USDA potato purchase helps move big crop
Updated: Thursday, January 10, 2013 10:50 AM
By JOHN O'CONNELL
Potato industry leaders say a recent $25 million special purchase of fresh and processed spuds by USDA should help move a large 2012 crop while providing the federal agency a good buy on a nutritious commodity.
The order, described by USDA as a "bonus buy" beyond its usual commodity purchases, was requested in a Sept. 28 letter by the National Potato Council. It represents the equivalent of about 300 million pounds of fresh potatoes, which will be sent to federal nutrition programs and food banks.
"Due to current market conditions the cost associated with growing fresh market potatoes exceeds market prices in all growing areas in the U.S. ... In addition, the demand situation is unlikely to improve in significantly in the next 18 to 24 months," NPC Executive Vice President and CEO John Keeling wrote in his letter.
USDA spokesman Sam Jones-Ellard said the agency has a $642 million annual budget to aid producers through bonus buys in sectors facing financial challenges.
"When we make these bonus buys, typically they're requested by the industry, like trade associations or industry groups," Jones-Ellard said, adding USDA conducts a market analysis upon receiving a request to determine if a bonus buy is warranted.
In announcing the purchase, USDA Under Secretary of Marketing and Regulatory Programs Edward Avalos said it should "help mitigate further downward prices, stabilize market conditions and provide high-quality, nutritious food to recipients of USDA's nutrition programs."
USDA is also making bonus buys totaling $16 million in wild blueberries and $35 million in processed turkey.
At Southeastern Idaho Community Action Agency, which distributes its region's USDA commodities, bonus buys are especially welcomed as they don't count against federal allocations.
"It's like a free product to us," said SEICAA's Bannock County coordinator, Shantay Miner.
Miner said recipients also like the variety bonus buys lend to their food boxes. Typically, USDA provides SEICAA only canned potatoes, though private companies often donate frozen potato products during the holidays.
"The potatoes are definitely something that puts that box together nicely," Miller said.
American Falls, Idaho, grower Jim Tiede, a member of NPC's executive committee, acknowledged the USDA purchase won't dramatically change the dynamics of the market, but he believes every bit helps.
"We've got some really nice, high-quality potatoes this year and they're priced well for the consumer," Tiede said. "We're going to move this crop."
Kevin Stanger, who works for Wada Farms, which operates an eastern Idaho fresh pack facility, said a large size profile to Idaho's record-yielding spud crop has also contributed to carton price declines.
"We're moving the crop," Stanger said. "Sometimes we're putting (large Russets) in consumer bags we normally wouldn't be putting them in."
According to a Dec. 11 USDA report, Idaho's potato crop, at 143 million hundredweight, is up 11 percent from last season, and national fall potato production, at 422 million hundredweight, is up 8 percent. The percentage of spuds at 10 ounces or more, at 32.9 percent, is up from 25.6 percent last season.