“All signs along the East Coast are that harvests went well and will finish early,” Ken Gad, owner of Cambridge Farms in South Easton, Mass., told The Produce News in early October. “Like our own crop, we’re also hearing that the East has good quality. Volumes are also good, and prices are okay. Growers don’t expect to hit home runs every year.”
He added that when you give customers quality and fair prices, things tend to work out, but if everyone in the country has quality and yields it can place downward pressure on prices.
“The end scenario when this occurs is that growers get a poor return,” said Gad. “We won’t know until early to mid-December when everything is stored and cured. The type of early fall ads the chain stores run also has a bearing on the market.”
Ads, he stressed, are very important. The question growers always face is if stores will have the ability to move the crop through their channels in ways that result in returns that are satisfying.
“Besides quality and fair pricing, it takes proper sales offerings, good promotions and even foodservice incentives to push potatoes through the pipeline at prices that will give growers the return they need to continue,” said Gad. “We ask our growers to improve their packing facilities through third party audits and inspections every year. This too has a bearing on sales.”
Huge amounts of potatoes are produced each year in North America. Gad explained that in December growers are able to determine how much of their crops got shipped and if numbers are equal to the prior year. If they have a larger crop on hand they may discover that it’s not disappearing fast enough.
“If you don’t catch up with sales in December, there’s a possibility that you’ll have problems in January and February,” he noted.
He also expressed a little concern about Idaho’s smaller size profile this year. If the state has large volumes, but smaller sizes, a lot of its potatoes will end up in consumer bags, thereby putting price pressure on the market. Other states, Colorado, Wisconsin, North Dakota and Washington included, are all citing high-quality crops.
He concurred with others that transportation is a major issue for the entire produce industry. Part of the problem is unloading fees and pallet costs.
“Some unloading fees have gotten crazy, and pallets are always an issue,” said Gad. “Truckers don’t want to pay these costs, so who is going to eat them? Farmers can’t sell product if it’s not in packages, and you can’t put product on pallets without packaging.
“Expenses across the board are high, and the farmer is at the bottom of the hill so he takes the hit,” he continued. “If they can’t afford the expenses they go out of business.”
He also pointed out that many farmers farm because they really like doing it. But when things get tough they often end up selling their land to developers because the return is so much better than farming. Gad calls these situations “land-rich but cash-poor,” adding that everyone has to be on key so that everyone gets to come back and play again next year.
Fortunately, consumption of potatoes is good because they’re strongly promoted. The low-carbohydrate trend of the 1990s is, Gad said, “out the window. Potatoes have tremendous nutritional value, and, theoretically speaking, you can live off them.”
Other challenges growers face today are the cost and confusion over food safety and traceability. Gad said that an industry standard is called for. When chains require different types of certification it places even more hardship on growers.
“You simply cannot have one major chain saying they want one brand of certification and another demanding a different one,” he said. “The U.S. Potato Board, which is run by potato growers, needs to get out there and somehow canvas the retail chains and other buyers and pick an initiative that is suitable to everyone and works for every commodity.”
Having celebrated its 30th year in business last year, Gad said he looks forward to continuing to service customers in the same efficient and professional manner they have become accustomed to.
“We also look forward to adding new trading partners in our goal to continue to grow and be a force in the industry,” he said.
Source: The Produce News