Idaho Growers Start Negotiations
Idaho potato growers have started initial rounds of negotiations for the 2004 crop year and have completed with fryers in Idaho.
No settlements have been reached to date. The message from the fry industry consistently states that the decline in french fry demand continues, although it appears there is some moderation in the downward sales trend.
Overcapacity in the industry also continues to be a very real concern for processor customers.
The sustained high temperatures experienced statewide during the 2003 growing season, according to the Southern Idaho Potato Company, created challenges for processors and growers alike.
Below average specific gravity and color issues are a key quality concern for the processors. This combined with a preponderance of small potatoes has resulted in average grower returns significantly below the negotiated price and in many cases below the cost of production.
It is evident, according to SIPCO, that production in Idaho may still be too high and that further reductions are necessary to balance the supply/demand equation in order to increase grower returns to a profitable level.
Growers are being asked to study the new Univeristy of Idaho cost-of-production indexes for both field delivery and storage returns and compare their costs with the U of I's estimates.
Significant increases in many production cost areas have resulted in a risk-return profile that has many growers questioning the continued feasibility of commercial potato production.