The bulk of potato shipments from Virginia’s Eastern Shore are chip-stock potatoes, and the 2017 market is looking up for growers of those varieties.
Potatoes constitute a small but substantial share of cropland on the peninsula, and nearly 30 growers gathered recently to hear the 2017 market outlook during the annual Eastern Shore Agricultural Conference and Trade Show in Melfa, Va.
“Most of our best pricing years have occurred following decreases in production,” said Brett Richardson, marketing specialist for the Virginia Department of Agriculture and Consumer Services, who delivered the presentation. “When we have a better year, it’s not because people are suddenly buying more potatoes. It’s very supply-driven, and when supplies are down in competing areas, we will have a better year.”
Predicting this year’s potato market relies heavily on the fall harvest, which accounts for 92 percent of potatoes grown in the U.S., Richardson said. Harvested acreage was down 4 percent from 2015 but yields reached record highs, making up for that decrease, he said.
“As a result, fall production is up,” said Richardson, but “it’s not up a whole lot. It’s up less than 1 percent.”
North Dakota received heavy rains and hail during the 2016 growing season, causing farmers to abandon nearly a fifth of their fall crop. The hardest-hit regions focus on red and chip-stock potatoes, meaning supplies of both are down, which bodes well for Virginia growers.
“Every case where we have the higher prices has to do with some type of production decrease, whether a weather incident or just lower acreage in production,” said Richardson.
Another factor affecting potato demand is storage left over from the fall. In December, about two-thirds of the fall crop remained, which is typical for this time of year. Canada’s stocks are down, though, meaning demand for U.S. potatoes could rise this year, Richardson said.
Current chip-stock supplies are down due to low yields and large crop losses in important growing areas, leading chip companies to pressure Florida growers to increase their acreage. Growers in Florida can’t grow as fast as the industry wants them to, though, leaving North Carolina next in line to pick up production.
North Carolina shares a similar potato season with Virginia and big spikes in production there could hurt Virginia potato growers, Richardson said. But increased demand could also benefit local planters.
“The main question is, can they increase acreage as much as the industry wants? Probably not,” said Richardson. “It’s going to be a better situation for us. I just don’t know how much better.”
Richardson urged growers to watch for increased acreage of chip-stock potatoes, especially in Florida and North Carolina, this year. If they cannot keep pace with industry demand or bad weather hinders their harvest, that should boost demand for Virginia potatoes.
Richardson also encouraged growers to watch Canadian chip-stock supplies as shortages will help predict whether prices are likely to rise in 2017. As always, weather will play an important role in this year’s market, and that remains unpredictable.
To help farmers get a better idea of what to expect in 2017, Richardson revisited the 2016 potato market. Weather posed challenges to local growers, but cloudy skies also benefited some.
The Eastern Shore’s potato harvest begins in late June or early July, when prices are typically low as Florida unloads its crop and North Carolina is launching its new crop of potatoes.
“Typically, prices fall quite a bit in that month, right about the time we’re getting ready to start harvesting,” Richardson said.
But prices for Virginia round white potatoes were up significantly in 2016 after Tropical Storm Colin closed Florida’s harvest early in June.
“If it hadn’t been for that tropical storm, I think prices would’ve been … down,” said Richardson. “Because of the abrupt end to Florida’s harvest, there was a gap, and it caused prices to firm up.”
Round red potatoes didn’t fare as well due to substantial supplies from other areas coupled with only moderate demand.
“Once supplies start becoming available in the Midwest in late July and early August, it’s difficult for us to compete,” said Richardson. “They have a nice quality red, good color. They’re not bashful about lowering the price to be competitive in eastern markets. We need to get those reds moved and out by late July.”
Yellow-fleshed potato prices were also slightly down in 2016 due to light to moderate demand.
Russet potatoes saw a small jump in price over 2015, when markets were flooded with the high-starch spuds, but the market was “not as good as what we had seen,” Richardson said.
The Eastern Shore’s most prolific potatoes, those bound for the chip sector, stayed stable in 2016. At more than 40 percent of local shipments last year, chip-stock potatoes remain an important crop on Virginia’s Eastern Shore. Most sales are through preseason contracts, which saw a slightly lower price in 2016, Richardson said.
“We’ve been seeing the chip-stock contract prices creep down here these past few years,” he said. “I think that’s going to change this year” thanks to Canadian shortages and a bad growing season in North Dakota.
Potato growers gather to hear the market outlook during the Eastern Shore Ag Conference each year as well as to learn about new research, get updates from the state’s General Assembly, and network, said Theresa Long, Accomack County agricultural and natural resources extension agent.
“This is the time where they meet, they talk, they get their year started off,” Long said. “The whole program really is tailored to the here and the now.”
“A large part of the farming community comes to it,” said Butch Nottingham, eastern region marketing specialist for the Virginia Department of Agriculture and Consumer Services. He helped launch the event 27 years ago, and “it’s grown every year since.”
Source: Lancaster Farming