A pdf file of the potato stocks report from the National Agricultural Statistics Service is at http://tinyurl.com/cveoaf.

Spud stocks drop to keep pace with demand

Major potato states hold 41% of 2008 crop in storage

Dave Wilkins
Capital Press

March 19, 2008

The stockpile of U.S. potatoes is down 8 percent compared with a year ago, according to the latest government estimates.

That's good thing for growers because processors have also slowed their usage amid the recession.

The 13 major potato states - which include Idaho, Oregon and Washington - held a combined 151 million hundredweight of potatoes in storage on March 1, compared with 163 million hundredweight on March 1, 2008, according to the USDA's National Agricultural Statistics Service. Nationally, about 41 percent of the 2008 crop was still in storage as of March 1.

Idaho spud stocks were down 11 percent from year-ago levels to 54 million hundredweight, or about 47 percent of the 2008 crop.

Washington held an estimated 31 million hundredweight of spuds, down 11 percent from a year ago. About 34 percent of the 2008 crop was still in storage as of March 1.

Potato stocks in Oregon were estimated at 9.8 million hundredweight, a reduction of 16 percent from year-ago levels. About 52 percent of the Oregon crop remains in storage.

Klamath Basin stocks, which include potatoes stored in California and Klamath County, Ore., were down 2 percent to 2 million hundredweight.

Not only are there fewer potatoes in storage now than a year ago, but processors have slowed their pace of usage.

Processors in Washington and Oregon (excluding Malheur County) had used 49.8 million hundredweight of raw potatoes from the 2008-09 storage crop as of March 1, compared with 50.2 million processed during the same period a year ago.

Processors in Idaho and Malheur County, Ore., have used 42.2 million hundredweight of 2008 crop raw potatoes as of March 1, down 13 percent from last year. Usage during February was estimated at 6.72 million hundredweight, down 20 percent from February 2008.

Processors have reported slower demand for french fries and other frozen potato products because of the global recession.

Major processors have reduced contracted potato acreage this year in the Columbia Basin by about 8 percent, industry officials have reported.

Growers in Washington state recently approved a reduction in 2009 contract prices from what had been agreed upon with processors last fall. Processors asked Idaho growers to make similar concessions.

The reduction in processing demand has increased concerns that it could lead to imbalances in potato supply and demand this year.

Small increases in supply cause big changes in price, said Joe Guenthner, an agricultural economics professor at the University of Idaho. For each 1 percent change in supply, prices change 7 percent in the opposite direction, he said.

If growers increase planting this year by 4 percent and yields are up 1 percent, the resulting 5 percent increase in supply would lead to a 35 percent decline in fresh potato prices, Guenthner said.

Growers who try to increase profits by planting more spuds will make prices drop for all growers, he said.

"This spring, growers can keep prices profitable if they think about the industry rather than themselves," Guenthner said.

Staff writer Dave Wilkins is based in Twin Falls, Idaho. E-mail: dwilkins@capitalpress.com.

+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
NOTE: In accordance with Title 17 U.S.C. section 107, any copyrighted
material herein is distributed without profit or payment to those who have
expressed a prior interest in receiving this information for non-profit
research and educational purposes only. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml

Source: http://capitalpress.com/main.asp?Search=1&ArticleID=49780&SectionID=67&SubSectionID=617&S=1