ADMINISTRATOR'S REPORT -- Jeff Haarer
Administrator's Final Status Report on the 2006 Processing Asparagus Bargaining Unit: Jeff Haarer reported that MACMA represents 64 percent of the bargaining unit membership, 54 percent of the bargaining unit volume, and 54 percent of the bargaining unit value. All asparagus processors reported.

MOTION: FRED TUBBS MOVED TO APPROVE THE ADMINISTRATOR'S FINAL STATUS REPORT ON THE 2006 PROCESSING ASPARAGUS BARGAINING UNIT. SECONDED BY TIM BRIAN. MOTION CARRIED UNANIMOUSLY.

Negotiation Schedules for 2006: Distributed to Board members prior to the meeting. There are no changes to the schedules. Jeff Haarer commented that ProFac opted out of negotiations with MACMA. Fred Tubbs asked if the letter from ProFac had been distributed to Board members. Jeff responded that it was not, but offered to read the letter to those present. He proceeded to read the letter.

Fred asked why MACMA changed their policy for negotiating with ProFac, and commented that the situation could put ProFac members, who represent 25% of the asparagus industry, in jeopardy. Ken Nye responded that MACMA struggled with their method of negotiating with ProFac in previous years, because it was inconsistent with their agreements with other processors. Ken stated that MACMA's proposal was presented to ProFac and growers, and that ProFac needed to be prepared to be treated differently from previous years. Ken continued to outline the discussions with ProFac and other handlers that resulted in the decision to negotiate with ProFac in the same manner as other processors.

Fred commented that last year, growers were allowed to deliver to processors that had opted out and asked whether the same would be true this year, in light of the new agreement with ProFac. Ken responded that each year is different, and that in 2006 all handlers will be treated the same.

Fred commented that MACMA Advisory Committee meetings should have included a ProFac representative. Ken responded that for the first meeting ProFac members were asked not to attend, but in subsequent meetings they were present.

Ken stated that MACMA tried to create an agreement that would be acceptable to all handlers. He agreed that this year is different for ProFac, but all other handlers signed on, so he feels that the agreement is an equitable one.

Tim Brian asked whether the issue was payment terms or price. Ken responded that ProFac has always paid on a delayed basis but received the cash discount of 2 cents per pound. MACMA will continue to try to work with ProFac to reach an agreement for this year.

NEW BUSINESS:
Michigan Processing Apple Growers Report: Dawn Drake reported that the 2005 crop was very manageable; crop is estimated to be about 20 million, the same as last year. Excellent processing movement and excellent fresh movement. There haven't been price increases for processing apples - the prices that MACMA negotiated last fall were the same as the two previous years. Growers need to receive more money, and most processors want to pay more, but with the way consolidation has taken place in the retail business, large retailers are dictating from the top down what they want the processors to do.

Apple Annual Meeting had good attendance, with 110 people present. Rep. Goeff Hansen was a speaker, and discussed some of the legislative issues and minimum wage increase. Lot of time has been spent lately on legislative issues. Within state legislation, there's been a big issue with fruit and vegetable inspections. MDA's budget is tight - Legislature removed $300,000 from fruit and vegetable inspection, with the proposed solution of raising inspection fees to recoup the lost funding. There are currently only seven inspectors in the state to inspect all commodities. Legislature's recommendation was to cut two to three inspectors, so there would be four or five inspectors to handle all the commodities for the entire state. Rep. Hansen was able to get the $300,000 back in a supplemental bill, which has passed the House and is now in the Senate. If it passes, that money will be restored to fruit and vegetable inspection.

Another bill that was introduced by Rep. Hansen is House Bill 5542, which is a producer lien law. The gist of the law is that in the case of a bankruptcy, the grower is moved higher up on the "food chain" so that they will receive payment after banks, but before others. Processors are concerned because it may impact their ability to borrow money from the bank.

The biggest issue in Washington, DC, is immigration. It's important to all farm operations as well as related businesses. Last week there were four bills on the Senate floor to deal with immigration, and all of them had some type of guest worker program in them, but none of them would work. There is currently an H2A temporary worker program in place, but it doesn't work because it's too cumbersome.

Another big issue is Guthion insecticide. A few years ago, the NRDC (Natural Resources Defense Council) sued the EPA (Environmental Protection Agency) for growers using Guthion. In the settlement, the EPA agreed to put Guthion through a review process, and that's going on now. It looks like the EPA is not going to renew registration for Guthion. That's critical for growers, because they don't have alternatives. If growers lose that chemical, they will have to use four or five different chemicals to do the job of one. Art Lister commented that ?reduced risk? is not really reduced risk at all. Dawn agreed and said that not only is there more environmental pressure from the chemicals, but there's an increased cost and most likely, they wouldn't be as effective.

Dawn commented that MACMA has talked with legislators about renewing funding for fire blight research - $500,000 that is split between Michigan State University and Cornell University. The program is in its ninth year, and she stated that the program should be safe because they are not requesting additional funding.

Jeff Haarer asked how the increase in minimum wage would impact agriculture. Dawn responded that employers will probably cut back on hours that their employees will be able to work, because they won't be able to afford the increase. Agriculture could have been excluded as the U.S. average wage in agriculture is already $9.50 per hour.

Art Lister commented that growers will be impacted with a higher wage rate, but receive no Single Business Tax credit. Processors, however, should see a balance between the two. Tim Brian commented that the increase will bring the whole pay scale up, even for those employees paid above the minimum wage.

Michigan Asparagus Growers Report: Ken Nye reported that last year MACMA was not able to negotiate a good price - below 50 cents per pound, plus Michigan had a poor crop. As a result of that, a Study Committee was formed last winter. The committee determined that the industry needs some long-term stability. There can't be repeats of last year very often or there won't be much of an industry left in the state. In terms of domestic production of processed asparagus, Michigan is about the only place in the United States. There's a little in California, and processors are essentially gone from the state of Washington. They've gone to primarily fresh market. Handlers in Michigan are very concerned that if there is no progress, growers won't be able to do business and there won't be an industry to process.

Annual Meeting is next week. It provides an opportunity for growers to get together and see where the industry is heading. Asparagus Summit was very successful, provided by the Asparagus Advisory Board, and provided an opportunity for the industry to get together to talk about marketing issues, legislative issues, immigration reform and minimum wage.

Andean Free Trade Agreement negotiated with Peru will put into place a duty-free status. One of the most important agricultural products they're sending to U.S. is asparagus. They've done a wonderful job of taking advantage of the duty-free opportunity. MACMA is hopeful that U.S. officials will realize the impact on U.S. asparagus growers, and that the agreement could change.

Not much asparagus has been planted in the last five to six years. We're not maintaining the industry.

Fred Tubbs asked whether MACMA has violated the Agricultural Marketing and Bargaining Act by discriminating against ProFac this year? Jeff Haarer responded that no Unfair Practice Complaint has been filed against MACMA.

NEXT MEETING DATE
Next meeting is Thursday, August 15, 2006, at the Oceana Intermediate School District, in Hart.

PUBLIC COMMENT
No public comment.

OFFICIAL PRESENTATION
Christine White presented to Ethel Lister a Michigan Commission of Agriculture Resolution to honor Arthur Lister, Sr., for 24 years of outstanding and loyal service to the Agricultural Marketing and Bargaining Board.

ADJOURN

MOTION: FRED TUBBS MOVED TO ADJOURN. SECONDED BY ARTHUR LISTER. MOTION CARRIED UNANIMOUSLY.

The meeting adjourned at 11:45 a.m.