(Jan. 24) BLANCA, Colo. — Jerry Smith sees the latest potato stocks report from the U.S. Department of Agriculture as positive news.
The report estimates Jan. 1 stocks from the 15 major potato states at 232.1 million cwt. That’s just 3% above last season, when shippers saw record high pricing for crops, said Smith, president of shipper Blanfort Inc.
But so far this season, the trend for higher markets hasn’t kicked in.
The USDA reported Jan. 21 markets for cartons of size 70 San Luis Valley russets at $7, compared to $11 last season.
“I really feel the market should have responded more by now than it has, but I guess we’ll wait and see,” Smith said.
The USDA reported Jan. 21 f.o.b.s for 50-pound cartons of size 70 Idaho russet burbanks at $8.50, compared to $12.50 the same time last year.
“I’m still optimistic that we’re going to see (a rise in the market) this season,” said Kevin Stanger, vice president of marketing for Wada Farms Potatoes Inc., Idaho Falls, Idaho. “I just don’t know when.”
Some shippers say markets could rise this spring once the industry more clearly sees the demand for processing potatoes.
If the USDA’s Jan. 21 cold storage holdings report were any indication, the shippers might have hope.
The USDA reported total cold-storage holdings as of Dec. 31 at 1.13 billion pounds, compared to 1.24 billion the season before. Of that, potatoes for french fries were at 871.4 million pounds, compared to 1 billion last season.
Still, even with lower markets this season, some shippers say movement has been stalled.
“We’re dead here as far as business the last two or three weeks,” said Walt Okray, salesman and traffic manager for Okray Family Farms Inc., Plover, Wis.
In the near future, movement could still be off. February notoriously is a very slow potato month, Okray said. March is when the market tends to move again, he said.
The USDA showed movement to date for Washington and Wisconsin behind the same time last year. Idaho and Colorado were both ahead.
Colorado’s Jan. 1 stocks were 33% above last year, according to the USDA. Idaho’s stocks were reported at 6% above last year.
Chris Voigt, executive director of the Colorado Potato Administrative Committee, Monte Vista, said the San Luis Valley saw higher yields this fall, with 390 cwt. per acre compared to 315 cwt. for the previous season’s crop. Still, he said, a higher percentage of oversized potatoes would divert many to processing, he said.
Okray attributed weaker markets this season partly to psychology.
“Perception in this business usually dictates what it will be,” he said of the market.
Last season, Okray said, many shippers were losing money and going out of business after four or five years of depressed pricing. That fear drove them to get bullish with the lower supplies they had. This year, people went back to the old pattern of decreasing prices when movement slowed down.
“It’s like we didn’t learn anything,” he said.
Despite lower markets this winter for storage russets, the California fresh deal was in a league of its own, said Dennis Francis, sales manager for DM Camp & Sons, Bakersfield, Calif. He reported f.o.b.s for 50-pound cartons of white As at $14, reds $10 and yukons $14. Harvest should move from the Bakersfield area to the desert in late February and early March.
Shippers in Idaho and Colorado already are looking toward next season’s production. Stanger, noting a lack of snowpack, said Idaho’s water tables are extremely low. Smith noted the same for Colorado, saying that more snowfall was needed to recharge the region’s aquifers.
“We are definitely in this valley very water short,” he said.