Potato acreage expected to climb, lowering returns
DENVER, Colo. — The 2019 potato crop delivered lower yields in the Red River Valley and parts of Idaho, but other regions saw growth.
Red, yellow and russet production totaled about 86 million cwt. in 2019, down about 8 million cwt. (9%) from the previous year.
For the 2020-21, early signs point to expanded acreage and lower prices, said Mark Klompien, president and CEO of the producer cooperative United Potato Growers of America.
Klompien, speaking at the Potatoes USA annual meeting on March 11, said the higher returns for potatoes were in large part driven by weather challenges in the Red River Valley and parts of Idaho.
Klompien said economic models on the 2020 potato crop show that average grower returns would decline with increases in acreage.
Crop projections
In the 2019-20 crop year, russet potato production was 65.7 million cwt., down 6% from 69.8 million cwt. in 2018-19 and 10% lower than the 72.9 million cwt. five-year average.
The average price for russet potato growers is projected at $11.41 per cwt. in 2019-20, way up from the five-year average of $6.99 per cwt.
Klompien said a 5% increase in acreage could drop grower returns to $5.35 per cwt. In 2020-21, and a 6% growth in acreage would drop russet prices to $4.74 per cwt.
Acreage is expected to expand in 2020, but there has been no industry projection so far.
“This exercise is obviously an oversimplification, but it really points out the end elasticity of the market,” he said. “It is a cautionary tale.”
Klompien said yellow potatoes have experienced long-term supply growth of 8.7% per year for the past ten years. While the rate of growth is flat for 2019-20, Klompien said there appears to be more room to expand yellow potato production.
“Gains in the yellow potato sector are really unprecedented in the potato world,” he said.
The lack of growth in shipments this season are more a function of supply than any lessening of demand, he said.
Klompien said red potatoes have declined slightly in volume over the past ten years, at an average loss of 0.8% per year.
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