U.S. potato exports rose to nearly $1.83 billion and more than 1.73 million metric tons for the July-June marketing year, both record highs, Potatoes USA reported.
But the gains, 1% in value and 2.3% in volume, were held back by tariffs coupled with strong domestic demand.
Exports rose in fresh and dehydrated categories. Frozen potatoes saw a slight decrease. Chips notched a small gain.
Idaho accounts for about 70% of total dehydrated production, said Seth Pemsler, Idaho Potato Commission retail-international vice president. Dehydrated exports increased by 2.7% in volume.
“When that category is up, it is very beneficial to the growers in Idaho,” he said.
About 20% of U.S. potatoes are exported, so any increase benefits U.S. growers by increasing profitability and reducing potential surpluses, Pemsler said.
Potatoes USA Chief Marketing Officer John Toaspern said U.S. exports were held back from larger increases despite strong growth in world demand and a short crop in the European Union, a major competitor. The U.S. dollar during the marketing year gained 2.9% on the Euro, raising the relative cost of U.S. potatoes.
Japan, mainly a buyer of frozen potatoes, was the top U.S. export market. Canada ranked second on high demand for fresh potatoes destined for processing into frozen products. Mexico ranked third but did less export business with the U.S.
Mexico’s 20% tariff on U.S. frozen fries, from June to May, drove a 25% decline in volume and a 21% drop in value.
China in September imposed tariffs of 10% on U.S. fries and 25% on U.S. dehydrated potatoes. Export dollar declines were 10% and 68%, respectively.
The U.S. had strong domestic demand, particularly in frozen and dehydrated categories, but a static supply of these products.
Strong domestic demand “is a great thing, and certainly a top priority for the industry,” Toaspern said. “We are very pleased to see how positive things are in the U.S.
“It does certainly have an impact on exports,” he said, “but the frozen processors are responding to that and building new processing capacity in the U.S. and Canada to, in essence, meet both the growing export demand as well as strong domestic demand.
Expanded processing capacity is expected to have a greater impact in the new marketing year, Toaspern said.