Allied Potato success story

Justin Woodward, Key Equipment Finance, September 2022

<p>Allied Potato success story</p>

Automation financing solutions in several areas from field to processing have helped Allied Potato become more responsible stewards of the environment. The potato grower recently invested in technology to increase water efficiency in water and nutrients at its California and Washington farms. What type of return on investment (ROI) could they anticipate from these initiatives?

Challenge

The growth-oriented Allied Potato organization specializes in exporting chipping potatoes from California and Washington and is a firm believer in the benefits of automation. Water conservation, increased potato quality, and increasing labor efficiency by streamlining operations in the processing shed are primary goals for this international potato shipping organization.

“We are always looking for ways to be more efficient and increase quality on the farm,” said Jason Davenport, founder and president of Allied Potato. Davenport is a fifth-generation farmer who, in addition to being the founder and president of Allied Potato, currently serves as chairman of the board for Potatoes USA.

“Agriculture is the backbone of societies across the world,” Davenport said. “But several factors are forcing farmers to change their approach. With the global population expected to peak at 9.7 billion by 2050, experts predict worldwide production must increase by 70% within the next 30 years.” Smart water usage is imperative, given the climates found in California and Washington. Allied Potato wanted to reduce or eliminate wasted water from inefficient irrigation systems on its California farm. They needed an updated system, and the Certa-Set PVC piping system was an ideal option, especially compared to less efficient wheel lines and aluminum pipes that require frequent maintenance.

“The entire Allied Potato team is extremely proud of seeing our equipment and knowing that we put this type of investment into the farm. We’re building employee morale, and also demonstrating that we care about our environment and place great value in our customers. We all win.”

Jason Davenport, founder and president of Allied Potato

Additionally, the company wanted to improve the harvesting and planting system of its Washington farm by planting at a higher density to grow more potatoes per acre, and a sophisticated new bed planter would help achieve that growth. The new planters allow for higher density planting to withstand high heat with canopy coverage that protects the potatoes in the ground. The end results are more potatoes and less waste due to crop rot.

The Certa-Set system and the new planter beds are costly investments and the potato company wanted to prevent a large cash outlay.

Solution

The perforated Certa-Set PVC pipe, with purposeful and planned leaks similar to a drip line, manages and uses all water. The $1.4M automation investment has a planned ROI of 10 years, and the $4M bed planter improvement achieved an ROI of less than one year. Both investments allow Allied Potato to reduce wasted water and crop rot in the field, increase labor efficiency in the processing shed, and reduce recurring maintenance costs.

“We see a 6" or half-acre foot improvement on water use efficiency on the farm with this new Certa-Set system, compared to aluminum,” noted Davenport. “The new bed planting system helped us achieve a 15% increase in yield, and I estimate we’ll see a 30% increase in quality, leading to higher efficiencies in the processing shed, as well as reduced claims from overseas customers.”

In addition to drastically reducing wasted water, Allied Potato reduced the crop loss that often comes from oversaturation and rot from water leakage and high heat conditions. Labor teams are more efficient in the processing shed because there are less rotten potatoes to remove. Maintenance costs are reduced, as well, when compared to aluminum piping irrigation methods, which are prone to damage.

“Overall,” Davenport said, “we’ve realized a big improvement in efficiency with less nutrients being leeched out of the soil due to overwatering.”

“The new bed planting system helped us achieve a 15% increase in yield, and I estimate we’ll see a 30% increase in quality, leading to higher efficiencies in the processing shed, as well as reduced claims from overseas customers.”

Jason Davenport

Results

“Justin and his Key Equipment Finance team made it easy for us to produce the same amount of goods with less natural and labor resources,” said Davenport.

Allied Potato plans to reinvest the savings they gained from these environmental investments into more Certa-Set piping and bed planter systems.

Davenport advises other farming organizations that seek to conserve natural resources through automation investments to find a lender that is a good communicator, experienced in ag lending and shows interest in their particular ag project.

“We’ve worked with Key Equipment Finance for years and they clearly value our time and work to make the process as efficient and painless as possible for us,” said Davenport. “They actually make it an enjoyable process for us, by asking for exactly what they need, and being honest with us at all times. Key Equipment Finance is a vital and helpful institution for Allied Potato.”

For more information, contact:

Justin Woodward

This document is designed to provide general information only and is not comprehensive nor is it legal, accounting, or tax advice. KeyBank does not make any warranties regarding the results obtained from the use of this information. Credit products are subject to credit approval, terms, conditions, and availability and subject to change. Key Equipment Finance is a division of KeyBank. Key Government Finance is a subsidiary of KeyBank. Key.com is a federally registered service mark of KeyCorp.

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