The proximity to market, demand and a track record for producing quality produce has served as a catalyst for Michigan’s potato industry.
While the homely spud may seem like small potatoes next to high-yield cash crops like corn and soybeans, Michigan potato production generates $1.67 billion in annual economic activity, according to the Michigan Potato Industry Commission (MPIC).
A combination of market forces has the industry on a track for continued growth, despite shifting consumer eating habits and threats related to a plant disease, sources said.
“There is an unmet demand for Michigan potatoes,” said Jason Walther, president of Three Rivers-based Walther Farms LLC. “We’ve been growing. Our farm, along with all of our neighbors, is planning on expanding acreage in the state.”
Walther Farm currently cultivates approximately 6,500 acres of potato crop and has grown production 15 percent over the last three years, Walther said.
Statewide, potato production has increased 17 percent over the last eight years, up from 1.4 billion pounds in 2004 to approximately 1.6 billion pounds in 2012, the most recent data available from the USDA. Michigan potato production is spread across more than 47,000 acres. About 21 growers are active in West Michigan and more than half of them (12) are located in Montcalm County, northeast of Grand Rapids.
Montcalm County claims the highest concentration of growers in the state, said Adam Novello, program manager at the MPIC.
State growers dedicate the majority of their crop—approximately 70 percent—to potato chip production, said Mike Wenkel, director of MPIC. During the 1980s, the industry underwent a transition away from potatoes slated for french fry processors toward providing long-term storage for the potato chip industry.
“Michigan became a specialist in long-term storage for potatoes used to produce potato chips,” Wenkel said. “We supply almost every potato chip manufacturer east of the Mississippi River 10 months out of the year.”
Volatile commodity prices combined with stiff market competition have pressured growers to work largely with food processors, which operate primarily on a contract basis, Wenkel said. Approximately 20 percent of the state’s potato crop is sent to the fresh market.
The remainder of the crop is split between processed potato products and seed for the following year’s crop.
When it comes to the fresh market, Michigan growers tend to tout quality over quantity, Wenkel said. Farmers find it difficult to compete with the higher volumes of potatoes coming from states like Idaho. For example, Idaho increased its potato production by an additional 40,000 acres in 2012. The amount of land Idaho farmers added that year nearly matched the total acreage dedicated to Michigan’s potato crop.
However, Michigan growers have a leg up on their West Coast competitors when it comes to transportation costs, Wenkel said. With fuel prices on the rise and manufacturers battling to squeeze the most out of every truck mile, the state’s potato industry has a competitive advantage with markets along the East Coast—especially given the state’s focus on storage, he said.
“Michigan is one of the main storage sectors. We really have an economic advantage in the trucking distance to the east and southeast side of the nation over the other parts of the country,” Wenkel said.
Michigan production continues to grow despite potatoes falling in favor with U.S. consumers, Wenkel said. Once a staple of the American dinner table, nationwide potato consumption has declined because of a combination of dietary trends that pushed consumers to avoid carbohydrates and consumers’ pursuit of easy-to-prepare meals.
U.S. per capita consumption of potatoes declined approximately 20 percent since its high point in 1996 to 116 pounds per person in 2012, according to the most recent USDA data.
In light of the potato’s declining popularity, state and national organizations such as MPIC and the National Potato Board are making a significant marketing push to thrust potatoes back into the limelight.
“Michigan has seen positive numbers over the last three years,” Novello said. “Yields are up from farmers, demand is high and organizations are continually promoting healthy recipes for potatoes.”
Despite the overall positive outlook for the state’s production, a disease called “ate blight — the same condition that caused the Irish Great Potato Famine — has threatened potato crops across Michigan, said Chris Long, a liaison between the Michigan State University Department of Plant, Soil and Microbial Sciences and the MPIC. The disease could potentially result in a loss of up to 20 percent of this year’s crop and threatens to infect potatoes in storage if they’re exposed to it. Additionally, growers could spend an additional $200 an acre to increase fungicide programs.
Disease-related concerns aside, Long remains positive about the future for potato growers in the state.
“The industry is in a really good position,” Long said. “I’m pretty confident that our climate and proximity to the eastern U.S. population really creates some good opportunities for the Michigan industry going forward.”
Source: MIBiz.com