Report shows flat Idaho potato production costs
By John O’Connell
IDAHO FALLS, Idaho — A new University of Idaho economic study shows the cost of raising Idaho potatoes held relatively flat in 2013.
UI Extension Economist Paul Patterson estimates southwestern Idaho growers invested $6.79 per hundredweight, down 1.3 percent from 2012. Southeast Idaho growers saw a 0.3 percent decrease, with a $6.52 production cost, and Southcentral Idaho growers invested $6.74, up 0.7 percent.
His model farm raises Russet Burbanks — without fumigation in southcentral and southeast Idaho.
Patterson explained cheaper seed potatoes and fertilizer kept production costs in check.
Low fresh-market prices paid for the 2012 crop led growers to reduce acres in 2013, which decreased demand for potato seed, Patterson said. Planted seed acreage appears to be down in 2013, and Patterson anticipates seed prices will rise.
Patterson said dry nitrogen prices declined 6.5 percent from the prior season due to increased domestic production, facilitated by improved methods of extracting natural gas as a feedstock. Patterson believes a soft corn market will further erode nitrogen prices. Potash prices declined 12.3 percent in his report, due to a major manufacturer ramping up production. Patterson believes markets over corrected from fertilizer shortages a couple of years ago and anticipates more stability for fertilizer costs into the future.
“Part of what we’re seeing is a drop down to a more normal demand of fertilizer being more predictable across the U.S.,” Patterson said.
Irrigation costs represented the single largest percentage gain, jumping 12.5 percent from last year. Patterson said increased water costs by irrigation districts and canal companies were a major reason for the rise. Furthermore, power costs rose, resulting in a 22 percent increase in the pumping cost per acre inch of water.
Crop insurance fees also made a sharp increase, rising 7.7 percent. Patterson said land costs flattened.
Regarding chemical treatments, Patterson increased the number of foliar fungicide applications for the Magic Valley. In eastern Idaho, he removed one insecticide application for controlling psyllids, which can spread the crop disease zebra chip. His decisions were based largely on responses to a survey he sent to growers.
The sizes of his model farms, last adjusted in 2009, increased by 400 acres in southwestern and southcentral Idaho and 600 acres in eastern Idaho, which slightly reduced machinery costs due to economies of scale.
His report includes a separate table growers may apply for analyzing transloading and monthly storage costs.
At current prices of $7.50 to $8.25 per hundredweight for Burbanks and estimates in his report showing a $7.55 cost of production for potatoes stored in eastern Idaho through November, Patterson said the current crop should sell for slightly more than the break-even point.
Dan Hargraves, executive director of Southern Idaho Potato Cooperative, believes Patterson’s yield estimates were overly optimistic in the two regions where he didn’t factor in fumigation costs. Hargraves also emphasized Idaho growers can have spuds rejected for zebra chip disease in their contracts with processors, though they’ve never been fully reimbursed for added chemical expenses to control psyllids.