Potatoes

Potatoes are blooming and the crop looks good near American Falls recently.

    Timing is key for potato growers to get a good price and the market is soft right now.

    As Idaho fresh potato prices started to rise this spring, some may have hoped the higher prices would have remained. But within the past few weeks the Idaho potato industry experienced an estimated 40 percent drop in potato prices.

    Paul Patterson, an agriculture economist for the University of Idaho Extension research office in Idaho Falls, said this time of year there is a transition between selling last year’s Idaho Russet Burbank potatoes that have been in storage and this year’s crops coming into the fresh market from other states.

    He said the price drop witnessed in June was may have “caught people by surprise.”

    “The price volatility in potato market is not unusual,” Patterson said. “The big issue is that a lot of people anticipated when prices started to move, we would have at least sustained that to the end of the shipping season. But I think a lot of people thought the market would stabilize at the higher price rather than drop.”

    Bruce Huffaker, publisher of Shelley-based North American Potato Market News, believes people may have panicked.

    “Since the beginning of June, potato prices have dropped more than 30 percent on shipping-point prices,” Huffaker said. “There is just a lot of market psychology. People apparently panicked and tried to ship more potatoes in a short period of time than what buyers wanted to pay prices for.”

    The result was a drop in prices.

    Patterson said market reports track the prices to shippers and to growers, and seeing the prices for shippers drop could actually mean grower returns dropped about 40 to 45 percent.

    Patterson said even when the prices to growers were in the $7 to $8 range, those prices were still below what they were paying to be shipped.

    In a note with the monthly figures, Patterson said “even after prices improved, growers were still losing money — just not as much. Now they are recovering less than half the cost of production and storage.”

    As of Thursday, the high and low Idaho potato shipping prices for 60-80 count, 50-pound cartons were between $15 and $22, based on information found online on the Federal-State Market News website at www.ams.usda.gov.

    When the Idaho Falls Federal-State Market News office was contacted for information on prices, the Journal was directed to the Market News website.

    Shipping prices began to rise in May, and by the first week of June shipping prices for the 60-80 count, 50-pound cartons had reached $31 and by the first week of July dropped to $16. Those amounts are also the high and low shipping prices for that category since the last week of September 2013.

    The information came from a report of weekly shipping prices. The average shipping price in the same category was between $20.68 and $20.71.

    Patterson said consumers might not see much price difference at the supermarket, but the price drop heavily affected the shipping price of 50-pound boxes or cartons.

    “The non-size A typically go into the consumer pack and the cartons go into the industrial trade, typically food service and restaurant,” Patterson said. “Where we’ve seen the biggest decline has been in the price for the cartons that has dropped more than the price for the non-size A. The non-size A prices are down 10-15 percent, where the carton sized are down 45 to 55 percent.”

    Patterson believes this is a critical time for prices in the Idaho potato market going into the new crop year.

    Huffaker declined to speculate on what other factors may have contributed to the sudden drop in price.

    “The issues that face people in the marketplace all the time, which is the competition between greed and fear,” Huffaker said. “At least for the past month or so it appears fear has won out on that competition for whatever reason.”

    The drop could be an issue of supply and demand; if there is too much supply on the market prices go down; too little supply, prices go up. Historically speaking, Patterson said potato prices drop more easily than they rise.

    Hot weather could also play into the decision to sell no rather than wait for the potatoes to sit in storage past their salable life.

    Even with returns to farmers dropped into the $4 range, growers might be more willing to take $4 per hundredweight over 25 cents per hundredweight if they hold out too long and sell the potatoes for feed.

    “If they don’t have that (air conditioning) those potatoes will start to deteriorate, and they’ve got to start to move those potatoes,” Patterson said. “(They) have to move them into the market or they will no longer be marketable.”