U.S. potato market should strengthen under reduced acres


Capital Press

It's been a tough year for potato farmers around the world, but there could be a silver lining. Reduced global production is expected to give the struggling U.S. spud market a much-needed lift.

Potato production in the United States, Canada, Russia and Europe is expected to dip significantly this year due to reduced plantings, drought and other weather-related factors, according to the USDA's Foreign Agriculture Service.

The U.S. potato market is expected to strengthen in the coming months on tighter global supplies.

U.S. potato prices in September averaged $7.58 per hundredweight, 5 percent below a year earlier, but 11 percent above the monthly average for 2005-09, the USDA reported last month.

"Prices are likely to rise if the 2010 crop is as small as anticipated," USDA economists said in the Oct. 28 report.

U.S. farmers harvested an estimated 882,000 acres of potatoes this fall, about 4 percent less than in 2009.

Production is expected to be down in other countries as well.

Planted acres in Canada were down about 3 percent this year. Canadian spud yields are expected to be only average due to heavy rains that delayed planting and crop development in the Western provinces and a much hotter than normal summer on Prince Edward Island.

A severe summer drought in Russia, one of the world's top potato producers, is expected to limit production to 22 million metric tons, a 30 percent decline from 2009.

"Prospects for the world supply situation in 2010-11 continue to look tight," USDA economists wrote in the report.

Russia is expected to reduce or eliminate import tariffs on potatoes because of the reduced crop.

"The Russian government has not yet adopted a resolution on import duties, but it seems likely that potato imports during January-July 2011 will be duty free," the FAS reported.

Europe is also expected to produce a smaller potato crop this year due to weather problems.

Despite the smaller crop, Europe is likely to cover most of Russia's import needs, freeing up other markets for U.S. and Canadian potatoes, USDA economists said.

European potato yields and quality are likely to be down this year because of variable weather during the growing season and possible storage problems due to wet harvest conditions, the USDA reported.

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