Unchained in America

In Parts 1 and 2, we saw how the marketers behind Frito-Lay’s “Lay’s Local” ad campaign are trying to persuade us that Lay’s Potato Chips are part of the local food movement because the potatoes are gown by “local” farmers and are made into potato chips locally. We also saw how the Lay’s marketers cleverly don’t define what they mean by “local” so that we consumers will read our own definitions into the term.

People today are looking for a story behind the food they eat. The Lay’s marketers oblige us by making five “local” farmers the centerpiece of their campaign. Before we can examine the deception behind this centerpiece, we have to understand the difference between local farming and industrial farming.

Differences Between Local Farming and Industrial Farming

Local farming is what its name implies: small farms, often family run, that grow a variety of products that the farmers sell or distribute within a small radius. Industrial farming, too, is what its name implies: large farm “factories” that take in raw material such as fertilizer, pesticides, and fuel for machines to produce one or two food products such as corn, wheat, soybeans, or potatoes.

Chracteristics that distinguish the two kinds of farming include:

• Size
• Crops
• Crop rotation, fertilizers, and pesticides
• Markets
• Seeds
• Carbon footprint
• Lobbying
• Subsidies

Size
Local farms tend be a few hundred acres while industrial farms tend to be many hundreds or thousands of acres.

Crops
Local farmers generally plant a variety of crops. Often times, the farmers grow fruits and vegetables and also raise animals on the same farmland.

Industrial farmers plant just one, two, or three crops on their hundreds or thousands of acres. Usually, they plant only one variety of that crop, such as just Russet Potatoes. For example, as of 2007, over half of all the farmland throughout the world used to grow potatoes was planted with the Russet Burbank potato, which McDonald’s uses for its fries. (The number of acres planeted with Russet Burbank potatoes has probably increased by now, two years later in 2009.)

Potatoes grown industrially in the United States are limited to just a few. This practice seems strange when you compare it to potato farming in Canada, where they grow dozens of varieties. A few years ago, I asked my cousin, who was a potato broker on Prince Edward Island, why. He replied that the American companies find it easier to track just a few varieties. Lisa and I tasted one of the potatoes grown on P.E.I. when we attended a MacKenzie family reunion, and the taste was incredibly different — and much better — from what we were used to in the States.

Industrial farmers also don’t mix animals with plants. Either a farmer grows corn or some other crop or raises cows or some other animal. As a result, the manure produced by animals on industrial farms becomes a hazardous waste instead of a nutrient to be put back into the soil as fertilizer.

Crop Rotation, Fertilizers, and Pesticides
Local farmers tend to rotate their crops to prevent the nutrients in the soil from become depleated. They also tend to use less chemical fertilizers and more natural fertilizers. The natural fertilizers put healthy, organic nutrients back into the soil and provide nutrients that fruits and vegetables can’t get from chemical fertilizers. Local farmers also try to limit their use of pesticides or to use natural pesticides — or even none at all.

Industrial farmers usually don’t rotate crops. Instead, they raise the same crop year after year on the same soil, relying heavily on chemical, nitrogen-based fertilizers to replace the nutrients in the soil. Industrial farmers also rely heavily on chemical pesticides and insecticides. The runoff from chemical fertilizers, pesticides, and insecticides causes serious pollution problems.

Machines and Heavy Equipment

Local farmers don’t use a lot of gas-guzzling machines and heavy equipment. Industrial farmers rely heavily on planting, harvesting, and other kinds of machines.

Markets
Because their farms are small, local farmers raise just enough to sell to local and regional markets.

Because their farms are so large, industrial farmers raise far more than they can sell to local or regional markets. Consequently, industrial farmers sell their products across the country and throughout the world. They seek to open new global markets and lobby the federal government for help in opening them.

Seeds
Small farmers tend to use traditional seeds. Industrial farmers, on the other hand, use hybrid seeds to make it easier for the fruits and vegetables raised from those seeds to be shipped across the country or throughout the world. Take tomatoes, for example. Industrial farmers plant tomato seeds that will grow into tomatoes that won’t bruse when they are being transported to some distant location. Industrial farmers sacrifice flavor and quality for characteristics such as longer shelf life.

Industrial farmers also tend to use genetically modified seeds designed by chemical companies for large-scale crop production. For example, they use seeds designed to grow fruits or vegetables that can withstand certain types of herbicides or with herbicides actually inside them that can poison certain kinds of “pests.”

Carbon Footprint
Local farmers tend not to leave a large carbon footprint because they don’t use a lot of chemical fertilizers and pesticides or mechanicl equipment and deliver their crops to local and regional markets.

Industrial farmers leave a huge carbon footprint because they use fantastic amounts of chemical fertilizers and pesticides, they rely heavily on gas-driven equipment, and they transport their crops all across the country and the world.

Lobbying

Local farmers encourage consumers to try “new” products such as heirloom tomatoes and apples. Industrial farmers, on the other hand, encourage (lobby) the federal government to promote a limited number of food products for us Americans to eat. I bet you can name those products on the fingers of your hand: beef, chicken, pork, and milk. Because local farmers don’t have the money or the lobbying power of industrial farmers, government agricultural policies often favor the “big boys.”

Subsidies

Originally, the federal farm subsidy program (using our tax dollars) was designed to help small farmers. Unfortunately, the industrial farmers, through their lobbying groups, took over the program and now receive most of the money.

Even though the law limits direct subsidy payments to $40,000 per person (or $80,000 per couple), industrials farms are not husband-and-wife operations. Instead, they consist of multiple owners and interlocking businesses such as joint ventures, trusts, and venture capitalists. As a result, several individuals associated with an industrial farm can receive up to $80,000 each in tax payer money in what’s called “pass-through subsidies.”

According to the Environmental Working Group, in 2007, ten percent (10%) of the farmers eligible for direct government subsidies (funded by us tax payers) received 60% of the subsidy money — industrial farmers all!

Go figure that one out!

Lay’s “Local” Farmers

The “Lay’s Local” ad campaign deceives through omission by not giving us important information about their seven “local” farmers from five “local” farms so we can make up our own minds about whether or not these farmers are indeed local.

Brian and Gary Walther of Walther Farms in Three Rivers, Michigan
What Lays wants us to know about Walther Farms is that:

• The Walther family has farmed potatoes for three generations.
• Walther Farms has been selling their potatoes to Frito-Lay to be made into Lay’s Potato Chips since 1975.

What Lays doesn’t want us to know about Walther Farms is that the farm — which Brian and Gary’s grandfather, Leonard Walther, Sr. began in the 1940s as a hobby growing vegetables on a few acres of land — has grown into a 14,000-acre “potato farming giant.” This giant farm actually consists of farms located in six states and in one foreign country (which their web site doesn’t mention):

• Michigan
• Florida
• Georgia
• Indiana
• Illinois
• Texas
• Mexico

Walther Farms employs between 50 and 100 people and has annual sales that range from $5 million to $9 million.

In the mid-1970s, the Walthers began producing a single crop: potatoes. In 2008, when they had only 8,000 acres in six states, Walther Farms sold 85% of those potatoes — 400 million pounds — to Frito-Lay to be made into potato chips. The remaining 15% they sold as cooking potatoes to large stores such as Wal-Mart and Meijers. Now that Walther Farms has expanded into northern Mexico, the amount of potatoes they produce will increase.

On March 16, 2009, the Walthers auctioned off their original family farm (no nostalgia lost there!) as part of a sale of over 784 acres because of their increasing focus on growing potatoes. According to Jason Walther, who is Walther Farms Chief Operating Officer:

Grandma and Grandpa always believed in putting the land to its best possible use, and we’re following the same strategy by putting this excellent land in the hands of people whose focus is on crops such as sugar beets, soybeans, corn and wheat, for which the soil types are best suited.

The land they auctioned included Grandfather Leonard’s farm plus six others, which were on “high-quality farmland.” Some sites were considered good for recreational, commercial, and residential development. The Walthers auctioned the land in 27 tracts that range in size from 1.2 to 228 acres. The reason the Walthers are selling the farms is because the their land is clay, which isn’t good for growing potatoes. (Potatoes like sandy soil.)

The sale of the original family farm makes sense, though, because the Walthers no longer consider themselves a family business. Quoted in MiZib.com, Jason Walther said that

Looking at us structurally, we would look like any other organization — not a family business. Sure there is a family culture, but (we) run it like a business … and that gives us a competitive advantage.

Like owners of many industrial farms, the Walthers collect farm subsidies provided by US tax payers — you and me — in the form of pass-through subsidies. According to the Environmental Working Group’s Farm Subsidy Database, between 2003 and 2005, ten Walther family members — three generations of Walthers — received $237,857 in pass-through subsidies for their multi-million dollar business.

Walther Farms also belongs to the United States Potato Board (USPB), a nonprofit marketing group of 4000 commercial potato growers whose members seek to increase national and international demand for their potatoes.

Darrell McCrum of the Maine Potato Alliance in Mars Hill, Maine
What Lays wants us to know about Darrell McCrum of the Maine Potato Alliance is that:

• The McCrums have farmed potatoes for five generations.
• McCrum has been selling his potatoes to Frito-Lay to be made into Lay’s Potato Chips since 1986.

What Lays doesn’t want us to know about Darrell McCrum is that he not only belongs to the Main Potato Alliance, but also co-owns Country Super Spuds in Mars Hill — the largest potato farm in Maine. His farm owns almost 6,000 acres of potato farmland. Every year, he grows potataoes on over half of that land — 3,500 acres. McCrum’s co-owners include his brother, father, and two uncles.

Country Super Spuds — consists of three subsidiaries:

• Sunday River Farms, which grows the potatoes
• JDR Transport, which takes the potatoes to food processors
• Penobscot McCrum, LLC (formerly Penobscot Frozen Foods, Inc.), a processing company that turns potatoes into frozen potato products such as baked potato skins, potato wedges, flavored stuffed potatoes, and specialty items (such as potato rounds, baked Maine potatoes, and baked Maine potato pancakes)

Country Super Spuds’ takes in somewhere between $35 million to $40 million per year.

In an interview in mainebiz.biz, McCrum, who is Country Super Spuds’ Manager of Northern Maine Farm Operations, said that over the past several years his business has increased between 11-18% per year. One reason for the increase is because McCrum constantly uses new technology to reduce the number of farm workers he hires from an estimated 150 during harvest season to around 60.

For example, by purchasing two harvesters for $600,000, McCrum replaced all harvest workers except for the two workers needed to run the machines. The harvesters also can harvest 20 rows of potatoes at a time, which decreases the time it takes to harvest the potatoes. And McCrum also bought a potato grader that automatically sorts good potatoes from bad ones. McCrum also uses GPS in his tractors to they can plow straighter rows, which reduces wastage because of sunburned potatoes.

I expect another reason for increased revenues is because the McCrums cut out the middle man by forming JDR Transport in 1992 and by buying Penobscot Frozen Foods, Inc. in 2004 for $1.8 million. The plant is located near the Canadian border.

Both Country Super Spuds and Penobscot Frozen Foods belong to the USPB.

According to the Environmental Working Group’s Farm Subsidy Database, between 2003-2005, Darell McCrum received $702 in pass-through subsidies from U.S. taxpayers for his multi-million dollar business — one of the lowest amounts received by the farmers featured in the “Lay’s Local” ads.

Brian Kirschenmann of Kirschenmann Farms in Bakersfield, California
What Lays wants us to know about Kirschenmann Farms is that:

• Brian Kirschenmann’s family has been growing potatoes for five generations.
• Kirschenmann Farms has been selling its potatoes to Frito-Lay to be made into Lay’s Potato Chips since 1974.

I had a lot of trouble finding additional information about Brian Kirschenmann and Kirschenmann Farms than what the “Lay’s Local” ads provide. But I did find some.

Kirschenmann Farms is family owned and the Kirschenmanns produce potatoes on 4,500 acres. In 2002, when Western Farm Services sprayed the potato and carrot crops on Kirschenmann Farms, a cloud of pesticide drifted into nearby Arvin, a community of immigrant farm workers, making hundreds of them sick. The state fined Western Farm Service $60,000 for carelessly spraying the fields. Dissatisfied with the settlement, the residents sued.

In late 2005, the parties reached a settlement for $775,000, which was one of the largest settlements ever made. Of that $775,000, Kirschenmann Farms agreed to pay $275,000 and Western Farm Services the rest.

According to the Environmental Working Group’s Farm Subsidy Database, between 1995-2003, Kirschenmann farms received $123,776 in farm subsidies from U.S. taxpayers.

Kirschenmann Farms also belongs to the USPB.

Jack Wallace Sr. and Jack Wallace Jr. of Jack Wallace Farms in Edinburg, Texas
What Lays wants us to know about Jack Wallace Farms is that Jack Wallace father and son have been selling their potatoes to Frito-Lay to be made into Lay’s Potato Chips since 1964.

Information about the Wallaces and Jack Wallace Farms was even more difficult to find that for Kirschenmann Farms.

But I did learn that Jack Wallace Farms, Inc. takes in around $1,200,000 a year and employes around 10 people.

However, I did find some information about J.W. Farms, Ltd., which is located at the same physical address as Jack Wallace Farms, Inc.: 1103 McKee Drive, Edinburg, Texas 78539. This farming company takes in between $1,000,000-$4,999,999 a year and employees between 1-5 people. I assume this farming operation doesn’t grow potatoes, but crops such as cotton, peanuts, and corn.

According to the Environmental Working Group’s Farm Subsidy Database, both Jack C. Wallace and Jack C. Wallace, Jr. of J.W. Farms, Ltd. received farm subsidies from U.S. taxpayers. Between 2003-2005, Jack C. Wallace, Jr. got $355,356 in pass-through subsidies.

J.W. Farms also belongs to the USPB.

Steve Singleton of Singleton Farms in Hastings, Florida
What Lays wants us to know about Singleton Farms is that the family has sold potatoes to Frito-La since 1982.

Steve Singleton farms 800 acres and says that “We grow potatoes in Florida and Lays makes potato chips in Florida. It’s a pretty good fit.”

Other than that, I could find absolutely no information about either him or Singleton Farms. I did find listings for three Singleton and Sons Farms, one of which is in Hastings, Florida. I don’t know if they are separate entities or parts of the same operation run by members of the Singleton family. Your guess is as good as mine.

Conclusion — Are Lay’s Potato Chips Local?

In their “Lay’s Local” marketing campaign, the Frito-Lay marketers created five stories about the “local” farmers who grow the “chip-stock or chipping potatoes” used to make Lay’s Potato Chips. The marketing people think that if we get to know these farmers as people, we’ll get to like them. And if we get to like them, we’ll probably buy more Lay’s Potato Chips.

But just because an ad campaign tells us a story doesn’t make the story true. The best way to determine whether these farmers are really local is to see how well they follow the four stages of local food production mentioned in Part 2:

• Growing
• Processing
• Distributing
• Consuming

With the three farmers from the last three farms, we don’t have enough information to make hard conclusions. But I think we can extrapolate. After all, if they’re producing potatoes for a huge company like Frito-Lay, their operations must be fairly similar to those of Brian and Gary Walther Farms and of Darrell McCrumb.

Growing
Every farm is “local” if you’re living near it. However, the farms belonging to the farmers in the “Lay’s Local” ad campaign are mostly huge industrial farms. From size to crop rotation to fertilizers and pesticides to machines and heavy equipment to subsidies, they display many of the characteristics that distinguish industrial farming from local farming.

For example, Walther Farms consists of individual farms (which allows the owners to collect farm subsidies) in six states and one foreign country that grow potatoes on 14,000 acres. In 2008, Walther Farms had only 8,000 acres in six states, they produced 400 million pounds — that’s 200,000 tons — of potatoes for Frito-Lay. Those potatoes represented 85% of their entire crop. The remaining 15% they sold to big-box stores, which sold them for cooking.

Country Super Spuds consists of three subsidiaries, one of which is Sunday River Farms — the largest potato farm in Maine. (Personally, I don’t know why the “Lay’s Local” marketers associated Darrell McCrumb with the Maine Potatoe Alliance, unless they hoped we’d have a more “down home” feel from the term.)

Anyhow, Sunday River Farms grows potatoes on 6,000 acres. I don’t know how many of those potatoes they sell to Frito-Lay, but it must be a lot or Frito-Lay wouldn’t be buying from them. Manager of Northern Maine Farm Operations Darrell McCrumb is relying more and more on machines to increase both production and profit — and also to decrease the number of farm workers he uses. To me, decreasing the number of workers decreases the amount of money going back into the local economy. That’s hardly a local value.

McCrum, though, does appear to be leaving around half of his potato land fallow each year.

Kirschenmann Farms grows potatoes on 4,500 acres and uses pesticides.

Some of these farms take in a million or more dollars a year (and also tax payer farm subsidies) — hardly a small amount of money.

Processing
Frito-Lay does receive chipping potatoes from nearby farmers and makes the potatoes into Lay’s Potato Chips at processing plants in 18 states across the country. So Lay’s Potato Chips are, indeed, made locally.

Distributing
Frito-Lay does appear to distribute its potato chips locally — as you can find out using their Chip Tracker.

Consuming
Perhaps the most important aspect of buying local is that the money you spend buying local products stays in your community. And here is percisely where the “Lay’s Local” claims for being local fall apart. These seven farmers don’t send their chipping potatoes to locally owned processing plants, but to ones owned by Frito-Lay whose corporate headquarters are in Plano, Texas.

Moreover, when the Frito-Lay plant makes the potatoes into Lay’s Potato Chips, the money the grocer pays for them does not remain in the farmers’ communities or even regions, but goes to Frito-Lay corporate headquarters in Plano, Texas.

And when Lay’s Potato Chips are sold, who sells them? Mostly regional and chain stores such as Wal-Mart, Meijers, and Target. True, if the store happens to be locally or regionally owned, the money does stay in that locality or region. But if the store is a multi-state or national chain, the money goes to corporate headquarters.

Just to be fair, I should say that Darrell McCrumb seems to be more local than the other farmers because he does have his own transportation company, which he might or might not use to ship his potatoes to the local Frito-Lay processing plant. He also has his own processing plant, which makes frozen potato foods — not potato chips. Because of his transportation company and his processing company, McCrumb does keep some money within Maine.

So let’s decide: Are the five “Lay’s Local” farmers really local? Yes and no. Yes, because they are members of their communities and — for the multi-farm farmers — at least one of their farms happens to be in or near the community in which they live. No, because the farmers are industrial farmers.

Are Lay’s Potato Chips local? Not really. The potatoes might be grown locally, but they’re not sold locally. An international corporation in Plano, Texas buys them. And even though the processing plants are physically near the farms that produce the potatoes, those plants are owned by Frito-Lay in Plano, Texas. And while local people might work in those plants, the profits made go to Frito-Lay in Plano, Texas. When it comes to selling his potatoes to Frito-Lay, even Darrel McCrumb isn’t local.

“Lay’s Local” is a deceptive marketing campaign that Frito-Lay marketers devised to sell more Lay’s Potato Chips.

In Part 4, I’ll tell you the dirty little secret that Frito-Lay doesn’t want you to know.

See also:

• The Truth about Frito-Lay’s “Lay’s Local” Marketing Campaign — Part 1
• The Truth about Frito-Lay’s “Lay’s Local” Marketing Campaign — Part2
• The Truth about Frito-Lay’s “Lay’s Local Marketing Campaign — Part 4: Frito-Lay’s Dirty Little Secret
• “Lay’s Local” Update — They Just Don’t Seem to Get It

Tags: Lay's Local, Lay's Potato Chips, local food, locally grown, potato chips

This entry was posted on Tuesday, July 14th, 2009 at 3:35 pm and is filed under PR & Marketing. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.