Markets Should Reward Lowered Supply

Published online: Sep 08, 2017 Articles Tad Thompson, The Produce News
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Early estimates suggest that Wisconsin’s potato crop may be down roughly 5 percent this fall. However, if prices hold strong, as they were in late August, the decreased supply is more than compensating for the lost production.

Tamas Houlihan, executive director of the Wisconsin Potato & Vegetable Growers Association (WPVGA), estimated that Wisconsin’s fresh potato crop would be about 27 million hundredweight for the 2017 growing season. The 2016 fresh crop came in at 28.5 million hundredweight.

In late August, Houlihan said growers were enjoying great potato prices.

“The market is fantastic now,” he said. “They [prices] have gone through the roof. There is very strong demand now.”

Houlihan said Idaho russets were averaging $24 per hundredweight, while Wisconsin fresh market russets were bringing $22—$4 per hundredweight higher than a year ago. Idaho’s fresh russets are up $8 over a year ago.

“We typically see high prices in August, but these are very good prices and have strong demand,” he said. “The growers are very happy. If everyone is down 2 or 3 percent they can make more money. Less product means stronger demand.”

Houlihan added that Wisconsin’s potato quality “is very good. Everybody at our last board of directors meeting said the quality was excellent. They were disappointed in the size and yield.”

Potato sizing in Wisconsin this year is down because the crop was planted behind schedule in the spring. The result is the growing season is seven to 10 days late, according to Houlihan.

Growers will be leaving potatoes in the ground as long as possible to give tubers time to bulk up. Rather than starting Sept. 1, Houlihan foresees the earliest harvesting being held back until Sept. 11.

To avoid the earliest possible damaging frost, Wisconsin’s potato growers normally end harvest by Oct. 10. The digging this fall may go until Oct. 15 or 20 to gain as much growing time as possible for a product that is gauged by weight. Growers, of course, “will hope for a late frost,” Houlihan said.

Lower yields this year will impact different growers to various degrees. Some areas will see a 3 percent decline in volume while others may be dinged by 10 percent. Some seed potato growers in the Antigo, Wis., area had such wet fields that they never did plant certain acreages.

Houlihan said national red potato sales volume for 2017 is up 25 percent over the same time period in 2016. Yellow potato sales are up 35 percent.

Speaking in general terms, he said russet potatoes now account for about 70 percent of U.S. production. Reds are up to 20 percent and yellow potatoes 10 percent of the total national crop.

These and the specialty potatoes like fingerlings “are all growing in the marketplace,” Houlihan said.

Meanwhile, value-added potatoes—which are wrapped for microwaving, in trays or sold with seasonings—are also popular with a U.S. populace concerned with convenience. This “especially included millennials. The part of the population willing to bake potatoes in an oven has greatly declined,” Houlihan said. “They want to microwave a potato in six minutes, and more and more shippers are providing that.”

Houlihan said that Wisconsin potato shippers tend to export to Canada much more than they do to Mexico. However, Houlihan said the potato members of the WPVGA still want Mexico to loosen up on its restriction of U.S. potato imports.

This is consistent with the philosophy that “a rising tide raises all boats,” Houlihan said. Any U.S. potatoes leaving the country will reduce supplies—and increase prices—within the domestic market. He said it is primarily Colorado and Idaho growers who export to Mexico.

Wisconsin is the nation’s third-largest potato producer, and No. 1 east of the Mississippi, according to Houlihan. Frito-Lay is now a very large presence in the Badger State and one-fourth of Wisconsin’s potatoes are sold into the processing market.

Another 10 percent of the state’s potatoes are sold as seed and have a great reputation for their “very high quality,” Houlihan said. “We feel we have led the nation in returns to growers over the last five or 10 years. Our growers do a great job.”

 

Source: The Produce News