Severe weather events across the U.S., including above-normal temperatures in parts of California and the destructive forces of Hurricanes Helene and Milton in Florida, significantly hindered production of the country’s domestic vegetable growers.
The University of Florida’s Institute of Food and Agricultural Sciences (IFAS) estimates damages from Hurricane Helene alone to be between $10.5 million and $38.2 million for Florida’s vegetable, melon, and potato producers.
These challenges are reflected in the USDA’s latest report, forecasting U.S. potato production for 2024 at 417.8 million hundredweight (cwt), a five per cent decline from the previous year.
Despite both harvested acreage (anticipated to be down four per cent) and yield (projected to decrease by one per cent), fresh potato grower prices in the early months of the 2024 potato marketing year (September to November) have remained relatively flat. This could indicate the market’s resilience in the face of production challenges.
Harvested Acreage and Yield Trends
The anticipated average yield for 2024 stands at 453 cwt per acre, which, while the third highest on record, remains behind the yields of 2020 and 2023. Notably, growing conditions varied significantly across the country. States like Washington, Oregon, Michigan, and Maine achieved historically high yields, whereas Florida and Wisconsin experienced yields below their respective five-year averages by 10 per cent and nine per cent.
Outlook: December 2024
State-Level Production Insights
In 2024, Idaho and Washington continue to lead U.S. potato production, contributing 32 per cent and 24 per cent of the total crop, respectively. Meanwhile, Wisconsin is expected to fall to fourth place behind Oregon this year. Wisconsin growers reported adverse effects from spring rains, leading to the lowest average yield seen in the state — 380 cwt per acre — since 2002.
On the flip side, three states are forecasted to see increases in production: Michigan, Maine, and Colorado. Michigan and Maine expanded their planted acres by two per cent, while Colorado’s two per cent decline in planted acres was balanced by a three per cent increase in yield.
Economic Implications: Grower Prices
The 2023/24 season average potato price has dipped to $12.3 per cwt, a five per cent decrease compared to the previous year. This decline is largely due to a 29 per cent drop in the average fresh market price, overshadowing an 11 per centincrease in processing prices.
With much of the potato crop earmarked for processing, it’s worth noting that fresh potato prices can fluctuate according to production changes, whereas processing prices tend to be more stable due to pre-established grower-processor contracts.
Fresh Potato Retail Prices and Market Trends
Fresh potato retail prices from December 2023 to October 2024 have remained consistently lower than the previous year. The average retail price showed a seasonal drop for three consecutive months from August to October 2024 after a summer surge.
In line with increased imports, the value of frozen vegetable imports has risen by seven per cent, with frozen potato imports specifically up 12 per cent. These trends illustrate a growing dependency on frozen potato products, which account for about 54 per cent of the volume and 50 per cent of the value of processed vegetables over the last three years.
Potato chips also saw a surge, with their value increasing by 25 per cent and volume by 10 per cent. Retail sales data for the potato sector during the July to September quarter shows potato chips represented 50 per cent of the total sales revenue from potato products.
Outlook: December 2024
The Frozen French Fry Trade Deficit
The 2023/24 marketing year saw the United States continue its trend as a net importer of frozen French Fries, marking the fifth consecutive season the U.S. has been a net importer by volume and the third by value. Notably, U.S. frozen French Fry export volumes fell two per cent, with imports reaching a record high of 2.7 billion pounds.
Canada remains the primary source of imported frozen French Fries, accounting for 86 per cent of the volume, followed by the European Union at 13 per cent. This trend highlights the continuing reliance on international sources to meet domestic demand for frozen potato products.
The 2023/24 marketing year saw U.S. frozen French Fry export volume at 1.74 billion pounds, marking a two per cent decline from the previous year and the lowest volume since 2010/11. Despite a three per cent increase in exports to major markets such as Japan and Mexico, other regions experienced double-digit declines, notably in Saudi Arabia, Malaysia, China, Indonesia, and Australia. The ongoing imbalance in trade indicates that while U.S. producers are still a significant player in the frozen vegetable sector, competition and market dynamics are shifting.
Outlook: December 2024
