Processors increase capacity as fresh shipments rise
By JOHN O'CONNELL
Dehydrated potato production increased by a record 68 percent from last year within the nine major potato processing states, according to a new report from the USDA's National Agricultural Statistics Service.
Overall, processors in Idaho, Washington, Oregon, Wisconsin, Colorado, North Dakota, Maine, Minnesota and Michigan used 73 million hundredweight of the 2011 crop as of Dec. 1, up 17 percent from the previous year. Dehydrated processing accounted for 13.4 million hundredweight of the total.
"It is the largest increase we've ever shown," said NASS statistician Brad Early, adding his service has only tracked the dehydrated statistic since 2002. "In 2010, there was less (dehydrated) capacity. In 2011, capacity increased."
Fort Hall potato grower Kevin Loveland, who sells some of his crop into the dehydrated market, said the jump "really changes the outlook from this side of the spectrum. You can tell they want spuds for next year."
Dan Hargraves, executive director of the Southern Idaho Potato Cooperative, emphasized the Gem State dehydrated processing plant in Heyburn is in its first full year of operation.
"That dehydrated number is unbelievable -- up 68 percent from last year. You just don't see that," Hargraves said.
In Idaho, total processing increased by 39 percent from this time last year. Idaho fresh shipments have increased by 5 percent, according to the USDA's Agricultural Marketing Service.
Given the strong demand, industry officials aren't worried about new figures showing potato stocks held by Idaho growers, dealers and processors were at 88 million hundredweight on Dec. 1, up 9 percent. Nationally, supplies totaled 250 million hundredweight within the 13 states that report potato stocks, up 4 percent.
At harvest, the 2011 crop was 14 million hundredweight larger than in 2010. Hargraves considers it a "bullish" market indicator that half of that increase has already been used by processors.
"There's more active purchasing on the part of the processors and dehydrators," Hargraves said. "What may look on paper like a burdensome supply, in reality there's a home for all of those potatoes with the processors."
Though large compared with last year, Early stressed this year's crop came in 10 percent below 2009. Processors also got an early start with the 2011 crop due to a lack of carryover from the previous year.
Idaho's disappearance -- the amount of crop used by a given date -- is up 22 percent from last year and hasn't been this rapid since 2002, Early said.
American Falls potato farmer Klaren Koompin attributes part of the increased demand from the processors to a short and poor crop throughout the Midwest.
"The economy is turning around a little. People are cautiously coming out to enjoy what restaurants have to offer, and therefore you're seeing an increase in food service demand," Koompin added.
Regarding the dehydrated market, Koompin said the new Gem State plant is scheduled to add two more units to the three already in use by next May.