US potato production declined for the fourth consecutive year and this season’s crop is the smallest since 2010 This has led to potato prices surging to their highest levels. Strong demand for frozen potatoes also contributed to this price situation.
Strong open market prices and strong demand for frozen potatoes are typically sufficient reasons to raise contract prices, particularly since heightened demand for processing potatoes has gone unmet for two years running and fryers were able to pass on costs to consumers without a loss in sales.
Competitive open market and higher contract potato prices, an improved water outlook, and crop rotation pressures are expected to increase potato planted area by 2% YOY and lead to a 7% drop in price in the 2023/24 marketing year.
Source: research.rabobank.com