Reduced acreage, smaller sizes stoke higher prices - The Packer

Reduced acreage, smaller sizes stoke higher prices

10/13/2010 03:33:07 PM
Tom Karst

IDAHO FALLS, Idaho — reduced acreage and variable yields will translate to a smaller Idaho potato crop and stronger prices in 2010-11, Idaho industry sources say.

The U.S. Department of Agriculture estimated fall potato acreage at 294,000 acres for 2010, down 8% from 321,000 acres last year and off 3% from 305,000 acres two years ago.

The crop was two weeks late in some growing regions, said Gary Garnand, president of Garnand Marketing LLC, Twin Falls.

Potato sizes were variable early in September, with some of the early russet norkotahs smaller than average and some closer to normal.

“We had a cool, wet spring. Even though most growers got their crop in on time, (the crop) just didn’t grow,” he said.

Garnand said reports were mixed about the tuber set and sizing, depending on the area.

Bob Meek, chief executive officer of Wada Farms Marketing Group LLC, Idaho Falls, said the early cold weather may allow harvest to be largely complete by Oct. 10 rather than Oct. 17.

“That will mean less frost damage on potatoes going into storage,” he said.

Looking up

A number of factors appear to be pointing toward a better marketing season, said Kevin Searle, general manager for Shelley-based GPOD of Idaho.

“All the numbers are showing less acreage. It appears yields will be down, and from everything we have seen quality of the crop will be very good,” Searle said.

From Idaho Falls north, Searle said he expected the size profile of the crop to be smaller.

“Early indications are we should have gold market standards on large cartons and an abundance of medium-sized cartons and small bags.

The growing season was characterized by a cool wet spring, with earlier summer temperatures quite variable.
In early September, two mornings of cold weather may have cut off hopes that some tubers would continue to size up through mid-September.

Searle said Idaho should be in a good position to take the lead in setting the tone for a stronger potato market.

“Hopefully we set a precedent that everyone can follow as far as creating a market that gives good returns to the growers and a liveable market to the shippers and packers.

“Last year was brutal for marketing, and there are high hopes for a better marketing season for all states,” he said.
Those hopes for better times began to take shape at the close of the 2009-10 season.

“We were able to get rid of the old crop in a better fashion than anyone anticipated,” said Searle.

Meek said the industry was lucky to clean up the 2009 the way it did. “If you have asked us in January, some would have felt we would be running old crop into October,” he said.

The only negative was that marketers took less-than-ideal prices for what was a good crop of potatoes, Searle said.
The market did eventually kick higher in June and July, but that benefitted a relatively small number of growers because it came so late in the season.

On Sept. 28, the f.o.b. for 60-count 50-pound cartons of russet norkotahs was $17.50-18, up from just $6-6.50 on the same date a year ago and up from $13-15 per carton the same week two years ago.

Meanwhile, 90-count 50-pound cartons were priced at $10-11, up from $6-6.50 last year but off from $13-13.50 two years ago.

The cutback in acreage and the size profile of the crop points to a fairly good price season, said Scott Phillips, vice president of sales and marketing for Nonpareil Corp., Blackfoot, Idaho, Foodservice operators were nervous about long term pricing in September, as growers-shippers were still determining the size availability.

Jim McBride, sales manager for Mart Produce, Rupert, said size 40-60 count cartons will receive premium prices this year.

Price increase

Smaller carton size and bag potatoes will have less strength, though McBride said lower yields may push those prices up as well.

While some retailers like to buy 60 counts for bulk display at supermarkets, McBride said the quantity of that size
will be off this year.

“They may have to downsize potato size for display, because (60s) may not be available,” he said.

More 3-pound, 5-pound and 10-pound consumer bags will be shipped from Idaho this year, he said.

If growers sense there is a shortage developing, they will be a reluctant sellers, Garnand said.

Ralph Schwartz, director of value added marketing for Potandon Produce L.L.C., Idaho Falls., said the market prices should be higher this year.

However, he said that if retailers are keen to promote potatoes, it could cause the industry to concede on f.o.b. prices early in the season to move more volume.

If Idaho shippers “blow and go” with promotions now, it could create a shortfall of supply and sharply higher prices by next summer, he said.



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