Stable Pricing Expected Despite Harvest Issues

Published online: Dec 22, 2017 Articles Rand Green
Viewed 1036 time(s)

Source: The Produce News

A map of shipping locations on the Potandon Produce LLC website shows 25 different locations around the U.S., plus one in Canada, in addition to seven facilities in the company’s home state of Idaho, from which Potandon ships potatoes.

The company also ships onions from various producing areas, but that’s another story.

With regard to Potandon’s potato packing and co-packing network, “our philosophy is to be able to get potatoes to people any day and every day of the year,” says Steve Elfering, vice president of operations at Potandon.

Potandon packs its potatoes under several house labels as well as private labels, but “the primary focus of Potandon is the Green Giant Fresh label,” Elfering says. “That is the core of our whole marketing program.” That applies to russet varieties, colored varieties and specialty potatoes.

Even value-added retail consumer packs of specialty potatoes such as Microwaveable Klondike Gourmet Potatoes with several flavors of sauce sport the Green Giant Fresh name and art. The company also packs several house and private labels.

“The heart of our potato sourcing,” both for russets and for other varieties, “is Idaho,” Elfering says. “That is what everything else builds off of. And most of what we ship here comes from our own ownership group or our dedicated supply group.”

That is also true for most of the potatoes Potandon sources from other growing areas. On the production side, “we want the core of our business to be tied to the ground” through arrangements with growers to assure the company’s ability to ship the large volumes customers are expecting year-round. With the consolidation process that has taken place in both the retail and foodservice sectors, having a dedicated supply of product is necessary to “take care of the large customers …, to match our massive scale with theirs, and to be able to take care of them year-round from an f.o.b. standpoint,” Elfering says.

Outside of Idaho, Washington is Potandon’s largest-volume potato growing area for russets and colored potatoes. “We also have operations … in Arizona, which are variety potatoes — reds, yellows and minis,” says Elfering.

As with Idaho, most of the Washington and Arizona production “comes from our ownership group or dedicated supply group as well,” says Elfering. Some growers in Arizona are also Potandon owners, but there are “longstanding exclusive marketing agreements there as well.”

Potandon has variety potato operations in North Dakota as well, through a dedicated marketing arrangement. In Texas, Potandon has what Elfering calls a joint marketing effort. Other states in the Potandon f.o.b. network include Colorado and Wisconsin for russets and Minnesota for reds and yellows.

In addition, “to complement our f.o.b. shipping supply,” Elfering says, “we have an extensive in-market supply as well for shorts, small orders, last-minute orders, same-day or next-day delivery.” That consists of “various regional in-market packers in such areas as Boston, Cleveland and Atlanta. All pack for Potandon in the Green Giant Fresh brand. The in-market network also helps assure timely delivery to customers when severe weather might otherwise create one- or two-week gaps in the f.o.b. shipping.

“We try to ship ahead to the in-market packers” so that when certain product lines “are gapping at an f.o.b. shipping point, we can keep shipping them out of the local or in-market packers,” says Elfering.

The potatoes for Potandon’s mini potato line come primarily from Arizona and Washington on a year-round basis.

“One of the keys to our yea-round mini program is we have our warehouse here in Idaho Falls that we bring a large portion of our minis to,” Elfering says.

That enables the company to consolidate a pallet or two of those specialty products with shipments of other Potandon products such as Idaho russets destined for customers “all the way to the East Coast through our distribution network.”

Elfering also commented on the 2017 potato harvest nationwide and the market outlook for the coming year.

“There is the potential this year for … a fairly decent market nationwide on russets, due to the combined effect of reduced acres and weather-related reduced yields in some locations,” he says.

Some producing areas such as Washington shipped heavily during the harvest due to good markets, “which further shortened the storage crop in those areas,” says Elfering.

In Idaho, the supplies available for fresh shipments may be further diminished by high demand from the frozen potatoes processors, he says.

“They may look to the fresh industry for some supplies. …I think the market outlook is good from a price standpoint.”

With regards to quality, Elfering said, “There is some really good quality,” but overall, “would say the quality is good but mixed.”

Gabe Boldt, variety manager for Potandon, sad that with regard to yellow potatoes, there was strong demand toward the end of the 2016-17 marketing season and into the 2017 harvest. As a result, “there was a lot of product that was moved” during the summer. However, harvested acreage appears to have been up overall, so he expects above-normal supplies for the storage crop.

On the reds, Boldt says, acreage was down a little, but yields were up a little. Overall, the crop size appears to be about average.

As to quality, much like with the russets, “we are going to have a mixed bag” due to “temperature issues throughout the harvest season,” Boldt says.

He expects pricing to be pretty stable throughout the year.