Open market storage potato prices have tumbled by nearly half since early June, and Northwest potato market sources said the temporary closure of the Mexican potato market and expectations of an early fall crop may have contributed to the slide.
Average shipping point prices for 50-pound cartons of Idaho russet burbank 50-count potatoes dropped from an average of $15.13 per carton on June 7 to $8 per carton by July 5.
“People felt like they were going to have new crop on top of their old and they didn’t want that to happen so they tried to hurry and force product on the market,” said Gary Garnand, owner of Garnand Marketing LLC, Twin Falls, Idaho.
The market for open market potatoes in Idaho seems to have stabilized by July 8, said Patty Willkie. officer in charge of the Idaho Falls, Idaho. U.S. Department of Agriculture Market News office.
Compared with potatoes sold at contract prices, Willkie said open market f.o.b. potatoes may now represent a minority of the volume in Idaho. However, some contract prices are based on “middle of the mostly” open market f.o.b. price, she said.
Growers typically hold on to some potatoes hoping to catch a late season spike in prices, she said. Last year, the average price for 50-pound cartons of Idaho russet burbank 50 count potatoes rose from $10 per carton on June 1 to $13 per carton by July 6 and $18.50 per carton by Aug. 3. The rally hasn’t showed up so far in 2014, and the expected early harvest start for fall potatoes may be the reason.
There may be some overlap between old and new crop potatoes in Idaho and Washington, Garnand said July 8.
Idaho’s storage russet burbank potatoes are typically finished by mid-August, and the first new crop russet norkotahs usually start about Aug. 15. This year the gap in supply between old crop and new crop probably won’t happen.
The new fall crop of potatoes could be a week or more ahead of schedule in some regions, he said.
About 90% of potato sheds in Washington will be marketing russet norkotahs by the week of July 21, Garnand said. Meanwhile, Idaho potato sheds may begin to ship new crop russet norkotahs by the week of Aug. 4, which Garnand said is about two weeks earlier than 2013.
Russet burbank harvest typically doesn’t start until after Labor Day, and often not until mid-September.
“We’re earlier this year, and if this heat doesn’t set us back, we will probably be closer to Labor Day on the burbanks than we normally are,” Garnand said. Shippers can’t put potatoes in storage until after Labor Day because the weather is too hot, he said.
Mexico’s suspension of U.S. potato imports on June 9 — partially lifted July 7 — caused market disruptions, Garnand said. “In Washington and Colorado (Mexico’s action) was a big deal and put more of their product on the market,” he said. Exports to Mexico typically account for about 10% of the volume from those two states, so trouble with that export market causes more supply to be marketed to the U.S. market.
The USDA June 17 potato stocks report showed that 13 major states held 46.5 million hundredweight of potatoes in storage as of June 1. Because of sequestration cuts that eliminated crop reports last fall, the stocks numbers can’t be compared with 2013. The June numbers showed that stocks were up 7% from two years ago, and represent about 12% of fall storage states’ 2014 potato production.
Garnand said the inability to compare stocks with last fall has frustrated the industry. “You don’t have a valid comparison so all you can look at is the 2013-14 crop,” he said.