November/December 2019 - 34

Balancing the 2019 fresh potato crop
In August,
UNITED POTATO
GROWERS OF
AMERICA
Buzz Shahan
Chief Operating
Officer
when the 2019
potato crop's fresh
shipments were
estimated, its volume
was projected to
be one of the most
balanced in recent
memory. At this point,
the 2019 North
American fall potato
crop is in storage and
the actual volume
likely has physically
measured and confirmed.
By any reasonable thread of logic,
because trend line yields were used to
estimate the 2019-20 fresh potato supply
and because trend line yields are unlikely
due to a cool, wet spring, this crop could
indeed bring further stability into the fresh
potato market. This means that consumers
will get all the fresh potatoes they want at a
fair price and that, even if a September glut
temporarily oversupplies the market, growers
across North America will get a fair return on
investment. Take into account, also, that the
4% greater 2018 fresh supply returned even
Idaho growers with their record large crop,
if not ownership costs, at least immediate
growing costs.
In further support of balancing this year's
fresh potato crop, Europe's 2019 recordbreaking
summer heat has put a lid on yields
in that part of the world. None of this is to
suggest that markets will produce runaway
pricing; such is not needed for growers to get
returns required for financial sustainability.
Additionally, because large portions of this
crop have been contracted, a supply base
has been somewhat guaranteed for domestic
use in both process and fresh sectors.
Red and yellow potato prices, having
surged to abnormal spring and summer
highs, have now settled into fair trading
values that should continue throughout the
remainder of the 2019-20 shipping season,
only threatened by internal regional issues.
With Mother Nature's help in more exactly
matching this year's crop to demand, growers
have the opportunity to take from her a
reasonable idea of what their particular farm's
production should be in order to supply the
potato market such that on-farm pricing gives
a fair return. Process growers should also
be able to see how not over-supplying their
market improves contract negotiations.
If potato-growing history teaches anything,
it is that following a year of good pricing
growers increase production and cause the
following year's market to fall on its face. The
illogic of saying to one's self, " If only I'd had
twice as many potatoes to sell last year, I'd
have made twice as much money " is hard
to follow. In fact, it's hard to qualify such
thinking without insulting the grower who
thinks that way. Clearly, if growers had had
twice as much volume in the good year, the
good year never would have happened; the
market that rewarded them so well would
have been an over-supplied disaster.
It is unlikely that people who think like that
would have been in the front row at college
graduation being awarded Phi Beta Kappa
status. What is likely is that growers who
understand the supply-demand paradigm
that their region must meet to prosper -
examples annually observed in areas that
prosper for the precise reason that they do
understand supply/demand balance - will
continue doing so.
32
Spudman.com
http://www.Spudman.com
November/December 2019

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