A record potato crop in North America has dealt a price blow on American producers while Canada grapples with rot from surplus.
In the U.S., there has been a 9% climb in production. Farmers in Idaho have seen their first major potato crop in two years and are selling at aggressive prices despite the surplus.
In Canada, 89,000 acres countrywide have produced up to 29.6 million tonnes of potatoes for the fresh market sector. This leaves out potatoes for industrial use, which means the figure could even be higher.
Folly of Over-contracting
On the other side of the production increase is the challenge of over-contracting. Producers who contracted farming acres to replenish recent shortages are now looking for additional storage for their potatoes.
In the U.S., farmers in the Pacific Northwest within Orgeon, Idaho and Washington are counting extra russet potato sacks.
Contractors from Alberta and Manitoba, on the other hand, are staring at a surplus that could extend till May 2024.
Rot Enters the Picture
While the increment in potatoes is tightening storage, rainfall in Maine and eastern Canada is bringing russet potato rot.
In eastern U.S., there has been 2 inches of rainfall in the period ending December 4, according to the National Weather Service.
This is making it difficult to stock processing potatoes for the holiday season as bulk storage could lead to rot.
Pricing Challenge
With oversupply, storage rot and recovery from a two-year insufficiency of North American potatoes, suppliers are facing pricing challenges.
In the United States, potato prices had dipped by 50% by November 2023, according to market intelligence provider, Gro Intelligence. This is because the consistent demand of the past two years has ebbed with a sharp rise in 2023’s supplies.
Producers in Idaho, however, where acreage rose by 12% by June 2023, have stuck to top prices. Their bullish take aims to recover the market sales they lost during the potato shortage in the past 24 months. They are also trying to tap into the holiday season’s demand and recover the rising costs of production.
Canada’s prices, in their part, are remarkably stable despite the surplus. Data from CTV reveals that Canada’s potato prices rose in tandem with a surge in inflation of 3.1% in October. The prices of potatoes spiked by 6.6% in fall 2023.
Despite the holiday mood attracting demand, a serving of gravy costs the least at C$1.29 per plate while mashed potatoes cost the most from C$5.49 per serving.
Thus, as Hanukkah, Christmas and New Year holidays approach, North American potato supply and its pricing is getting intriguing. The last resort maybe Europe. Here, winter rainfall has delayed harvests and Europeans may welcome worthwhile imports from across the Atlantic.