Potatoes continue to be in an extreme oversupply situation in the U.S., and globally. "There's no end in sight to that overproduction," says Ken Gad of Cambridge Farms, Inc.
That's a nod to a shift in the potato industry that Gad says needs to happen but hasn't yet. Namely adjusting acreage to accommodate shifts in consumption trends, such as consumers not buying large 5 or 10 lb. bags of potatoes as much anymore and instead, turning to smaller convenience packs of mini potatoes. Those are the kinds, Gad says, that growers used to throw away. "We can't keep producing the same amount of potatoes and expect they're going to use them when we're using more of what we grow," he says. "For years we have been growing roughly the same 425 million hundred-weight potatoes and we used to shrink a lot more of them. Now that we're putting the Bs and Cs out, they're taking shelf space away from size A."
Add in using more number 2 potatoes in "value" packages, in turn that's leaving even less shrink. Yields have also improved over the years thanks to growers growing more efficiently. "The fact is we're still growing too many potatoes and overall consumption has lessened or we're consuming differently," says Gad.
© Cambridge Farms
Global development in processing potatoes
On top of that, the processing side of the business is also backed up. Globally, regions have learned and developed their own processing potato crops and built facilities accordingly which has also lessened demand for U.S. processing potatoes.
Meanwhile, demand a week ahead of Thanksgiving is perhaps on the slower side. "We haven't seen the normal pull we would have and we're not sure why–I've heard a lot of people say they're off," says Gad, adding that this year's Thanksgiving is a week late and a demand surge could still come. There are also indicators that historically, retailers have overordered going into the holiday and thus, left with inventory after it. "Some have said they've decided to not buy a lot early and then fill in as needed and with all the regional repackers, they'll be able to do that."
All of this is leaving pricing on the softer side for potatoes this season.
For more information:
Ken Gad
Cambridge Farms Inc.
Tel: +1 508-297-2630
[email protected]
https://cambridgefarms.wordpress.com/
