An Unbiased Estimate

Potato Cost of Production Project

Published in the January 2013 Issue Published online: Jan 23, 2013 Paul Patterson, UI Extension Agricultural Economis
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How much does it cost to raise potatoes in Idaho? When asked this question, I often give the response that economists frequently give to almost any question: "It all depends."

There are a number of factors that influence production costs: variety, location, water source (surface or groundwater and pumping lift), type of irrigation system, length of storage, etc. Also, are you interested in costs per acre or per cwt?

Bottom line, there is no single cost of production value. Every grower has different costs, as does every field that a grower farms. But having a standardized benchmark to track production costs over time can be useful.

Providing these benchmark values is something that the University of Idaho has been doing for many years.

The crop enterprise budgets are available as individual pdfs, as an Excel spreadsheet file containing all the crops budgets for a region, and as a data file for the University of Idaho's Crop Enterprise Budget Worksheet program. These can all be downloaded free of charge. Select the year, the format (PDF, Excel or CEBW), region and then the individual budget or data file.

The link to crop enterprise budgets is www.cals.uidaho.edu/aers/r_crops.htm. Because the Idaho potato industry is interested in tracking changes in production costs on an annual basis, the Idaho Potato Commission has funded my cost of potato production project for nearly 20 years. The overall goal of this project is to provide the Idaho potato industry with an unbiased and consistently calculated estimate of the cost of producing potatoes in three regions of Idaho, and to track the change in production costs per acre and per cwt over time.

The primary product of this project is a report that includes summary tables on aggregate production costs changes per acre and per cwt, as well as detailed changes for each enterprise budget and class of inputs for 10 potato budgets currently supported by the University of Idaho. More recently, the industry has asked me to provide five-year production cost trends. These reports, both current and historical, can be found at the following link: www.cals.uidaho.edu/aers/r_project_reports.htm.

A Cost of Production Advisory Committee meets with me annually to review the report and to discuss issues related to cost of production. In recent years, this meeting has been held the day preceding the Idaho Potato Conference. The members of the Committee include growers, processors, grower organizations and members of the Idaho Potato Commission. The meeting is open to anyone from the Idaho potato industry.

So, how much does it cost to raise potatoes in Idaho? Table 1 shows production costs per acre for 2011 and 2012, and the percentage and dollar change between these two years. Table 2 provides cost of production data and changes, but on a cwt basis. A more detailed analysis can be found in the annual report. Chart 1, which comes from the five-year trend report, shows the cumulative cost change per acre for the eastern Idaho potato budget with storage costs from 2007 to 2012.

Visit PotatoGrower.com, select "Extras" and click on the link for "2012 Cost of Potato Production Comparisons for Idaho."

You can also go to the Agricultural Economics Department website (www.cals.uidaho.edu/aers), click on "Resources" and then "Reports." 

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