Potatoes

Industry drivers

A large Northwest crop

After two years of reduced production, Northwest potato growers expect to see a rebound in the 2023 crop. Favorable weather conditions throughout the summer have allowed potatoes to catch up from late spring planting. Increases in potato acres and yield improvements will bolster Northwest production.

Idaho is poised to harvest its second-largest potato crop on record, driven by increased planted acres and improved yields. Idaho growers increased planted potato acres by 35,000 acres (up 11.8% year over year), driven by processor expansions. Yields are expected to improve without prolonged heatwaves that hindered growth in 2021 and 2022. Potatoes harvested early have been in good condition and Idaho yields are expected to improve 8.5% from last year. If Idaho achieves its estimated production of 146.60 million cwt, it will be the second-largest potato crop in state history (following the 2000 crop of 152.3 million cwt). 

Washington could see their potato crop return to 10-year averages after two years of reduced production. A cold, wet spring delayed potato plantings in the Columbia Basin, Washington. However, favorable summer weather with few days over 90°F (when excessive heat hinders potato growth), allowed potato growth to quickly catch up over the summer. Washington growers expect yields of 620 cwt per acre, matching the 20-year average yield. The combination of higher yields and increased acreage is expected to put the 2023 Washington potato crop at 99.00 million cwt, a 9.5% increase from 2022. 

The Klamath Basin, Oregon potato crop is ahead of schedule. Potato yields are forecasted to increase from 2022, but a 3,000-acre reduction will lower state-wide production. Potato quality should be good, with 72% of the current crop in good-to-excellent condition. 

Potato production, Northwest region*

Source: USDA NASS, compiled by AgWest. *Forecasted

Open market prices plummet

Russet table potato prices set record highs in 2022 supported by limited supplies and strong demand in all sectors (fresh, frozen and dehydrated). With a large Northwest crop, open table prices have weakened as the potato supply is expected to improve. In June, Washington’s Columbia Basin had the strongest russet table fresh weighted average prices (FWA) in the nation at $42.36 per cwt, up 179% year over year. As harvest started, FWA prices fell to $22.97 per cwt in mid-September, a $18.74 per cwt price reduction from the previous year. Last year, strong processing demand and steep competition drove up FWA in the Northwest. However, a large crop combined with processing increases in contracted acres will continue to draw down open market prices. The North American Potato Market News estimated a 10% increase in potato production could drop grower returns by 70% or more. The Northwest crop is forecasted to increase production by 14% and open market returns have already decreased by 59% and 48% in Idaho and the Columbia Basin, respectively. Anecdotally, some open market potatoes recently sold below $5 per cwt, well below breakeven prices, as producers were concerned about losing their entire investment if they did not sell.

French fry exports to increase

Global French fry exports have grown steadily in recent years, with an average annual growth rate of 4.8% over the past decade. From 2020-2022 exports slowed as raw potato supply constraints limited the amount of product available for offshore sales. This shortage led a major French fry retailer in Japan to limit sales to only small French fry orders. As potato production is expected to increase in 2023, fryers will be able to recapture some of their lost market share. French fry demand is strong, especially as restaurant sales have recovered.

Restaurant retail sales

Source: US. Census Bureau, compiled by AgWest.

Profitability

Potato growers will benefit from a large, good-quality crop and relatively strong contract prices. Last year in September, some producers delayed early harvest to provide more time for potatoes to bulk up. This fall, producers started to dig potatoes early because of strong prices. Contracted growers will enjoy both strong prices and excellent production, a welcome change from the past two years. Uncontracted potatoes will face headwinds from a large crop, reducing the need for processors to purchase open-market potatoes.