Potato supply for the winter will be plentiful. "Every storage area that I have spoken with had a great Russet potato crop come in. The quality looks really good pretty much everywhere," says Ken Gad of Cambridge Farms, Inc. "Overall everybody also harvested on time or even ahead of time because the weather cooperated tremendously. It was almost to a point where it's been too warm and too dry in many areas."
Of course, that means there will likely be an abundance of Russet potatoes available this winter. Regionally, growing regions such as Idaho didn't reduce their acreage enough this season to avoid a too plentiful crop. Add to that the fact that processors have also cut back their demand for Russet potatoes. In turn, that will mean ample potato supply destined for the fresh market.
East Coast outlook
On the East Coast, regions such as Maine and New Brunswick also have strong potato crops with good quality and tonnage. "There's also a good size profile on the East Coast with plenty to offer in a good size A package," says Gad.
Gad says the potato supply for the winter will be plentiful.
However, back across the country in states such as Idaho and Colorado, there are excessively large size profiles which could be a problem when supplying normal holiday business in consumer packs. "They're going to way overproduce their large cartons of 40s, 50s, 60s, and 70 counts," says Gad. "They can't move them fast enough and they've got an exceptionally large supply of that in their storage."
All of this means that in Russet potatoes, the strong supply will lead to not as high FOB pricing. Segregation in the potato category is also factoring into this pricing. "You want X dollars, you're going to get X minus 25 percent because we don't need to use them as quickly as you need us to use them. Taking X minus 25 percent will give them the volume they need to move and it is still going to give them a better return than they had last year," says Gad.
Production on reds
On red potatoes, growing areas such as North Dakota, Manitoba, and other parts of Canada are all seeing a very large crop of red potatoes. Potato quality is also strong.
Meanwhile, yellow potatoes continue to gain popularity and also continue to overtake round white potatoes in production. "During the storage season, we are growing less and less white potatoes, even in northeastern regions such as Maine which cut its teeth on white potatoes. Very few people are growing and packing them like they used to," says Gad, adding that while yellow potatoes used to get a large premium, they are now priced at or below red potatoes in many cases and often at or below white potatoes as well.
As for potato demand, it's also very off–partly due to that increasing category segmentation and adding more SKUs in the same historical potato space. That will also likely help keep potato pricing where it is, even though the costs of production continue to be higher. "When we're paying twice as much for freight as we are for the product, that tells you that something's wrong in our marketing plan," says Gad.
For more information:
Ken Gad
Cambridge Farms Inc.
Tel: +1 508-297-2630
[email protected]
https://cambridgefarms.wordpress.com/