Potato growers in North America are facing the most complex planting decisions in decades, the Jan. 27 issue of the North American Potato Market News (NAPM) says.
The report says current supplies of processing and table potatoes are tight, while potato prices in the United States are extremely strong, relative to past prices. Prices for other crops though are also extremely strong.
Production costs are also increasing. NAPM says operating expenses for fertilizer, chemicals, fuel, repairs, and labor are expected to increase again in 2022. Land rental and interest rates could also increase.
“Growers may chose to cut potato acreage and plant alternative crops due to strong prices, lower input requirements, and reduced capital needs,” the report says.
When looking at the October-December relative strength index it show a mixed outlook for 2022 potato acres. NAPM says the price response model suggests growers could plant two per cent fewer potatoes. But a review of surrounding data points suggests there is a 50/50 chance growers will plant more potatoes this year than they did in 2021.
NAPM expects processing contract volume increases will boost the 2022 planted area, while there will be a decline in chip potato acres. Dehydrators also may contract for more field run potatoes in 2022 than they did in 2021.
Currently contracting for the 2022 chip potato crop is moving forward slowly. The report notes early contract prices are up 18 to 22 per cent with contract volumes down five to 10 per cent.