Forecast for U.S. Potatoes: A New Normal Growing Out of Abnormal Times

Posted by Growing Produce Staff|June 30, 2022

According to a new research report from Rabobank, the U.S. potato industry is adjusting amid turbulent times. Challenges seen on a global scale have been hitting home and impacting growers in different ways.

Rabobank cites three main factors influencing the U.S. potato industry. They include:

1. War in Ukraine: Elevated energy, fertilizer, and grain prices combined with inflation and supply chain disruptions will impact upcoming planting decisions.
2. Drought: In 2021, heat stress from elevated temperatures and irrigation restraints caused the largest drop in yield seen in the last two decades.
3. Pandemic: Foodservice closures brought 2021 frozen potato consumption down 12% (compared to pre-pandemic levels).

Given these factors and more, RaboResearch food and agribusiness experts predict the annual average fresh market potato price to increase slightly from the previous year to USD 13.70/cwt, whereas the annual average processing potato price is projected to increase by 22% to about USD 11.00/cwt.

Growers’ margins are likely to be tight given rising input costs. The projected increase in the processing potato price implies that contract prices will likely increase by a similar percentage to incentivize growers to commit more acreage. The cost of delivering potatoes to final buyers and consumers will remain high, but will rise more slowly into 2023.