Is there a new floor on pricing potatoes this season? This is the question growers and shippers are wondering about as they’re embarking on the 2022-2023 fresh crop of potatoes.
“We’re trying to figure out what the pricing structure is going to look like for the fall,” says Ken Gad of Cambridge Farms Inc. Last year, growers and shippers went into the season knowing there was a short crop due to harvest conditions. “But the biggest factor in pricing for this crop is the cost involved to grow it. We can talk about size profile, yields, demand, etc. But we have to look at the cost of the goods. Getting this crop into the ground was at the peak of fuel pricing, fertilizer costs, seed costs and more. Regardless if it’s a bumper crop or the shortest crop we’ve ever seen--growers are going to have to put a floor on this crop and they will.”
This follows the stronger pricing seen last year because of that short crop--a move that Gad says effectively set new, somewhat realistic floor pricing.
Regional crop reports
Right now, the North American potato crop is in a very early transition position and regions, including Idaho, Colorado and Wisconsin, are later to get started. “This allows us to really make a hard push on our summer crops,” says Gad. Following a clean-up of supplies, that later start means there hasn’t been much overlap. “But now that these other regions are starting and on top of each other, markets are falling a lot more rapidly than we normally would,” says Gad.
Reports are still being determined as to what regions are seeing for this year’s crop. Idaho has mixed reports about yields--however, the large size profile on Russets may be an issue. North Dakota meanwhile seems to have an average crop and Wisconsin pricing indicates they have better sizing than Idaho. Nebraska and Kansas could potentially have issues around maturity. “There are also predictions of early frost so if there’s an early frost in Idaho or Colorado, we’re right back in the same situation we were this season,” says Gad.
Regionalization could also be a factor in this season’s potato pricing. “The regionalization should happen as long as each region is realistic about their FOBs,” adds Gad.