Black Friday and dark days for potatoes - The Packer

Black Friday and dark days for potatoes

11/09/2012 09:47:00 AM
Tom Karst

National Editor Tom KarstNotwithstanding the Black Friday ad for Wal Mart, the hottest piece of fresh produce news this morning is the USDA's fall crop production estimate for potatoes.

It is a less thrilling version of Black Friday for the potato industry. The report shows that fall potato output is 422 million hundredweight, up from 391 million cwt. in 2011. Both projected yields and acreage are up, the USDA estimate reveals. Yields of 426 cwt. per acre are up from 416 cwt. per acre a year ago, and fall potato acreage in the U.S. is 991,500 acres, up from 939,000 acres a year ago.

The big production numbers are reflected in weak f.o.b. markets, with 50 pound cartons of 40 count to 70 count Idaho russet Burbank potatoes at $5.50 to $6 Nov. 8. That compares with about $10 per carton the same time a year ago and $15-16 per carton the same time two years ago. Retail pricing of potatoes should provide plenty of strong bargains for consumers for months to come.

The USDA reports the weighted average price of 10-pound bags of russet potatoes advertised in retail stores the week of Nov. 2 was $2.91, down from $3.50 per 10-pound bag at the same time a year ago.

Check out  a few blog posts from Jerry Wright of United Potato Growers of America about the current plight of the potato market and what can be done to fix it (next season).

Confidence in the ability of the United Potato Growers to control acreage is under some doubt in the wake of a December 2011 court ruling. From The Packer's archives, reporting by Andy Nelson in December 2011:

The Capper-Volstead Act does not protect United Potato Growers of America from charges it illegally reduced the supply of potatoes in order to raise prices, according to an Idaho judge's ruling in an ongoing case.
But United Potato's president said that, despite reactions to the contrary, the ruling "is not a negative."   A lawyer who counsels the co-op is optimistic the judge's mind can be changed on the issue before the end of the trial.
In a Dec. 2 ruling, U.S. District Court of Idaho judge Lynn Winmill rejected Salt Lake City-based United Potato's motion to dismiss a suit brought against it by Jamestown, N.Y.-based Brigiotta's Farmland Produce and Garden Center Inc.
The court did, however, dismiss charges against several individual grower-shippers who were co-defendants in the case.
Tom Galbato, Brigiotta's co-owner, would not comment on the ruling.     In its complaint, filed in 2010, Brigiotta's accused United Potato of "classic cartel behavior" to control potato supplies and fix prices at artificially high levels.
In its motion for dismissal, United Potato argued that its practice of limiting U.S. potato acreage in order to strengthen markets is protected under the Capper-Volstead Act, which provides agricultural cooperatives limited exemption from federal antitrust laws.
Winmill ruled United Potato had no basis to make that claim.
"There are no cases where a court has concluded that Capper-Volstead immunizes cooperatives and their members who seek to collectively implement production controls in order to raise prices," Winmill wrote in the ruling.   "The individual freedom to produce more in times of high prices is a quintessential safeguard against Capper-Volstead abuse."

TK: There has been no final judgment on the lawsuit, and one lawyer connected with the case said the "discovery" phase is ongoing. It will be telling to see if the United Potato formula for managing the nation's potato crop will be revived after this dark season, provided the legal challenges to the coop are successfully answered.

On a related industry note, here is coverage of the passing of noted potato expert Robert Kunkel.



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