After 30 years in the business, Irish Eyes Garden Seeds will be wrapping up operations this season.

Irish Eyes began in 1989 with seven acres in the Badger Pocket area East of Ellensburg. Since then, the family-run business has expanded to 275 acres, all of which were converted to organic farming practices in 2002. The company, which has 21 employees took its sales nationwide in 2016 and invested in new packing equipment approximately a year ago that allowed seed potatoes to be packaged in smaller increments with individual UPC labels. The company specializes in unique varietals of seed potatoes and garlic targeted at home gardeners, with at least 15 potato varietals being proprietary to the company. The company also operates a packaged seed products division, comprising approximately 30 percent of annual sales.

Owner Greg Lutovsky said troubles began for the company when Initiative 1433 was passed in fall 2016, incrementally raising the minimum wage throughout the state over a four-year period. He said at that time they met with their accountant to talk about the future of the company.

“He did some market analysis,” he said. “He went over our expenses, and when we met with him, he told us within three years we were going to be out of business.”

Lutovsky said the increased minimum wage had a profound effect on labor costs, as well as the ability to keep margins competitive within the industry.

“There’s just not that much margin there in seed potatoes,” he said.

Other states that have commercial seed operations have much lower minimum wages, and Lutovsky said that allows those companies to keep their margins the same and not raise prices.

“That’s been the problem for the last three years,” he said. “We just can’t compete anymore. If we did jack them up to where we need to be, it would put us so far out of the market that people would go to Colorado. They’d go to Idaho. They’d go to Montana. They’d just find their stuff elsewhere.”

Despite the concerns of his accountant, Lutovsky said he felt like there ways to get out of the jam.

“Being stubborn, I thought that we could make some cost-cutting-type things,” he said. “Cutting employees. We invested every dime into trying further mechanize and get rid of labor.”

Other issues compounded Lutovsky’s problems with keeping the business afloat. A federal rule that was enacted in December 2017 required truck drivers to keep electronic logs their duty status. He said the requirement, along with rising fuel costs resulted in shipping prices going up exponentially for the business.

“That’s hard to absorb,” he said. “We were getting loads for $800 out of Southern Idaho. All of a sudden they are $2,200 to $2,400 a load.”

Heavy wildfire smoke during the previous two summers also resulted in crop failures. 60 acres of seed potatoes saw a 50-percent reduction in crop yield in summer 2016, resulting in the loss of approximately 400,000 pounds. Approximately 90 acres of garlic and potatoes failed in summer 2017.

To make matters even worse, a customer cancelled half of an $800,000 order. Lutovsky said this put the company in an even more precarious position.

“We had already purchased all the garlic,” he said. “We already had all the materials. We had already done all the labor and nobody to sell it to because they waited until the end of the spring, and it’s perishable. There was not a lot we could do except bite the bullet on that.”

Lutovsky said his network of customers was caught off-guard by the decision to close.

“Pretty much all of them are shocked and devastated,” he said. “Most of them were very supportive. A lot of them have become friends over the last 30 years of providing them with product. I guess they think you’re going to be here forever, I guess.”

ATTEMPTS TO SELL

Lutovsky attempted to sell the business over the last three years, with three deals falling apart for various reasons. As a result, an auction will be held by Chuck Yarbro Auctioneers on May 17 mainly focusing on equipment. An online auction will be held on May 21-22 that will include items such as office equipment, seed inventory and intellectual property. Lutovsky and his family will continue to sell items such as seed potatoes and garlic through the rest of the season ending in the fall. After that, the brand and all associated operations will convert to the new owner. Lutovsky said he’s been told by Yarbro that the auction has gained an above-average amount of attention from bidders.

“They’ve had more calls on this auction than they’ve had on any auction in the last several years,” he said. “He said he’s had a lot of interest in the label.”

Lutovsky said he does not expect a buyer to keep the business local, and that it would most likely be relocated elsewhere. He has transferred the lease on his 270-plus acres to a farmer who intends on growing organic alfalfa for the dairy industry. The family, however, will maintain some of the buildings, with Lutovsky’s daughter Alexa using them in a new business salvaging organic heirloom blueberry plants from the West Side.

“She has a contract with a farmer that is very old,” he said. “The plants are actually detrimental to selling his land because of the cost to remove them, so she came up with an agreement and she’s buying all the plants on a contract. I’m helping her on the weekends and she’s doing all the sales and the website and everything.”

As for Lutovsky, he plans to focus on helping his daughter with her new business, as well as helping his wife in her CBD cream business. He acknowledged the change will be hard for him.

“I’ve been doing this for 30 years,” he said. “It’s kind of like cutting my leg off with a chainsaw. It becomes who you are and how you’re identified. I’ve been identified as a potato head, spud, tater, whatever for 30-some years.”

Despite getting out of the business, Lutovsky said the family is very proud of being a part of local agriculture.

“All the people that we’ve fed, the millions of people we’ve taught how to garden and helped them feed themselves, we did a lot of work here in the last 30 years,” he said.

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