COMMODITIES: The Great Potato Bust

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Simplot concedes that he was "sucked in" by the market's upswings and sold a lot of contracts in the $19 and $16 range. Says he: "They got things up awfully high. I never sold at such high prices before." He bought back some of the contracts as the market declined, making a profit. But he did not try to make any big purchases until the May 7 expiration, hoping the price would decline even more. On that day, he made an offer of $8, but contract trading stopped at $8.70.

He then began to scramble for potatoes, which he knew he would have to deliver by last week. With offers of cash and his own stock of potatoes, he managed to settle some of his contracts. For the rest, he sent agents to Maine's Aroostock County, heart of the state's potato business, to try to round up spuds from farmers with cash offers of $6.50 to $8. There were a few takers, but most of the Maine farmers balked because they had received other offers as high as $15 from export agents—some of the longs, who were trying to force Simplot into paying a higher price to get out of his contracts.

At week's end Simplot was huddling with exchange officials and telephoning Harold Collins, head of an upstate New York produce company and a major holder of unfulfilled contracts, to see if a compromise price could be worked out. Simplot offered Collins $10 to buy back his contracts, but Collins wanted $12.50. If they cannot agree, the exchange will decide a fair price for them and thus settle by fiat the great potato battle of 1976.