michael Jordan posters on the kitchen wall.

One of these days, Liu plans to travel southeast, past the Great Wall to Beijing.

He’ll find the golden arches. He’ll step up to the counter. And he’ll order his first french fries.