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Oregon Potato bankrupt

PORTLAND? Oregon Potato Co. has filed for bankruptcy just as farmers in eastern Oregon and Washington are preparing to harvest their spring crop.

But the Boardman food processing company also has filed a reorganization plan it hopes will keep its plants operating in Boardman and in Warden, Wash.

If they restart, that sigh of relief you hear will be the potato industry, said Dale Lathim, executive director of the Potato Growers of Washington in Othello, Wash.

Oregon Potato, which operates as Washington Potato Co. in Warden, is one of the major producers of dehydrated potatoes in the Columbia River Basin. Only a few other companies make similar products such as potato flakes, flour and frozen diced potatoes for use in soups, pot pies and vegetable mixes.

City officials in Boardman and in Warden say they fear the reorganization plan will fail, damaging the already fragile local economy.

I can't tell you how devastating it will be for our town, said Warden Councilman Raul Diaz.

Oregon Potato on Wednesday said it had filed for a Chapter 11 reorganization in U.S. Bankruptcy Court in Portland.

The company said it had a commitment from General Electric Capital Corp. for financing that would include up to a $2 million advance and working capital of up to $10 million, but owner Walter Reid declined to comment further.

The Tri-City Herald in Kennewick, Wash., obtained a letter Reid sent last week to his excellent customers in an attempt to answer questions about the company's situation.

In the letter, Reid said the company has spent the last two years upgrading its plants to keep up with business growth and become more efficient.

This all takes time and a lot of money, Reid wrote. Our growth has outpaced the capability of our banking relationship.

Reid said several factors have made everything more difficult in recent weeks, but that it is our full intent to continue growing our business.

Already this year, Columbia River Basin farmers were hobbled by a much larger-scale bankruptcy in the seed industry when AgriBioTech of Nevada filed for Chapter 11 protection and raised the likelihood of millions of dollars of farm losses.

Oregon Potato is much smaller, but still has an important role in Northwest agriculture, Lathim said.

While they are a small player in the big picture, their existence is very important to the balance of the industry, Lathim said.

The North American Potato Market News, a trade publication, said growers face low prices and oversupply this year.