Potato prices have shown a big increase in the past year, and potato marketers anticipate a firm market for the balance of the storage season.
The USDA-reported average fob shipping point price for russet potatoes was $10.95 per carton on Feb. 5, up 19% from $9.22 per carton the same time a year ago. The average fob price for yellow potatoes was $22.17 per carton in early February, up 12% $19.75 per carton the same time a year ago.
The average fob price for red potatoes on Feb. 5 was $20.19 per carton, up 37% from $14.66 per carton the same time last year.
“I would say growers are pretty optimistic about, certainly, the remainder of the crop year,” said Mark Klompien, CEO of the United Potato Growers of America. Klompien said “balanced” supply and demand conditions have resulted in good returns to growers.
“That’s a good thing, because growers definitely need it,” he said.
Balancing the improved prices, Klompien said costs for growers have escalated. “I think our grower costs across the board are probably up at least 20% and maybe as much as 30%,” he said, noting variations based on yield and size of operations.
“This is definitely an excellent year for the potato supply and demand balance and very fair returns to growers, but at the same time, they’re facing the headwinds of greatly increased input costs,” he said.
One of the challenges facing growers is labor.
“Certainly, the potato growing industry is not immune from those labor challenges that we hear about in the news,” Klompien said. “We do have a lot of automation, but also a lot of manual labor, as well.” Finding and retaining workers is a challenge for growers and packing sheds, he said.
In addition, transportation issues of rising costs and availability trouble grower-shippers, he said.
One of the factors keeping the fresh market firm, he said, is very robust demand from frozen potato processors.
“Processors have needed more potatoes,” he said. “Because of the downturn in yields in some of the areas of the Pacific Northwest, most notably the Columbia Basin and Idaho, they come up a little show of what they had contracted for and so they have been taking some supplies from the fresh market.”
The U.S. potato industry has been waiting on expanded access to Mexico, and that is expected sometime this year after Mexico has begun the process of certifying packers seeking to ship to Mexico.
“The U.S. Potato Board and the National Potato Council have been working on that nonstop for four years now, and we are very close,” he said.
Looking ahead, Klompien said 2022 planting decisions are being made in the winter months. The strong fresh and processing markets, high input costs and attractive competitive crops to plant may combine to result in fairly stable acreage, he said.
“Overall, I think growers are going to be somewhat stable in terms of the acreage,” he said, although he noted that growers selling processors will likely increase acreage.
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