Potato shortage fuels demand for San Luis Valley spuds

(Photo courtesy of the Colorado Potato Administrative Committee)

When it comes to potatoes, Idaho may be top of mind with most U.S. consumers, but the Colorado Potato Administrative Committee is working to change that. 

The Monte Vista, Colo.-based marketing organization’s main focus is to make consumers aware that Colorado’s San Luis Valley is the second-largest fresh potato market in the country, said Jessica Bradshaw, assistant director of the Colorado Potato Administrative Committee, which represents over 150 growers and 70 farms in the valley. 

Located between the San Juan and Sangre de Cristo Mountains along the Rio Grande River, “Colorado’s San Luis Valley is a potato-growing paradise,” says the Colorado Potato Administrative Committee, which touts the region’s combination of sunshine, pure mountain water, nutrient-rich soil and high altitude as factors influencing potato quality. 

The San Luis Valley ships roughly 1.6 billion pounds of potatoes a year, 90% of which go to the fresh market. However, like potato crops nationwide, the last crop in 2021-2022 was “a bit slimmer,” said Bradshaw, who added the valley is at 1.5 billion pounds this year. Despite last season’s tight crop, she doesn’t anticipate “too much of a gap” between a fully depleted pipeline and the October harvest. 

Digging into the 2022 crop

Even with the new crop nearing harvest, Colorado grower-shippers could be facing another year of tight potato supplies.

Tater-Traders_Morgan-McCormick2166
Photo courtesy of Tater Traders; Morgan McCormick

“Similar to last year, the 2022 crop is down and water issues — while they remain constant —seem to be more prevalent,” said Morgan McCormick of Tater Traders in Golden, Colo., a family company that ships potatoes from the San Luis Valley.

Lack of water followed by monsoons last season created challenges, McCormick said.  

While potatoes need rain, they also need sun to reach optimal size. Similar weather this season, with a spate of monsoons, has led to a crop waiting for sunshine to gain size. 

Les-Alderete-Skyline53887
Les Alderete

“Colorado is facing many of the same issues as last season, with monsoons for two to three weeks. In the next couple of weeks, sun will be critical for the potatoes to bulk up, as they need a little more size,” said Les Alderete, general manager of Skyline Potato in Center, Colo. “Right now, the Colorado potato crop is probably 10 days behind.” 

“They’re seeing the same thing in Idaho and New Mexico,” added Alderete, who is confident that the 2022 Colorado potato harvest yields will be only slightly down. 

Michele Peterson of Wada Farms, which has regional offices in Monte Vista, Colo., agrees.

“As with any year, you never know what you will have with supply inventory until the crop has been harvested,” she said. “The test digs have shown a smaller size profile, with average yields.”

On the positive side for Colorado, western potato shortages — including those in Idaho — have spurred retailers and consumers to give potatoes from other parts of the country a try.

“With freight last year being so crazy, a lot of people turned to buying other potatoes besides those from Idaho, which gave Colorado the opportunity to pick up some of that business,” McCormick said.

 At Farm Fresh Direct of America in Monte Vista, Colo., President and CEO Mike Hulett is anticipating a quality 2022 potato crop.

“As for the 2022 crop, Colorado had springtime winds and cool temps that delayed progress early, but is rebounding nicely,” said Hulett, who added that, while it’s still too early to call definitively before the potatoes come out of the ground, “we see a good-quality crop and average yields. 

“The pipeline is empty now so demand will continue to be strong,” continued Hulett. “We will see cost pressure for some time this season and expect demand for Colorado potatoes all year.”

Skyline-Potato-0210914_100747
Photo courtesy of Skyline Potato

Full-market access to Mexico

In addition to tight supplies and consistent consumer interest, grower-shippers also see new market opportunities fueling potato demand. 

“Last season was a solid one for Farm Fresh Direct of America and the State of Colorado. We had less potatoes but managed the crop well, despite extreme demand with the national shortage and Mexico coming online,” Hulett said. 

After more than 25 years of regulatory and legal obstructions, U.S. potatoes were legally authorized to access Mexico’s full market in May 2022, the National Potato Council reported at the time. Previously, U.S. potatoes could only be sold in a 26-kilometer border region in Mexico. 

Despite the long-standing restriction, Mexico was the second-largest market for fresh potato exports in 2021, accounting for 124,449 metric tons valued at $60 million last year, said the council. The U.S. potato industry estimates that, in five years, access to the entire country for fresh U.S. potatoes will provide a market potential of $250 million per year.

“We’ve seen potato demand stay pretty consistent, and [full-market access to] Mexico has added to — and will continue to add to — Colorado’s shipping lanes,” said Alderete, who sees the state’s location as a strategic advantage. 

“We’re closer to the market, and we can get potatoes to market cheaper than someone from Washington or Idaho,” he said. “Freight is now $4 a 100-weight, so it adds up. Before, it was 50 cents or $1 a 100-weight, before freight went through the roof.”

Alderete further notes that Colorado’s investment in advertising campaigns in Mexico has also helped to create awareness. But while the demand may be there, due to potato shortages across key U.S. growing regions, “no one has had extra potatoes to ship [to Mexico],” he said.

Photo courtesy Skyline Potato
Photo courtesy of Skyline Potato

Consumption trends

Despite pent-up demand due to potato shortages, consumption of fresh potatoes sold through retail is slightly down (-1.2%) year-over-year for the latest 52 weeks ending Aug. 13, 2022, noted Hulett, pointing to Nielsen data. And like almost all other categories in fresh produce, prices are up. Russets, which represent 64% of the entire potato category, declined in volume due to supply constraints. Reds continued their year-over-year decline trend. Only yellow potatoes posted an increase in volume, which is on trend, as well, said Hulett.  

In other trends, grower-shippers find that potato consumers want smaller bags. While the 5- and 10-pound bale used to be the top item, that has now adjusted to a 3-, 4- or 5-pound bag, said Peterson of Wada Farms. But while the consumer has shifted to a smaller potato bag size, they “still want top quality,” she added.

Are potatoes inflation-proof?

Looking ahead, Colorado is well positioned for both domestic and south-of-the-border potato sales — providing supply is there and inflation doesn’t become a larger issue, say grower-shippers.

“Supply shortages from last year’s heat and demand drove cost of goods up. The domestic labor shortage and world situations, fueling inflation, have driven input costs up in equal fashion. No one has been immune to inflation, especially on the farm,” said Hulett.

“Input costs are insane,” agrees Bradshaw, who added that fertilizer in the San Luis Valley has increased in price by as much as four times that of pre-pandemic levels. As a result, growers are as mindful of soaring input costs as they are of ongoing water issues that “are not getting better,” she added. And between rising fuel costs and a labor shortage impacting the number of truck drivers, freight issues are equally challenging.

https://cdn.farmjournal.com/s3fs-public/inline-images/Colorado-Potato-Admin-Committee.jpg
Photo courtesy of the Colorado Potato Administrative Committee

But though grower-shippers such as Skyline Potatoes see a recession looming with higher retail prices, Alderete is cautiously optimistic that potatoes will weather the inflationary storm.

“While all inputs and costs have gone up,” said Alderete, consumers can still look at potatoes in the produce department as some of the cheapest foods they can buy. “For the money, potatoes are probably the best value in the produce department, even at a higher price.”

Satiating, nutritionally valuable and relatively cost-stable, consumers often see potatoes as a way to lower the cost of a meal during inflationary times.

“Right now, we don’t see consumers moving away from potatoes, despite the cost,” said Hulett, adding, “Colorado is positioned well to be a key supplier of potatoes nationally and export-wise. Freight continues to play a huge factor, and as those costs skyrocket, Colorado’s geography becomes critical. We see good things for the future of Colorado potatoes.”

Colorado-Potato-Administrative-Committeeerin-nissen2
Photo courtesy of the Colorado Potato Administrative Committee

Promoting Colorado Proud

Aimed at encouraging shoppers to support local products, the Colorado Department of Agriculture developed the free Colorado Proud marketing program in 1999. 

According to Colorado Proud, more than 90% of Coloradans would buy more Colorado-grown and -produced products if they were available and identified as being from Colorado. The distinctive Colorado Proud logo is designed to help consumers to easily identify Colorado food and ag products.

Producers looking to reach new markets, buyers wanting to connect with local or specialty suppliers, and consumers looking for products made closer to home will find a variety of resources on the Colorado Proud website, including “Tips for Picking Colorado Produce.”

Colorado Proud offers tips for selecting everything from cantaloupe to onions to peaches and, of course, potatoes. 

All potato varieties should be uniformly sized, fairly clean, firm and smooth, says Colorado Proud. Avoid potatoes with wrinkled skins, soft dark spots, cut surfaces or green appearance. 

Potatoes are fat-free, sodium-free, a good source of fiber, high in potassium and high in the antioxidant vitamin C, adds Colorado Proud. Look for a variety of Colorado potatoes including Yukon Gold, russet, fingerling and purple year-round.

 

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