Potato Expo Special Report

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Potato Expo a Success
The first annual Potato Expo surpassed expectations last week in San Antonio, bringing together almost 900 potato growers, researchers, Extension personnel and affiliated businesses. When planning for this meeting started two years ago, the steering committee hoped for 500 attendees, but more than 800 pre-registered and more people registered on-site.

The Potato Expo was a great opportunity to meet growers who might not attend the other annual gatherings. This show brought growers of seed, fresh, chip and process potatoes under one roof to discuss growing and marketing practices for their businesses.

I particularly enjoyed the keynote address from Charlie Wilson, the former Congressman from Texas who inspired the book and movie “Charlie Wilson’s War.” I hadn’t seen the movie, but after hearing him speak I was inspired to rent it over the weekend, and found the portrayal by Tom Hanks to be quite accurate.

So what does the future hold for the Potato Expo? Another gathering is planned for December 2009, but there seemed to be many attendees that would like the show to remain in January – and many liked the venue of San Antonio. The steering committee is encouraging attendees to provide input into this year’s Expo and thoughts on future meetings.

I appreciate the comments on Spudman and eSpudman that I received at the show, and I hope to see growers displaying the “Proud to be a Spudman” hats and bumper stickers we gave away during the expo.

Potato Expo Special Report
Annual potato meetings provide potato growers and affiliated businesses the opportunity to make business contacts and socialize, but education is one of the primary purposes. Last week’s Potato Expo in San Antonio had a wide array of potato industry experts, as well as leaders from nationwide retailers and foodservice operations. The nearly 900 attendees at the first annual Potato Expo had a choice of four breakout topics for the chip, fresh, process and seed markets, as well as daily general sessions.

The educational portion of the meeting kicked off on Thursday with a breakfast presentation from Gene Kahn, global sustainability officer for General Mills. Kahn is a former organic potato grower who grew his business to more than 7,000 vegetable organic acres in Washington before selling it to General Mills in 2000 for $100 million. Kahn spoke about General Mills’ efforts to reduce pesticide applications and land use in its crops, and the difference between what consumers think about sustainability and what is actually true. Kahn still farms using sustainable practices in Washington, growing seed for Sakata, but using chemicals, “and having a ball doing it,” he said.

Liberibacter, commonly referred to as Zebra Chip or its proper term ZC, is a concern for chip growers because it results in unusable product and can cause severe crop loss, but it can affect potatoes for all market segments and every variety. It first appeared in the United States in 2000, and has since spread to seven states in the Southwest, Midwest and West. The primary vector has been identified as psyllids, based on two research projects in New Zealand and California, said Gerhard Bester of Frito-Lay. More research is needed to determine if there are other vectors and to ensure that areas without the disease remain free from ZC.

The economy was brought up by a number of the presenters at the expo, which is expected given the talk of recession. Not only does the economy have an effect on growers by driving demand in some areas while hurting other sectors, it also affects the input costs. The most noticeable of those rising costs has been in fertilizer, and Bill Whitaker, president of the agribusiness group of the J.R. Simplot Co., spoke about the key drivers of the global fertilizer industry. Supplies are at 30- to 40-year lows and will remain tight, Whitaker said, especially considering about half of fall applications didn’t get made. This has resulted in an oversupply and drop in price from fertilizer manufacturers, but the supply at dealers is still expensive product. The key moving forward is increased communication between manufacturers, dealers and growers. Whitaker is “bullish” on agriculture, despite the current bump in the road.

The first Potato Expo can be deemed a success and the next expo will be in early December 2009 in Orlando.TEXT


Market Report
This year started with tight potato supplies because of reduced acreage throughout the United States of about 8 percent. Weather conditions in some of the potato-producing regions led to reduced yields and short seasons, further tightening the market but resulting in record high prices. The total supply outlook for the 2008 crop is about 10 percent below last year, with Colorado higher and Wisconsin, Idaho and the Columbia Basin with fewer potatoes to ship than last year.

As of Dec. 1, potato stocks were down 25 million hundredweight, and the pace of fresh movement is unsustainable, said Dave Beesley of Snake River Plains Potatoes in Ucon, Idaho. Beesley presented the 2008/2009 potato supply outlook at the Potato Expo in San Antonio last week. December shipments from Idaho were the highest since 2003 following a weak September and October, which led Idaho to increase carton prices by $1 on Thursday, the highest price ever for this time of year. Winter weather combined with the Christmas and New Years holidays has resulted in strong demand from all potato sectors, which should result in high demand for two to three weeks followed by the standard February slump, Beesley said. Fresh demand is down 5 percent over the last six months, and 5.5 percent over the last three months, which is the equivalent of adding six million cwt.

The process market is experiencing a shortage of potatoes right now, and has so far moved more than two million fresh sacks into dehy – not distressed lots, either, Beesley said. Processors are still 8-10 million sacks short of meeting their core customers’ demands, which will keep prices high and could damage the dehy market. The fresh and fry markets should have adequate supplies, but dehy will remain short because of its lower returns.

The frozen potato market has been experiencing strong demand, but that dropped off in December, Beesley said. Contracts, which had already been set, have come up again as a result of the high demand. There’s concern in the market about a recession and what that will mean for restaurants. Quick service restaurants have had good foot traffic but casual dining restaurants already have suffered, although not as much as fine dining restaurants. There is some indication that if people stop eating out, the fresh market may go up, but that hasn’t happened yet, Beesley said.

The seed supply is tight with smaller profiles. Seed prices are at record highs and expected to stay there, which will further limit availability for processors.

Acreage for 2009 is expected to increase about 8 percent, which is the result of high prices and not an increased demand, Beesley said. If the potato-producing areas hit trendline yields next year with that added acreage it will be the equivalent to adding six million sacks to the market.


My Fries
PICTURE Lamb Weston has introduced a new product to consumers – My Fries. Cut only from Yukon Gold potatoes and featuring an innovative coating system, My Fries captures the natural rich, buttery notes of the potatoes for a savory flavor. The item gives consumers a better-for-you option while retaining great taste. My Fries are available in five cuts: Thin Regular Cut, Concertinas, CrissCut Fries, Shoestring Fries and Regular cut.