Potato growers, shippers and marketing experts agree there are too many spuds out there right now.
Big yields in many growing regions led to the increased volume, according to Lee Frankel, president and chief executive officer of the Salt Lake City-based United Potato Growers of America, which was formed several years ago as a means to control the amount of spuds hitting the markets.
“It’s important, especially to make sure growers are truly packing orders and if they have an excess of supply to start grading more strictly now rather than waiting to the end of the season and waiting for something more magical to happen in the markets,” Frankel said.
Scoping out the season
United Potato will continue to keep abreast of the market’s direction, Frankel said.
“The other aspect is for the other areas that sit out of field, we have an analysis of what the storage crop looks like as we get into the summer months (that) should help guide growers in Texas, New Mexico, Kansas and Kern County, Calif., on the early side, as well as Virginia and the Carolinas,” he said.
“We’re working to make sure accurate information is out there, making sure information gets to out-of-field growers to understand the marketing dynamics now and know what they’ll be when they’re harvesting,” Frankel said.
Kevin Stanger, vice president of sales and marketing for Idaho Falls, Idaho-based Wada Farms Marketing Group, said that not so good was a kind way to describe the market.
“There are too many on the market,” he said. “The acreage was up slightly. The yields were a record. Demand is fairly flat. Put all that together and there you go.”
What’s the solution?
“You’re always looking for market opportunities, contracts,” Stanger said.
“Those help, but on a year as bad as this year, it’s not going to stop the bleeding.”
And, he said, the bleeding is pretty serious.
“We’ve had other years that are minor paper cuts and some that are pretty tough, but this year is a main artery, based on f.o.b. prices and that the cost of production is at an all-time high,” he said.
Not all was gloomy, though, said Seth Pemsler, vice president of retail for the Eagle-based Idaho Potato Commission.
“If you look at the stats, the last Nielsen data, the market is up 11.2% over the last previous six months,” Pemsler said.
“Obviously, that’s encouraging.”
He said it’s helpful that there is plenty of product on the market for consumers.
“The important thing is, there’s potatoes at retail and in the total marketplace,” he said. “Potatoes at retail are up, but foodservice and french fries are down.”