Russet potato supplies are tight, boosting prices
BURLEY, Idaho – While potato production nationwide in 2017 fell less than 1 percent, things were very different in the Pacific Northwest.
Combined production in Idaho, Washington and Oregon this year fell 6.3 percent on 21,000 fewer planted acres, according to the December crop production report by USDA National Agricultural Statistics Service.
In 2016, PNW production accounted for 60.9 percent of national production. That dropped to 57.5 percent in 2017, Bruce Huffaker, a potato market analyst, told growers attending the University of Idaho’s annual Idaho Ag Outlook.
The decline is significant as the region produces 78 percent of all potatoes processed in the U.S. and 61 percent of fresh russets produced in the U.S. While there’s no hard data, Huffaker would guess russets make up about 85 percent of the PNW crop.
“I think we’re coming up to a situation with russet potatoes where we’re going to run into crunch time on supply,” he said.
PNW stocks on Dec. 1 are estimated to be down 9 percent year over year. Processing usage June through November was up slightly and fresh usage was down only 0.8 percent – meaning the crunch is ahead.
“We did not cut back on usage during the first six months; all that (shortfall) has to come in the next six months,” he said
Processors and fresh buyers are going to be competing with each other for supply. Fryers have locked in most of what they need, so the competition will be between fresh buyers and dehydrators, he said.
He’s expecting PNW stocks to be 31.4 million on May 31, down 16.7 percent year over year. There could be as much as a 22 percent decline in fresh shipments December through June but with processing flat, he’s expecting fresh buyers to pull some supply out of processing channels.
But there’s no way to make up for all of the shortfall on table potatoes. Fresh shipments aren’t going to be anywhere near what Idaho shipped last year, he said.
Markets are already reacting to the tight supply, boosting russet prices more than 50 percent compared with a year ago. Prices in Idaho for Russet Burbanks for the fresh market are averaging $18.57 a hundredweight, and Russet Norkotahs are running $17.34. Prices to growers are close to $9 a hundredweight, compared with about $4 this time last year, he said.
Production is down nearly 8 million hundredweight and 5.7 percent in Idaho, 6.6 million hundredweight and 6.3 percent in Washington and 2.2 million hundredweight and 9.4 percent in Oregon, NASS reported.
After the fifth year of prices below cost of production in 2016, growers — especially table potato growers — were faced with tough planting decisions last spring. In Idaho, there was also a lot of uncertainty with a large processing operation in eastern Idaho changing hands, Huffaker said.
While prices on competing crops were weak, the situation decreased planted acreage. In addition, yields weren’t quite as good as they have been, he said.
Growers planted 15,000 fewer acres in Idaho, 5,000 fewer acres in Washington and 1,000 fewer acres in Oregon. Yields per acre were down 5 hundredweight in Idaho, 25 hundredweight in Washington and 40 hundredweight in Oregon, NASS reported.