Aggressive shipping pushes fresh spud prices down
By John O’Connell
Recent USDA estimates reflect a manageable U.S. potato supply, but fresh potato shipments have continued at a pace more befitting of above-average inventories, industry experts say.
Potato industry officials say the aggressive shipping has held fresh prices down.
Idaho’s potato stocks as a percent of production through April 1 were 34 percent, compared with 24 percent in Washington, 35 percent in Oregon, 20 percent in California and 29 percent for the 13 major potato states.
“Nationwide, the Russet crop is completely balanced and has been all season long,” said Jerry Wright, president and CEO of United Potato Growers of America.
Budget cuts prevented USDA from issuing an April stocks report for the 2012-2013 crop, but Dan Hargraves, executive director of Southern Idaho Potato Cooperative, said Idaho’s April stocks as a percentage of production ranged from 35-38 percent from 2007-2011.
“(Stocks) are on the low side,” Hargraves said. “I think that’s good news for growers.”
USDA estimated Idaho’s April potato stocks totaled 45 million hundredweight, with 86.1 million hundredweight of the state’s total harvest now gone.
Nationally, the 13 major potato states held 112 million hundredweight in storage, with 278 million hundredweight of the original supply gone, including 21.4 million hundredweight lost to shrinkage.
Idaho and Malheur County, Ore., processors used 6.89 million hundredweight of spuds during March, compared with 6.18 million hundredweight in Washington and other Oregon counties. Processors in the top nine potato states used 16.7 million hundredweight during March, with dehydrating accounting for 3.6 million hundredweight of total processing.
According to USDA’s Agricultural Marketing Service, Idaho has shipped 22.848 million hundredweight this season, compared with 23.853 million hundredweight last season. Last season’s crop was much bigger, however, and the fact that shipment numbers are as close as they are tells Hargraves, “Looking at the stocks on hand, eventually we’re going to have to cut back on these fresh potato shipments, which should have a positive impact on pricing.”
AMS officials say 50-pound cartons of medium-sized potatoes have been in shortest supply, with prices for the Twin Falls-Burley district of Idaho ranging from $10 to $11, mostly $10 to $10.50.
Kevin Stanger, senior vice president of sales with Wada Farms in Eastern Idaho, said his company has slowed down its shipping to “make sure we have enough good supply to last through the season.”
Industrywide, Stanger said, “I’m not quite sure why we’re shipping what we’re shipping because we really don’t need to be.”
Based on his company’s experience and conversations with others in the fresh potato industry, Stanger suspects shipping has been accelerated by the need to move marginal-quality potatoes out of cellars as quickly as possible.
“I’ve heard that comment regularly out and about — quality issues having to be addressed,” Stanger said. “Based on the stocks-on-hand report, we could see a pretty good price bump as we get into June, July or early August if we continue at this pace.”