PRESQUE ISLE – Three weeks after potato farmers rejoiced over an arbitrator’s decision in their favor in negotiations with potato-processing giant McCain Foods, the mood has turned glum.

On April 12, the two sides signed a deal that is 39 cents per hundredweight less than what an arbitrator had approved April 1.

On top of that, McCain could be cutting the volume of potatoes it uses at its french fry plant in Easton by 15 percent to 18 percent, according to an official with the Maine Agricultural Bargaining Council.

“We suffered the consequences, and we’re still getting the cut in volume,” said Vernon Delong, executive director of the ABC. He added that farmers were “depressed” by the turn of events, but had little choice but to take the reduced deal.

The bargaining council represents more than 330 farmers in Maine, most of them in Aroostook County.

The ABC had asked for a 50-cent hike over last year’s contract base price of $4.01 per hundredweight to $6.14 per hundredweight of potatoes delivered from the field to McCain’s processing pant in Easton. McCain had offered a 10-cent increase.

Arbitrator David Plimpton gave a thumbs up to the ABC proposal, noting in his decision that “the ABC final offer was more fair, equitable and reasonable than the McCain final offer.”

Despite Plimpton’s ruling, neither side was obligated to go along with the decision. The negotiating parties were free to sign it, but they didn’t have to use it and were at liberty to work out other deals either together or individually with farmers.

According to Delong, McCain officials told him the company had no intention of implementing the arbitrator’s decision in contracts with ABC growers.

That, coupled with strong rumors circulating that McCain also was going to reduce its required potato volume by 40 percent only added to the nervousness of the growers, Delong said.

Concern that they wouldn’t have contracts and might lose volume prompted growers to go back to the table.

“The growers couldn’t take the pressure,” he said. “Growers have debts, and they’ve pretty much got to have a contract to stay in business.

“We thought we deserved better and the arbitrator thought we deserved better. We prevailed in arbitration, but the growers couldn’t go without a contract.”

Farmers and lending institutions both like contracts because the grower knows even before planting that there is a market for the crop. That, in turn, serves as collateral for loans for seed, fertilizer and machinery.

Delong added that over the last few years, growers have made contract concessions to McCain while at the same time upgrading equipment, storage facilities and crop management to help the company meet quality needs. Because of that, farmers felt they were entitled to an increase in the contract base price this year.

During arbitration hearings in March, McCain representatives argued that they couldn’t pay the base contract price sought by ABC growers and still remain competitive in the eastern U.S. fast-food market.

Frank van Schaayk, president of food services for McCain Foods USA, said Monday during a telephone interview that the final deal worked out with ABC on April 12 was “the contract that was best in the economic relationship.”

He added that the settlement with Maine farmers was about equal to contracts made with growers in other parts of the country.

The fact that demand for french fries is down worldwide was a factor in the final negotiations, but Van Schaayk said McCain tried to be fair.

“Demand is soft, but we’re working hard to give the growers the volume they need to run their businesses,” he said. “We’re in this together.”

He said a final decision had not been made on the volume of potatoes that will be needed this year.

Donald Flannery, executive director of the Maine Potato Board, said the outcome of the ABC-McCain deal, or any reduction in volume contracted by McCain, is not likely to have a major impact on the number of acres planted in the state. Last year, 62,000 acres of potatoes were planted, a number that probably will stay the same this year, he said.

Flannery said the key to getting better prices to farmers was to keep planted acreage down, not only in Maine but also across the country.

“It’s simple economics: supply and demand,” he said, noting that it applies to farmers who grow potatoes not only for french fries, but also for table use, chips and seed.

“We have some concerns for all our industry,” he said. “We have to get money back to our growers.”