Progress on Mexico fresh trade improves spud export outlook
Updated: Friday, November 02, 2012 11:14 AM
By JOHN O'CONNELL
U.S. potato industry officials say recent progress toward opening more of the Mexican market to their fresh shipments stands to improve an already promising long-term export picture.
U.S. fresh spuds are now imported only within about 16 miles of the Mexican border.
The Mexican government recently proposed allowing imports of U.S. spud bags over 20 pounds to all of its cities with populations above 100,000. Mexico will accept public comments through Dec. 1.
The National Potato Council submitted a letter to the Mexican government in support of the change, noting Mexican potato chip plants would benefit from enough supply to operate at full capacity year-round, and greater variety should increase Mexican spud sales.
According to recent news reports out of Mexico, organizations of Mexican potato farmers have vowed to fight against the proposal, which they believe would lead to unfair competition.
Even with the restriction, Mexico is the No. 2 importer of fresh U.S. spuds, buying 73,415 metric tons valued at $39.7 million in 2011. Officials estimate opening the rest of Mexico could increase annual fresh exports to $150 million. After nine years of discussions seeking improved access, industry leaders say Mexico's desire to participate in the Trans-Pacific Partnership negotiations brought the issue to the forefront.
National Potato Council spokesman Mark Szymanski said it's unlikely the regulations will be finalized in time to benefit the 2012 crop. He described the development as a major step in a long process.
"We're eventually going to have to work with them on how big the printing needs to be on bags, whether they're going to have to be in English and Spanish -- things like that," Szymanski said.
In the meantime, U.S. Potato Board President and CEO Tim O'Connor is optimistic the industry will still improve this season upon a 2012 marketing year that saw exports increase by 10 percent.
USPB officials predict exports from the ongoing harvest could reach 75 million hundredweight, which would represent a 15 percent increase.
O'Connor said in a press release he's hopeful the increasing exports will help absorb a projected 8 percent increase in this fall's crop.
Lynn Wilcox, president of Wilcox Fresh in Rexburg, Idaho, anticipates a "decent season with several Asian countries that we have been doing business with."
"All in all, we should have an improvement over last year's exports," Wilcox said.
He sees the greatest export opportunities in the frozen and dehydrated markets, which he said have been hampered by tight supplies in recent years.
Kevin Stanger, senior vice president of sales with Wada Farms in eastern Idaho, said exports are still a small percentage of his company's sales but "any increase is better than nothing."
He, too, is bullish on frozen and dehydrated exports, which indirectly help the fresh market by using spud inventories.
Oregon Potato Commission Executive Director Bill Brewer cautioned it's also important to emphasize retaining mature markets. He noted Oregon, Washington and Idaho are working to resolve trade concerns about zebra chip that caused the South Koreans to cut off fresh imports.
"The sales we've lost to date, they're not waiting. They're being filled by other markets," Brewer said.