BusinessIdaho potato outlook somewhat brighter in 2017

Idaho potato outlook somewhat brighter in 2017


For Idaho growers looking for a bright spot in 2017, potatoes might be that crop — if potatoes are already part of the rotation.

Though Idaho and Washington are still the leading potato growing states, Idaho’s share has been slowly diminishing over time. Back in 1990, when Idaho growers planted 405,000 acres of potatoes, the Gem State represented 32 to 33 percent of the nation’s entire potato acres, said Ryan Larsen, an extension farm management specialist at Utah State University.

But in 2015, when growers planted 323,000 acres of potatoes, that accounted for just 27 to 28 percent of the total acres. Washington’s share has stayed fairly steady with growers planting 133,000 acres in 1990 versus 170,000 acres in 2015. North Dakota, the third largest potato growing state, has also seen production drop from 150,000 acres in 1990 to 82,000 acres in 2015.

Larsen says the potato market spent last year trying to stabilize. The potato marketing year runs from Sept. 1 to Aug. 31. Growers saw an uptick in prices to start the 2013-14 marketing year, then it was all down from there. The 2014-15 and 2015-16 marketing years remained flat at around $6 to $8 per hundredweight.

Since 2000, the average national price for fresh potatoes has ranged from a low of $7.34 per hundredweight for the 2003 crop to a high of $14.44 for the 2008 crop, according to the U.S. Department of Agriculture

Following the cycle of one to two years of high prices, followed by a period of low prices, potatoes seem primed to realize somewhat higher prices in the 2016-17 marketing year, Larsen said. He looked at three different forecasts before speaking at the University of Idaho 2017 Agriculture Outlook conference last month.

The USDA baseline forecast is for $6 per hundredweight. Another source gave a single moving average of $6.50 to $6.60 per hundredweight, while the third — indicating more risk — ranged from $7 to $8.

“If you’re looking for a bright spot,” he said, “potatoes have a chance of breaking even.”

While that’s not a great outlook, growers who are able to capitalize on market timing may be able to capture higher prices as some did in 2015 and 2016. Growers also benefited from favorable weather that produced a uniform crop. Eighty-two percent of the crop graded No. 1, up from 73.7 percent in 2015.

But even if the weather cooperates this year, global economic uncertainty and concerns about the new administration’s trade policy could limit marketing options.

Japan, Canada and Mexico are the top three export markets for U.S. potatoes, together accounting for about two-thirds of total exports. French fries are the top U.S. potato export, accounting for more than half the total volume. But if the North American Free Trade Agreement is renegotiated, two of those export markets could be jeopardized.

Exports are key to any price improvement, Larsen said. Per capita potato utilization in the U.S. has been leveling off but is still in a downward trend. Since 2000, the average American has consumed 55 pounds of frozen potatoes per year compared to 42 pounds of fresh potatoes, 17 pounds of potato chops and 14 pounds of dehydrated products. Not surprisingly, the top three potato varieties in the U.S. are primarily raised for processing rather than eating fresh.

While U.S. potato production is steady, world production increased 16 percent between 2006 and 2015, Larsen said.

“World supply increasing and demand flat or down could lead to future problems,” he said, adding that growers need to be aware of production costs and watch for marketing opportunities.

Source: The Times-News Online

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