Turning A Profit
I just read in the North American Potato Market News that Publisher Bruce Huffaker is projecting a 14,400-acre increase in U.S. fall potato production this year mostly in the Western states. Huffaker also wrote that if Canada follows that path as well, 2006 North American production could increase 18 million cwt., which, he wrote, could reduce grower returns by 34 percent.
This is the first season since potato markets in the United States started turning around and giving growers some sort of a profit. Last month, we asked growers if they’ve seen an increase in profits since the United cooperatives formed. Eighty-five percent of respondents said yes. That’s a huge number.
In its March 1 potato stocks report, the USDA’s National Agricultural Statistics Service reported there were 8 percent fewer potatoes in storage this year than last year on the same date. In fact, in the February issue of Spudman, we reported that United Potato Growers of America was warning that the industry was overshipping and that potato supplies could be tight this summer.
These were all good signs that supply was getting closer to being in line with demand. Fewer potatoes for people to buy means higher prices for the potatoes that are available.
To be fair, some of this supply-demand shift might be thanks to the decrease in prominence of the Atkins Diet, as well as efforts by industry associations to increase demand. But decreasing supply and increasing demand are natural partners in an effort to turn this industry around.
During the past few months, I’ve talked to several growers who all seemed positive about the direction in which the industry is headed. This is the first time since I took over as editor of Spudman that I’ve heard such positive feedback from potato growers about the future of their industry of their livelihoods. All were optimistic about the efforts to decrease acreage one way the industry was able to help itself turn the market situation around.
But, as Albert Wada told me for a story last month, We have short memories as growers … ”
We can see this in Huffaker’s predictions about this year’s plantings.
I hope Wada’s other prediction is true: ” … I think the memory is still not faded of the terrible last few years.”