With storage volumes running out, potato grower-shippers in Washington and Oregon will start the new crop in a much stronger market than 2012 — especially on reds and yellows.
Fifty-pound cartons of round reds shipped f.o.b. for $24-26 on July 1 out of Kern County, Calif., compared to $8-9 a year ago. Yellows were about $22 for size A, up from $12, according to the U.S. Department of Agriculture.
Production of reds and yellows in Washington and Oregon was expected to start small soon after the Fourth of July and hit its stride around July 22. Russets are due to come online between July 22 and Aug. 1.
Last year’s oversupply situation is long gone, said Les Alderete, director of production and grower development for Raleigh, N.C.-based L&M Cos.
“You’ve got to love produce because it’s just the opposite now,” Alderete said June 27.
“We didn’t have old crop out of North Dakota or Wisconsin lingering around, so everyone pulled it from Florida or California. Florida had some weather problems and both states cut their acres back. Yields and size were also down. At $24 you’ve got plenty of customers who will take everything now. Demand way over-strips what’s available for reds and yellows.”
L&M Cos. has 125 acres of reds and yellows — mostly reds — in Washington that will finish up around the second week of August. Alderete expects average sizing and yield.
“A month ago we thought we’d have a lot more size B than A,” he said. “But there was good weather and they bulked up really nice.”
Russets are affected as well, said Larry Sieg, Washington sales and general manager for Idaho Falls, Idaho-based Potandon Produce LLC.
“Supplies are going to be critically low for the next four or five weeks,” he said June 27.
“That should get alleviated toward the second week of August. Supply is all over with russets on the old crop. Whether it’s here, Idaho or California, there will be gaps between the storage crop and the new crop. It will vary by shipper. The heat in Bakersfield could burn up some of their crop.”
Contributing factors were subnormal packout and more shrinkage and culling than usual, Sieg said.
Shane Marston, salesman for Quincy, Wash.-based Jones Produce Inc., said supplies are tight. But he didn’t expect much of a gap.
“This year we had way too many potatoes everywhere,” Marston said. “But we’re finding out there were problems with storages in Idaho and Washington. It seems like packouts have been off since early spring. Throw in that a lot of packers went to cattle or elsewhere with the product and it has really tightened the crop.”
“I don’t think there will be a gap,” he said. “Everyone is slowing down now, trying to make it last. But Bakersfield had such a huge reduction on the russet side, there’s not that new crop California to fall back on. We thought it could be a year-and-a-half problem, but it looks like all the old crop will be used up. There won’t be any carryover.”
Kern County cut russet acreage about 40% this year, Marston said, after being greeted by less than premium prices in recent years as storage crop remained plentiful against its new crop.
“A lot of our customers leave old crop when Bakersfield starts,” he said.
“With less new crop Bakersfield to go around, that will definitely help Washington get cleaned up.”
“Idaho is going to clean up their old crop and we will too,” said Dave Long, a grower, consultant and former chief executive officer of Othello, Wash.-based United Fresh Potato Growers of Washington & Oregon Inc.
“And western Idaho is not going to be as early as last year, so I think we’re going to have a better shot at a market.”
Dale Lathim, who succeeded Long as chief executive officer, sees an opportunity for his growers to fill gaps in late July and August.
“We hope that we’ll be able to maintain some very strong pricing through that whole period,” Lathim said.
“As long as everybody manages the shipments correctly when we get into September and doesn’t flood the market, we should be able to hold that price for much longer than we have in past years.”
Fifty-pound cartons of norkotah russets shipped f.o.b. for $10-12 on July 1, according to the USDA, up from $7-8 a year ago.
Washington and Oregon planted 207,000 acres of potatoes in 2012. Washington is down about 3% this year to 160,000 acres, according to the USDA. Fall acreage nationwide is down about 4%.
Growers in both states had some concerns as temperatures surpassed 90 degrees in early July.
“Oregon typically would be upper 70s and lower 80s, but we’ve had upper 90s and today we’re looking at 100,” Ken Rutledge, salesman for Klamath, Ore.-based Wong Potatoes Inc., said July 2.
“We’re fighting some weather and we’ve got water issues. They haven’t really started affecting us on the south side of the basin yet, but it’s coming.”
Even so, he expects normal volumes.
Allen Floyd, president of Othello, Wash.-based Harvest Fresh Produce Inc., expected to finish last year’s norkotah russets by the third week of July. “We’ll be down two to four days at the most and then running again on new crop,” he said.
“On top we’ve got some of the prettiest vines I’ve ever seen,” Floyd, a Potandon grower with product under the Green Giant Fresh label, said June 27.
“I don’t know what’s underneath. They’re closed rows and good, healthy vines. But we’ve got quite a few 100-plus degree days coming at us, so we’ll see how good they are.”
Marston said supply should be enough to meet demand, but not much more.
“We’ll see what Mother Nature has left us for the rest of the year,” he said.
“August is a pretty good window for Washington. Idaho starts around Sept. 1 and then really gets cranking toward mid-September. That’s when you’ll see prices dip, but how far we don’t know.”